SECURITIES PURCHASE AGREEMENT


 


SECURITIES PURCHASE
AGREEMENT (the "Agreement"), dated as of March 24, 2014, by and among Inventergy, Inc., a Delaware corporation,
with headquarters located at 19925 Stevens Creek Boulevard, Suite 100, Cupertino, CA 95014 (the "Company"),
and the investors listed on the Schedule of Buyers attached hereto (individually, a "Buyer" and collectively,
the "Buyers").


 


WHEREAS:


 


A.  The
Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the "1933 Act"), and Rule 506(b) of Regulation D
("Regulation D") as promulgated by the United States Securities and Exchange Commission (the "SEC")
under the 1933 Act.


 


B.   On
May 10, 2013, the Company issued senior secured notes (as amended prior to the date hereof, the "Existing Notes")
to the Buyers pursuant to that certain Securities Purchase Agreement, dated as of May 10, 2013 (as amended, the "Existing
SPA"). The Company and each Buyer desire to amend and restate the Existing Notes, which amended and restated notes shall
be convertible into the Company's common stock, par value $0.0001 per share (the "Common Stock"), in accordance
with the terms of such amended and restated notes. To effect the amendment and restatement of the Existing Notes, each Buyer and
the Company wish to exchange the aggregate principal amount of Existing Notes as set forth opposite such Buyer's name in column
(3) of the Schedule of Buyers for the same aggregate principal amount of senior secured convertible notes (as amended and restated
in the form attached hereto as Exhibit A-1 and together with any senior secured convertible notes issued in replacement
thereof in accordance with the terms thereof, the "Amended and Restated Notes"). Any shares of Common Stock issued
pursuant to the terms of the Amended and Restated Notes, are collectively referred to herein as the "Amended and Restated
Note Conversion Shares".


 


C.  The
Company has also authorized a new series of senior secured convertible notes of the Company, in substantially the form attached
hereto as Exhibit A-2 (the " New Notes" and together with the Amended and Restated Notes, the "Notes").


 


D.  Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, that aggregate
principal amount of New Notes set forth opposite such Buyer's name in column (4) on the Schedule of Buyers (which aggregate principal
amount for all Buyers shall be $3,000,000). Any shares of Common Stock issued or issuable pursuant to the terms of the New Notes
are collectively referred to herein as the "New Note Conversion Shares" and together with the Amended and Restated
Note Conversion Shares, the "Conversion Shares".


 


E.   The
Notes and the Conversion Shares are collectively referred to herein as the "Securities".


 




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F.  The Existing Notes are secured by a first priority perfected security interest in certain of the assets of the Company and its
subsidiaries as evidenced by the Security Agreement (such terms are defined in the Existing SPA) and together with any ancillary
documents related thereto, the Cash Collateral Agreement and the Deposit Account Control Agreement (as such terms are defined below),
collectively, the "Security Documents"). For purpose of clarity, the first priority perfected security interest
will not apply to Permitted Liens (as defined in the Notes).


 


G.  In
connection with the transactions contemplated hereby, the Parties desire to enter into, at or prior to the Closing (as defined
below), the Cash Collateral Agreement in the form attached hereto as Exhibit B-1 (as amended or modified from time to time
in accordance with its terms, the "Cash Collateral Agreement") and the Deposit Account Control Agreement in the
form attached hereto as Exhibit B-2 (as amended or modified from time to time in accordance with its terms, the "Deposit
Account Control Agreement") with First Republic Bank (the "Bank") The bank account governed by the Deposit
Account Control Agreement shall be referred to herein as the "Control Account".


 


NOW, THEREFORE,
the Company and each Buyer hereby agree as follows:


 


3.          PURCHASE
AND SALE OF NEW NOTES; EXCHANGE OF EXISTING NOTES.


 


(a)          Notes.
Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, (x) the Company agrees to issue
and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as
defined below), the aggregate principal amount of New Notes, as is set forth opposite such Buyer's name in column (4) on the Schedule
of Buyers and (y) the Company agrees to exchange with each Buyer, and each Buyer severally and jointly, agrees to exchange with
the Company on the Closing Date the aggregate principal amount of Existing Notes held by such Buyer, as is set forth opposite such
Buyer's name in column (3) on the Schedule of Buyers, for the same aggregate principal amount of Amended and Restated Notes, to
be issued by the Company (the "Closing").


 


(b)          Closing.
The date and time of the Closing (the "Closing Date") shall be 10:00 a.m., New York City time, on the date hereof
(or such later date as is mutually agreed to by the Company and each Buyer) after notification of satisfaction (or waiver) of the
conditions to the Closing set forth in Sections 6 and 7 below at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue,
New York, New York 10022.


 


(c)          Purchase
Price. The aggregate purchase price for the New Notes to be purchased by each Buyer (the " Purchase Price")
shall be the amount set forth opposite such Buyer's name in column (5) on the Schedule of Buyers. Each Buyer shall pay $1,000 for
each $1,000 principal amount of New Note to be purchased by such Buyer at the Closing.


 




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(d)          Form
of Payment. On the Closing Date, (A) each Buyer shall pay its portion of the Purchase Price to the Company for the New Notes
to be issued and sold to such Buyer at the Closing (less, in the case of Hudson Bay IP Opportunities Master Fund LP ("Hudson
Bay") the amount withheld pursuant to Section 4(f)), by wire transfer of immediately available funds in accordance with
the wire instructions of the Company and (B) the Company shall deliver to each Buyer New Notes (each allocated in the principal
amounts, as the Buyer shall request) duly executed on behalf of the Company and registered in the name of such Buyer or its designee.
Each Buyer and the Company agree that any amounts withheld from the Purchase Price of any New Notes pursuant to Section 4(f) hereof
shall constitute a reimbursement of the expenses described in such Section and shall not constitute original issue discount or
other discount in respect of the New Notes for any tax or other purpose.


 


(e)          Exchange
of Existing Notes for Amended and Restated Notes. Subject to the satisfaction (or waiver) of the conditions set forth in Section
6 and 7 below, at the Closing, each Buyer shall surrender to the Company such Buyer's Existing Notes, as is set forth opposite
such Buyer's name in column (3) of the Schedule of Buyers, and the Company shall issue and deliver to such Buyer the same aggregate
principal amount of Amended and Restated Notes. The Company shall be required to pay to each applicable Buyer all accrued and unpaid
interest on the Existing Notes through and including the Closing Date in cash by wire transfer of immediately available funds.


 


(f)          The
parties hereto acknowledge and agree, solely for purposes of the Security Documents, that (i) this Agreement and the other Transaction
Documents shall be deemed to be Transaction Documents (as defined in the Existing SPA), (ii) the Notes shall be deemed to be Notes
(as defined in the Existing SPA) and (iii) the Notes shall be deemed to have been issued under the Existing SPA.


 


2.          BUYER'S
REPRESENTATIONS AND WARRANTIES.


 


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


 


(a)          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.


 


(b)          No
Sale or Distribution. Such Buyer is (i) acquiring the Notes, and (ii) upon conversion of the Notes will acquire the Conversion
Shares, and, in each case, for its own account 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 1933 Act; provided, however, that by making the
representations herein, such Buyer does not agree 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 a registration statement or an exemption under
the 1933 Act. Such Buyer is acquiring the Securities hereunder in the ordinary course of its business. Such Buyer does not presently
have any agreement or understanding, directly or indirectly, with any Person (as defined below) to distribute any of the Securities.


 


(c)          Accredited
Investor Status. Such Buyer is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D.


 




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(d)          Reliance
on Exemptions. Such 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.


 


(e)          Information.
Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer. Such Buyer and
its advisors, if any, have been afforded the opportunity to ask questions of the Company. 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 herein. Such Buyer understands that its investment
in the Securities involves a high degree of risk. Such 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.


 


(f)          No
Governmental Review. Such Buyer 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.


 


(g)          Transfer
or Resale. Such Buyer understands that: (i) the Securities have not been and are not being registered under the 1933 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,
or (C) such Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant
to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule thereto) (collectively, "Rule
144"); (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 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company
nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder. Notwithstanding the foregoing, the Securities may be pledged in connection
with a bona fide margin account or other loan or financing arrangement secured by the Securities and such pledge of Securities
shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Buyer effecting a pledge of Securities
shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other Transaction Document (as defined in Section 3(b)), including, without limitation, this Section 2(g).


 




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(h)          Legends.


 


(i)          Such
Buyer understands that the certificates or other instruments representing the Notes and, until such time as the resale of the Conversion
Shares have been registered under the 1933 Act, the stock certificates representing the Conversion Shares, except as set forth
below, shall bear any legend as required by the "blue sky" laws of any state and a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against transfer of such stock certificates):


 


[NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] HAVE BEEN][THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT
TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 


At any time after the Public Company Date,
the legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the
Securities upon which it is stamped or, if available, issue to such holder by electronic delivery at the applicable balance account
at The Depository Trust Company ("DTC"), if, unless otherwise required by state securities laws, (i) such Securities
are registered for resale under the 1933 Act, (ii) in connection with a sale, assignment or other transfer, such holder provides
the Company with an opinion of counsel, in a generally acceptable form, to the effect that such sale, assignment or transfer of
the Securities may be made without registration under the applicable requirements of the 1933 Act, or (iii) the Securities can
be sold, assigned or transferred pursuant to Rule 144 or Rule 144A. The Company shall be responsible for the fees of its transfer
agent and all DTC fees associated with such issuance.


 




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(ii)         At
any time after the Public Company Date (as defined below), if the Company shall fail for any reason or for no reason to issue to
the holder of the Securities within three (3) Trading Days (after the occurrence of any of (i) through (iii) above (the initial
date of such occurrence, the "Legend Removal Date"), a certificate without such legend to the holder or to issue
such Securities to such holder by electronic delivery at the applicable balance account at DTC, and if on or after such Trading
Day the holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by the holder of such Securities that the holder anticipated receiving without legend from the Company (a "Buy-In"),
then the Company shall, within three (3) Trading Days after the holder's request and in the holder's discretion, either (i) pay
cash to the holder in an amount equal to the holder's total purchase price (including brokerage commissions, if any) for the shares
of Common Stock so purchased (the "Buy-In Price"), at which point the Company's obligation to deliver such unlegended
Securities shall terminate, or (ii) promptly honor its obligation to deliver to the holder such unlegended Securities as provided
above and pay cash to the holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number
of shares of Common Stock, times (B) the Closing Bid Price (as defined in the Notes) on the Legend Removal Date.


 


(i)          Validity;
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.


 


(j)          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 or (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 would 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.


 


3.          REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.


 


The Company represents
and warrants to each of the Buyers that, except as set forth on a Schedule of Exceptions (the "Schedule of Exceptions")
furnished to each Buyer, which exceptions shall qualify the representations and warranties of the Company set forth in this Section
3 to the extent specifically referenced in the Schedule of Exceptions, as of the date hereof and as of the Closing Date:


 




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(a)          Organization
and Qualification. Each of the Company and its "Subsidiaries" (which for purposes of this Agreement means
any joint venture or any entity in which the Company, directly or indirectly, owns any of the capital stock or holds an equity
or similar interest) are entities duly organized and validly existing and, to the extent legally applicable, in good standing under
the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own their properties and
to carry on their business as now being conducted. Each of the Company and its Subsidiaries is duly qualified as a foreign entity
to do business and, to the extent legally applicable, 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 used in this Agreement,
"Material Adverse Effect" means any material adverse effect on the business, properties, assets, operations, results
of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, individually or taken as a
whole, or on the transactions contemplated hereby or in the other Transaction Documents or by the agreements and instruments to
be entered into in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations under
the Transaction Documents (as defined below). The Company has no Subsidiaries, except as set forth on Schedule 3(a).


 


(b)          Authorization;
Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and perform its obligations
under this Agreement, the Notes, the Cash Collateral Agreement and the Deposit Account Control Agreement and each of the other
agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement and the Existing
SPA (collectively, the "Transaction Documents") and to issue the Securities in accordance with the terms hereof
and thereof. The execution and delivery 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 Notes, the reservation for issuance
and the issuance of the Conversion Shares issuable upon conversion of the Notes and the granting of a security interest in the
Collateral (as defined in the Cash Collateral Agreement) have been duly authorized by the Company's board of directors and (other
than any other filings as may be required by any state securities agencies) no further filing, consent, or authorization is required
by the Company, its board of directors or its stockholders. This Agreement and the other Transaction Documents of even date herewith
have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their 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. Each of the Subsidiaries party to any of the Transaction
Documents has the requisite power and authority to enter into and perform its obligations under such Transaction Documents. The
execution and delivery by the Subsidiaries party to any of the Transaction Documents of such Transaction Documents and the consummation
by such Subsidiaries of the transactions contemplated thereby have been duly authorized by such Subsidiaries' respective boards
of directors (or other applicable governing body) and (other than filings as may be required by state securities agencies) no further
filing, consent, or authorization is required by such Subsidiaries, their respective boards of directors (or other applicable governing
body) or stockholders (or other applicable owners of equity of such Subsidiaries). The Transaction Documents to which any of the
Subsidiaries are parties have been duly executed and delivered by such Subsidiaries, and constitute the legal, valid and binding
obligations of such Subsidiaries, enforceable against them in accordance with their 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.


 




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(c)          Issuance
of Securities. The issuance of the Notes has been duly authorized and upon issuance in accordance with the terms of the Transaction
Documents shall be validly issued and free from all taxes, liens and charges with respect to the issue thereof. The Amended and
Restated Notes shall be issued hereunder pursuant to Section 3(a)(9) of the 1933 Act, and the Company hereby acknowledges and agrees
that the holding period, for purposes of Rule 144, of the Existing Notes shall be tacked to the holding period of the Amended and
Restated Notes. As of the Closing, the Company shall have reserved from its duly authorized capital stock not less than the sum
of 130% of the maximum number of shares of Common Stock issuable upon conversion of the Notes (assuming for purposes hereof, that
the Notes are convertible at the Conversion Price (as defined in the Notes) and without taking into account any limitations on
the conversion of the Notes set forth therein), determined as if issued as of the Trading Day immediately preceding the applicable
date of determination. Upon issuance or conversion in accordance with the Notes, the Conversion Shares will be validly issued,
fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue
thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Assuming the accuracy of each of the
representations and warranties set forth in Section 2 of this Agreement, the offer and issuance by the Company of the Securities
is exempt from registration under the 1933 Act.


 


(d)          No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and any of its Subsidiaries
party to any of the Transaction Documents and the consummation by the Company and such Subsidiaries of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the Notes, and reservation for issuance and issuance of the
Conversion Shares) will not (i) result in a violation of any certificate of incorporation, any certificate of formation, any certificate
of designations or other constituent documents of the Company or any of its Subsidiaries, any capital stock of the Company or any
of its Subsidiaries or the bylaws of the Company or any of its Subsidiaries or (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a default) in any respect 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
foreign, federal and state securities laws and regulations) 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.


 


(e)          Consents.
Neither the Company nor any of its Subsidiaries is required to obtain any consent, authorization or order of, or make any filing
or registration with, any government, court, regulatory, self-regulatory, administrative agency or commission or other governmental
agency, authority or instrumentality, domestic or foreign, of competent jurisdiction (a "Governmental Authority")
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, except for (i) the filing of a Form D pursuant to Regulation
D promulgated by the SEC under the 1933 Act and (ii) the filing required by applicable state "blue sky" securities laws,
rules and regulations. The Company and its Subsidiaries are unaware of any facts or circumstances that might prevent the Company
from obtaining or effecting any of the registration, application or filings pursuant to the preceding sentence.


 




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(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, or (ii) an "affiliate" (as defined
in Rule 144) of the Company or any of its Subsidiaries. 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 has been based solely on the independent evaluation by the Company and its representatives.


 


(g)          No
General Solicitation; Placement Agent. Neither the Company, nor any of its Subsidiaries or 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) in connection with the offer or sale of the Securities. Neither the Company nor any of its Subsidiaries has engaged any placement
agent or other agent in connection with the sale of the Securities.


 


(h)          No
Integrated Offering. None of the Company, its Subsidiaries, any of their affiliates, and 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 require registration of any of the Securities under the 1933 Act, whether through integration with prior offerings or
otherwise, or cause this offering of the Securities to require approval of stockholders of the Company for purposes of 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. None of the Company, its Subsidiaries, their affiliates
and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration
of any of the Securities under the 1933 Act or cause the offering of the Securities to be integrated with other offerings for purposes
of any such applicable stockholder approval provisions.


 


(i)          Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares issuable upon conversion of the Notes
will increase in certain circumstances. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion
of the Notes 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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(j)          Bankruptcy;
Insolvency. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any bankruptcy
law nor does the Company have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings
or any actual knowledge of any fact that would reasonably lead a creditor to do so. The Company and its Subsidiaries, individually
and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to
occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section 3(j), "Insolvent"
means, with respect to any Person (i) the present fair saleable value of such Person's assets is less than the amount required
to pay such Person's total Indebtedness (as defined in Section 3(m)), (ii) such Person is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured, (iii) such Person intends to
incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature or (iv) such Person has
unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed
to be conducted.


 


(k)          Transactions
With Affiliates. Except as set forth on Schedule 3(k), no current or former employee, partner, director, officer or
stockholder (direct or indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the Company, any
affiliate of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing, is presently,
or has ever been, (i) a party to any transaction with the Company or its Subsidiaries (including any contract, agreement or other
arrangement providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring payments
to, any such director, officer or stockholder or such associate or affiliate or relative) or (ii) the direct or indirect owner
of an interest in any corporation, firm, association or business organization which is a competitor, supplier or customer of the
Company or its Subsidiaries (except for a passive investment (direct or indirect) in less than 5% of the common stock of a company
whose securities are traded on or quoted through an Eligible Market), nor does any such Person receive income from any source other
than the Company or its Subsidiaries which relates to the business of the Company or its Subsidiaries or should properly accrue
to the Company or its Subsidiaries. Except as set forth on Schedule 3(k), no employee, officer, stockholder or director
of the Company or any of its Subsidiaries or member of his or her immediate family is indebted to the Company or its Subsidiaries,
as the case may be, nor is the Company or any of its Subsidiaries indebted (or committed to make loans or extend or guarantee credit)
to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred
on behalf of the Company, and (iii) for other standard employee benefits made generally available to all employees or executives
(including stock option agreements outstanding under any stock option plan approved by the board of directors of the Company).


 


(l)          Equity
Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 125,000,000 shares of Common
Stock, of which as of the date hereof, 12,901,103 are issued and outstanding, 915,000 are reserved for issuance pursuant to the
Company's stock option and purchase plans and (ii) 10,000,000 shares of preferred stock, $0.0001 par value, 6,176,748 of which,
as of the date hereof, are issued and outstanding. All of such outstanding shares have been, or upon issuance will be, validly
issued and are fully paid and nonassessable. The capitalization of the Company immediately prior to the Closing Date is set forth
on Schedule 3(l)(A) attached hereto and the capitalization of the Company immediately following the Closing Date is set
forth on Schedule 3(l)(B) attached hereto. The Company has furnished to the Buyers true, correct and complete copies of
the Company's Certificate of Incorporation, as amended and as in effect on the date hereof (the "Certificate of Incorporation"),
and the Company's Bylaws, as amended and as in effect on the date hereof (the "Bylaws"), and the terms of all
securities convertible into, or exercisable or exchangeable for, shares of Common Stock and the material rights of the holders
thereof in respect thereto.


 




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(m)          Indebtedness
and Other Contracts. Except as disclosed on Schedule 3(m), neither the Company nor any of its Subsidiaries (i) has any
outstanding Indebtedness (as defined below), (ii) is a party to any contract, agreement or instrument, the violation of which,
or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result
in a Material Adverse Effect, (iii) is in violation of any term of or in default under any contract, agreement or instrument relating
to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in a Material
Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which,
in the judgment of the Company's officers, has or is expected to have a Material Adverse Effect. Schedule 3(m) provides
a detailed description of the material terms of any such outstanding Indebtedness. For purposes of this Agreement: (x) "Indebtedness"
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services (including, without limitation, "capital leases" in accordance
with GAAP) (other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced
by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness
(even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession
or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in GAAP, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through
(F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any mortgage, deed of trust. lien, pledge, charge, security interest, easement, covenant, right of way, restriction, equity
or encumbrance of any nature whatsoever in or upon any property or assets (including accounts and contract rights) with respect
to any asset (a "Lien") owned by any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (A) through (G) above; and (y) "Contingent Obligation"
means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness,
lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole
or in part) against loss with respect thereto.


 




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(n)          Intellectual
Property.


 


(i)          
Schedule 3(n)(i) sets forth a complete and current list of registered trademarks or copyrights, issued patents, applications
thereof, or other forms of registration anywhere in the world that is owned by the Company or a Subsidiary ("Listed Intellectual
Property") and the owner of record, date of application or issuance and relevant jurisdiction as to each. All Listed Intellectual
Property is owned by the Company or a Subsidiary, free and clear of security interests, liens, encumbrances or claims of any nature.
All Listed Intellectual Property is valid, subsisting, unexpired, in proper form and enforceable and all renewal fees and other
maintenance fees that have fallen due on or prior to the effective date of this Agreement have been paid. No Listed Intellectual
Property is the subject of any proceeding before any governmental, registration or other authority in any jurisdiction, including
any office action or other form of preliminary or final refusal of registration, except as noted on Schedule 3(n)(i). The
consummation of the transactions contemplated hereby will not alter or impair any Intellectual Property that is owned or licensed
by the Company or a Subsidiary. There is no claim, suit, action or proceeding pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary challenging the Company's or any Subsidiary's ownership of any Intellectual Property.


 


(ii)         Schedule
3(n)(ii) sets forth a complete list of all agreements relating to Intellectual Property to which the Company or a Subsidiary
is a party, subject or bound (the "Intellectual Property Contracts") (other than agreements involving (A) the
license of the Company of standard, generally commercially available "off-the-shelf" third party products that are not
and will not to any extent be part of any product, service or intellectual property offering of the Company or (B) non-disclosure
agreements). Each Intellectual Property Contract: (i) is valid and binding on the Company or a Subsidiary, as the case may be,
and, to the Company's knowledge, the counterparties thereto, and is in full force and effect and (ii) upon consummation of the
transactions contemplated hereby shall continue in full force and effect without penalty or other adverse consequence.


 


(iii)        The
Company and its Subsidiaries are not under any obligation to pay royalties or other payments in connection with any agreement,
nor restricted from assigning their rights respecting Intellectual Property nor will the Company or any Subsidiary otherwise be,
as a result of the execution and delivery of this Agreement or the performance of the Company's obligations under this Agreement,
in breach of any agreement relating to the Intellectual Property.


 


(iv)        Except
as set forth on Schedule 3(n)(iv), no present or former employee, officer or director of the Company or any Subsidiary,
or agent or outside contractor of the Company or any Subsidiary, holds any right, title or interest, directly or indirectly, in
whole or in part, in or to any Intellectual Property that is owned or licensed by the Company or any Subsidiary.


 




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(v)         For
the purpose of this Section 3(n), "Intellectual Property" shall mean all of the following: (A) trademarks and
service marks, trade dress, product configurations, trade names and other indications of origin, applications or registrations
in any jurisdiction pertaining to the foregoing and all goodwill associated therewith; (B) inventions, discoveries, improvements,
ideas, know-how, formula methodology, processes, technology, software (including password unprotected interpretive code or source
code, object code, development documentation, programming tools, drawings, specifications and data) and applications and patents
in any jurisdiction pertaining to the foregoing, including re-issues, continuations, divisions, continuations-in-part, renewals
or extensions; (C) trade secrets, including confidential information and the right in any jurisdiction to limit the use or disclosure
thereof; (D) copyrights in writings, designs software, mask works or other works, applications or registrations in any jurisdiction
for the foregoing and all moral rights related thereto; (E) database rights; (F) Internet Web sites, domain names and applications
and registrations pertaining thereto and all intellectual property used in connection with or contained in all versions of the
Company's Web sites; (G) rights under all agreements relating to the foregoing; (H) books and records pertaining to the foregoing;
and (I) claims or causes of action arising out of or related to past, present or future infringement or misappropriation of the
foregoing.


 


(o)          Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.


 


(p)          Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be
paid in connection with the sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have been,
fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.


 


(q)          Ranking
of Notes. No Indebtedness of the Company or any of its Subsidiaries other than Permitted Senior Indebtedness (as defined in
the Notes) is senior to or ranks pari passu with the Notes in right of payment, whether with respect of payment of redemptions,
interest, damages or upon liquidation or dissolution or otherwise.


 


(r)          Shell
Company Status. The Company is not, and has never been, an issuer identified in Rule 144(i)(1).


 


(s)          No
Disqualification Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506 under the 1933
Act ("Regulation D Securities"), none of the Company, any of its predecessors, any affiliated issuer, any director,
executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of
the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is
defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an "Issuer
Covered Person" and, together, "Issuer Covered Persons") is subject to any Disqualification Event, except
for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether
any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its
disclosure obligations under Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.


 


(t)          Other
Covered Persons. The Company is not aware of any Person (other than any Issuer Covered Person) that has been or will be paid
(directly or indirectly) remuneration for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation
D Securities.


 




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(u)          Absence
of Certain Changes. Since May 10, 2013, there has been no material adverse change and no material adverse development in the
business, assets, properties, operations, condition (financial or otherwise), results of operations or prospects of the Company
or its Subsidiaries.


 


(v)         Disclosure.
The Company understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions
in securities of the Company. No statement made by the Company in this Agreement, any other Transaction Document or the exhibits
and schedules attached hereto or in any certificate or schedule furnished or to be furnished by or on behalf of the Company to
the Investors or any of their representatives in connection with the transactions contemplated hereby contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not
misleading.


 


(w)          Regulations
T, U and X.  The Company is not or will not be engaged in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulation T, U or X), and the Purchase Prices will not be used to purchase or
carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.


 


4.          COVENANTS.


 


(a)          Best
Efforts. Each party shall use its best efforts timely to satisfy each of the covenants below and the conditions to be satisfied
by it as provided in Sections 6 and 7 of this Agreement.


 


(b)          Use
of Proceeds. The Company will use the proceeds from the sale of the Securities as substantially set forth on Schedule 4(b).


 


(c)          Reporting
Status. Immediately following the Public Company Date and until the date on which a Buyer or any transferee or assignee thereof
to whom a Buyer assigns its rights as a holder of Securities under this Agreement (each an "Investor", and collectively,
the "Investors") shall have sold all of the Conversion Shares and none of the Notes is outstanding (the
"Reporting Period"), the Company shall timely file all reports required to be filed with the SEC pursuant to the
Securities Exchange Act of 1934, as amended (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, and the Company shall use reasonable best efforts to take all actions necessary to
permit it to, and thereafter to maintain its eligibility to, register the Conversion Shares for resale by the Buyers on Form S-3.


 




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(d)          Financial
Information Post-Public Company Date. From and after the date the shares of Common Stock of the Company (or its successor or
parent by merger, recapitalization, reorganization, or otherwise) are registered under the 1934 Act (the "Public Company
Date"), and as long as any Securities remain outstanding, the Company agrees to send the following to each Investor during
the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the
EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K (or any analogous reports under the 1934 Act) and any registration
statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) on the same day as the release thereof,
facsimile or e-mailed copies of all press releases issued by the Company or any of its Subsidiaries, and (iii) copies of any
notices and other information made available or given to the stockholders of the Company generally, contemporaneously with the
making available or giving thereof to the stockholders. As used herein, "Business Day" means any day other than
Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law to remain closed.


 


(e)          Listing.
Immediately following the Public Company Date, the Company shall promptly secure the listing or quotation of the Conversion Shares
upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed (subject
to official notice of issuance) (the date such listing initially occurs, the "Listing Date") and shall promptly
secure, in accordance with the Notes and this Agreement, the listing or quotation of all additional Conversion Shares from time
to time issued under the terms of the Transaction Documents. After the Public Company Date, the Company shall maintain the listing
or quotation of the Conversion Shares on each national securities exchange and automated quotation system, if any, upon which the
Common Stock continues to be listed or quoted. The Company shall pay all fees and expenses in connection with satisfying its obligations
under this Section 4(e).


 


(f)          Fees.
Subject to Section 8 below, at Closing, the Company shall reimburse Hudson Bay or its designee(s) for all costs and expenses incurred
in connection with the transactions contemplated by the Transaction Documents (including all legal fees and disbursements in connection
therewith, documentation and implementation of the transactions contemplated by the Transaction Documents and due diligence in
connection therewith), which amount may be withheld by such Buyer from its Purchase Price at the Closing to the extent not previously
reimbursed by the Company. Notwithstanding the foregoing, in no event will the costs and expenses of Hudson Bay reimbursed by the
Company pursuant to this Section 4(f) exceed $40,000. The Company shall be responsible for the payment of any placement agent's
fees, financial advisory fees, broker's commissions or fees payable to the Bank in connection with the Deposit Account Control
Agreement, relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold each Buyer harmless
against, any liability, loss or expense (including, without limitation, reasonable attorney's fees and out-of-pocket expenses)
arising in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction Documents,
each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers.


 


(g)          Pledge
of Securities. The Company acknowledges and agrees that 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 pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a pledge of Securities
shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other Transaction Document, including, without limitation, Section 2(g) hereof; provided that an Investor and
its pledgee shall be required to comply with the provisions of Section 2(g) hereof in order to effect a sale, transfer or assignment
of Securities to such pledgee. 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 an Investor.


 




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(h)          Disclosure
of Transactions and Other Material Information. On or before 8:30 am, New York City time, on the first Business Day after this
Agreement has been executed, the Company shall issue a customary press release (the "Press Release") describing
the terms of the transaction contemplated by the Transaction Documents. From and after the filing of the Press Release, no Buyer
shall be in possession of any material, nonpublic information received from the Company, any of its Subsidiaries or any of their
respective officers, directors, employees or agents, that is not disclosed in the Press Release. Other than the Press Release,
neither the Company, its Subsidiaries nor any Buyer shall issue any press releases or any other public statements with respect
to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any
Buyer, to make any press release or other public disclosure with respect to such transactions as is required by applicable law
and regulations, provided that each Buyer shall be consulted by the Company in connection with any such press release or other
public disclosure prior to its release. Without the prior written consent of any applicable Buyer, neither the Company nor any
of its Subsidiaries or affiliates shall disclose the name of such Buyer in the Press Release or any filing, announcement, release
or otherwise, except as required by law, provided that each Buyer shall be consulted by the Company in connection with any such
disclosure prior to such disclosure.


 


(i)          Additional
Notes; Variable Securities. So long as any Buyer beneficially owns any Securities, the Company will not issue any Notes other
than to the Buyers as contemplated hereby and the Company shall not issue any other securities that would cause a breach or default
under the Notes. For so long as any Securities remain outstanding, the Company shall not, in any manner, issue or sell any rights,
warrants or options to subscribe for or purchase Common Stock or directly or indirectly convertible into or exchangeable or exercisable
for Common Stock at a price which varies or may vary with the market price of the Common Stock, including by way of one or more
reset(s) to any fixed price unless the conversion, exchange or exercise price of any such security cannot be less than the then
applicable Conversion Price with respect to the Common Stock into which any Notes are convertible.


 


(j)          Corporate
Existence. So long as any Buyer beneficially owns any Securities, the Company shall (i) maintain its corporate existence and
(ii) not be party to any Fundamental Transaction unless the Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Notes.


 


(k)          Reservation
of Shares. The Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance,
no less than 130% of the maximum number of shares of Common Stock issuable upon conversion of the Notes (assuming for purposes
hereof, that the Notes are convertible at the Conversion Price and without taking into account any limitations on the conversion
of the Notes set forth therein) as determined as if issued as of the trading day immediately preceding the applicable date of determination
(the "Required Reserved Amount"). If at any time the number of shares of Common Stock 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 under Section 3(c), in the case of an insufficient number of authorized
shares, obtain stockholder approval of an increase in such authorized number of shares, and voting the management shares of the
Company in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient
to meet the Required Reserved Amount.


 




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(l)          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 result, either individually or in the aggregate,
in a Material Adverse Effect. The Company and its Subsidiaries shall at all times be in compliance with the Foreign Corrupt Practices
Act; the PATRIOT Act, and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations; and the laws, regulations
and Executive Orders and sanctions programs administered by the OFAC, including, without limitation, the "Anti-Money Laundering/OFAC
Laws".


 


(m)          
Public Information. At any time during the period commencing on the six (6) month anniversary of the Public Company Date and
ending at such time that all of the Securities, if a registration statement is not available for the resale of all of the Securities,
may be sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1),
if the Company shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the
failure to satisfy the current public information requirement under Rule 144(c) or (ii) if the Company has ever been an issuer
described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set
forth in Rule 144(i)(2) (a "Public Information Failure") then, as partial relief for the damages to any holder
of Securities by reason of any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive
of any other remedies available at law or in equity), the Company shall pay to each such holder an amount in cash equal to one
and one-half percent (1.5%) of the aggregate Purchase Price of such holder's Securities on the day of a Public Information Failure
and on every thirtieth day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (i) the date
such Public Information Failure is cured and (ii) such time that such public information is no longer required pursuant to Rule
144. The payments to which a holder shall be entitled pursuant to this Section 4(m) are referred to herein as "Public Information
Failure Payments." Public Information Failure Payments shall be paid on the earlier of (I) the last day of the calendar
month during which such Public Information Failure Payments are incurred and (II) the third Business Day after the event or failure
giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure
Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated
for partial months) until paid in full.


 


(n)          Additional
Issuances of Securities.


 


(i)          For
purposes of this Section 4(n), the following definitions shall apply.


 




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(1)         "Common
Stock Equivalents" means, collectively, Options and Convertible Securities.


 


(2)         "Convertible
Securities" means any stock or securities (other than Options) convertible into or exercisable or exchangeable for shares
of Common Stock.


 


(3)         "Options"
means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.


 


(4)         "Subsequent
Placement" means any direct or indirect offer, sale, grant of any option to purchase, or other disposition of (or announcement
of any offer, sale, grant or any option to purchase or other disposition of) any of the Company's or its Subsidiaries' debt, including
without limitation any Permitted Indebtedness.


 


(ii)         From
the Closing Date until a Full Collateralization Event (as defined in the Notes), the Company will not, directly or indirectly,
effect any Subsequent Placement unless the Company shall have first complied with this Section 4(n)(ii).


 


(1)         The
Company shall deliver to each Buyer an irrevocable written notice (the "Offer Notice") of any proposed or intended
issuance or sale or exchange (the "Offer") of the securities being offered (the "Offered Securities")
in a Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price
and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued,
sold or exchanged, (y) identify the persons or entities (if known) to which or with which the Offered Securities are to be
offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with the Buyers one hundred percent (100%) of
the Offered Securities, allocated among such Buyers based on each Buyer's pro rata portion of Notes issued and exchanged hereunder
(the "Basic Amount"). With respect to each Buyer that elects to purchase its Basic Amount, such Buyer may also
indicate it will purchase or acquire any additional portion of the Offered Securities attributable to the Basic Amounts of other
Buyers should the other Buyers subscribe for less than their Basic Amounts (the "Undersubscription Amount"), which
process shall be repeated until the Buyers shall have an opportunity to subscribe for any remaining Undersubscription Amount.


 




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(2)         To
accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the tenth (10th)
Business Day after such Buyer's receipt of the Offer Notice (the "Offer Period"), setting forth the portion of
such Buyer's Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the "Notice of Acceptance").
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has
set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amount it has subscribed for; provided, however, that if the Undersubscription
Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the
"Available Undersubscription Amount"), each Buyer who has subscribed for any Undersubscription Amount shall be
entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the
total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the
extent its deems reasonably necessary. Notwithstanding anything to the contrary contained herein, if the Company desires to modify
or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to the Buyers
a new Offer Notice and the Offer Period shall expire on the tenth (10th) Business Day after such Buyer's receipt of such new Offer
Notice.


 


(3)         The
Company shall have five (5) Business Days from the expiration of the Offer Period above to offer, issue, sell or exchange all or
any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Buyers (the "Refused Securities")
pursuant to a definitive agreement (the "Subsequent Placement Agreement") but only to the offerees described in
the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest
rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in
the Offer Notice and (ii) to publicly announce (a) the execution of such Subsequent Placement Agreement, and (b) either (x) the
consummation of the transactions contemplated by such Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement, which, from and after the Public Company Date, shall be filed with the SEC on a Current Report on Form 8-K
with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.


 


(4)         In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 4(n)(ii)(3) above), then each Buyer may, at its sole option and in its sole discretion, reduce the number
or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or
amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(n)(ii)(2) above multiplied by a fraction,
(i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or
exchange (including Offered Securities to be issued or sold to Buyers pursuant to Section 4(n)(ii)(3) above prior to such reduction)
and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects
to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or
exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered
to the Buyers in accordance with Section 4(n)(ii)(1) above.


 




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(5)         Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Buyers shall acquire from
the Company, and the Company shall issue to the Buyers, the number or amount of Offered Securities specified in the Notices of
Acceptance, as reduced pursuant to Section 4(n)(ii)(3) above if the Buyers have so elected, upon the terms and conditions specified
in the Offer. The purchase by the Buyers of any Offered Securities is subject in all cases to the preparation, execution and delivery
by the Company and the Buyers of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance
to the Buyers and their respective counsel.


 


(6)         Any
Offered Securities not acquired by the Buyers or other persons in accordance with Section 4(n)(ii)(3) above may not be issued,
sold or exchanged until they are again offered to the Buyers under the procedures specified in this Agreement.


 


(7)         The
Company and the Buyers agree that if any Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with
respect to such Offer nor any other transaction documents related thereto (collectively, the "Subsequent Placement Documents")
shall include any term or provisions whereby any Buyer shall be required to agree to any restrictions in trading as to any securities
of the Company owned by such Buyers prior to such Subsequent Placement.


 


(8)         Notwithstanding
anything to the contrary in this Section 4(n) and unless otherwise agreed to by the Required Holders, the Company shall either
confirm in writing to the Buyers that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly
disclose its intention to issue the Offered Securities, in either case in such a manner such that the Buyers will not be in possession
of material non-public information, by the fifteenth (15th) Business Day following delivery of the Offer Notice. If
by the fifteenth (15th) Business Day following delivery of the Offer Notice no public disclosure regarding a transaction
with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received
by the Buyers, such transaction shall be deemed to have been abandoned and the Buyers shall not be deemed to be in possession of
any material, non-public information with respect to the Company. Should the Company decide to pursue such transaction with respect
to the Offered Securities, the Company shall provide each Buyer with another Offer Notice and each Buyer will again have the right
of participation set forth in this Section 4(n)(ii). From and after the Public Company Date, the Company shall not be permitted
to deliver more than one such Offer Notice to the Buyers in any 60-day period.


 


(o)          Taxes.
The Company will pay, and save and hold the Buyers harmless from any and all liabilities (including interest and penalties) with
respect to, or resulting from any delay or failure in paying, stamp and other taxes (other than income taxes), if any, which may
be payable or determined to be payable by the Company on the execution and delivery or acquisition of the Notes or the Conversion
Shares.


 


(p)          Books
and Records. The Company will keep proper books of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Company and its Subsidiaries in accordance with GAAP.


 




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(q)          Collateral
Agent.


 


(i)          Each
Buyer hereby (a) appoints Hudson Bay as the collateral agent hereunder and under the Security Documents (in such capacity, the
"Collateral Agent"), and (b) authorizes the Collateral Agent (and its officers, directors, employees and agents)
to take such action on such Buyer's behalf in accordance with the terms hereof and thereof. The Collateral Agent shall not have,
by reason hereof or pursuant to any Security Documents, a fiduciary relationship in respect of any Buyer. Neither the Collateral
Agent nor any of its officers, directors, employees and agents shall have any liability to any Buyer for any action taken or omitted
to be taken in connection hereof or the Security Documents except to the extent caused by its own gross negligence or willful misconduct,
and each Buyer agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers, directors,
employees and agents (collectively, the "Collateral Agent Indemnitees") from and against any losses, damages,
liabilities, obligations, penalties, actions, judgments, suits, fees, costs and expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses) incurred by such Collateral Agent Indemnitee, whether direct, indirect or consequential, arising
from or in connection with the performance by such Collateral Agent Indemnitee of the duties and obligations of Collateral Agent
pursuant hereto or any of the Security Documents.


 


(ii)         The
Collateral Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person,
and with respect to all matters pertaining to this Agreement or any of the other Transaction Documents and its duties hereunder
or thereunder, upon advice of counsel selected by it.


 


(iii)        The
Collateral Agent may resign from the performance of all its functions and duties hereunder and under the Notes and the Security
Documents at any time by giving at least ten (10) Business Days prior written notice to the Company and each holder of the Notes.
Such resignation shall take effect upon the acceptance by a successor Collateral Agent of appointment as provided below. Upon any
such notice of resignation, the holders of a majority of the outstanding principal amount of Notes shall appoint a successor Collateral
Agent. Upon the acceptance of the appointment as Collateral Agent, such successor Collateral Agent shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall
be discharged from its duties and obligations under this Agreement, the Notes and the Security Agreement. After any Collateral
Agent's resignation hereunder, the provisions of this Section 4(q) shall inure to its benefit. If a successor Collateral Agent
shall not have been so appointed within said ten (10) Business Day period, the retiring Collateral Agent shall then appoint a successor
Collateral Agent who shall serve until such time, if any, as the holders of a majority of the outstanding principal amount of Notes
appoints a successor Collateral Agent as provided above.


 


(iv)        The
Company hereby covenants and agrees to take all actions as promptly as practicable reasonably requested by either the holders of
a majority of the outstanding principal amount of Notes or the Collateral Agent (or its successor), from time to time pursuant
to the terms of this Section 4(q), to secure a successor Collateral Agent satisfactory to such requesting part(y)(ies), in their
sole discretion, including, without limitation, by paying all fees of such successor Collateral Agent, by having the Company agree
to indemnify any successor Collateral Agent and by each of the Company executing a collateral agency agreement or similar agreement
and/or any amendment to the Security Documents reasonably requested or required by the successor Collateral Agent.


 




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(v)         Each
Buyer hereby acknowledges and agrees that, given that there is a cost as well as a benefit to perfecting a security interest in
the Collateral, that the Collateral Agent will not initially perfect its security interest in all assets of the Company, including
in Intellectual Property outside of the United States. Each Buyer further acknowledges and agrees that the indemnification of the
Collateral Agent Indemnitees will apply regardless of whether or not the Collateral Agent perfects its security interest in all
Collateral. If a Buyer desires that the Collateral Agent perfect its security interest in any Collateral that is not otherwise
perfected, such Buyer shall notify the Collateral Agent in writing of such desire along with a cost/benefit analysis of such perfection.
The Collateral Agent will consider any such request and will otherwise take direction from the holders of a majority of the outstanding
principal amount of Notes.


 


(r)          Termination
of Security Agreement. Upon a Full Collateralization Event (as defined in the Notes, the Collateral Agent shall promptly consent
to the termination of the Security Agreement and shall release all liens granted to the Collateral Agent thereunder; provided,
however, that notwithstanding anything to the contrary contained herein, the termination of the Security Agreement shall
not have any impact on the Cash Collateral Agreement or the Deposit Account Control Agreement, which shall survive a Full Collateralization
Event and continue in full force and effect after a Full Collateralization Event. The Parties hereto acknowledge and agree that
as of the Closing Date, the Collateral Agent will not require the Company to file documentation to perfect the security interest
in Intellectual Property outside the United States. Notwithstanding the foregoing, upon the written request of the Collateral Agent,
the Company shall secure or perfect the security interest in any such Intellectual Property or other Collateral in accordance with
the terms of the Security Documents.


 


(s)          Withdrawals
from the Control Account. The parties hereto acknowledge and agree that, from and after a Full Collateralization Event, in
addition to any other rights of the Collateral Agent, the Collateral Agent shall be entitled to withdraw any or all amounts in
the Control Account from time to time (each a "Note Withdrawal" and collectively, the "Note Withdrawals"),
as long as any the amount of any such Note Withdrawal is applied against the Conversion Amount of the Notes in accordance with
the terms of the Notes or any amount outstanding under the Notes, applied in each instance pro-rata among the Notes (except with
the prior written consent of each Holder of Notes with respect to any such payment which is not pro-rata in accordance with the
respective outstanding principal amounts of each Note).


 


(t)          Release
of Liens. On or prior to the Closing Date, the Company shall cause all Liens with respect to assets of the Company and its
Subsidiaries (other than those in favor of the Collateral Agent or the Buyers) to be released, including without limitation Liens
in favor of Joseph Beyers.


 




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(u)          Existing
Deposit Control Agreement. The parties hereby acknowledge and agree that on or prior to the Closing the Collateral Agent and
the Company shall deliver a joint notice to Wells Fargo Bank, National Association (the "Existing DACA Bank")
instructing the Existing DACA Bank to transfer any and all cash deposited in the Collateral Accounts (as defined in the Deposit
Account Control Agreement (as defined in the Existing SPA)) to the Control Account (as defined herein) and, upon such transfer,
to terminate the Deposit Account Control Agreement (as defined in the Existing SPA). The Collateral Agent and the Company agree
that upon acceptance by the Existing DACA Bank of the notice set forth in the immediately preceding sentence, the Deposit Account
Control Agreement (as defined in the Existing SPA) shall have no further force and effect.


 


(v)         Threshold
Price. The definition of "Threshold Price" in the Existing SPA is hereby replaced in its entirety with the following:


 


""Threshold
Price" means $1.61 (as adjusted for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications,
combinations, reverse stock splits or other similar events occurring after March 23, 2014)."


 


(w)          Modification
of Common Stockholder Lock-Up Agreements executed on or about May 9, 2013. Effective upon the Closing, the “Release Percentage”
as defined in those certain Lock-Up Agreements dated on or about May 9, 2013 between the Company and certain holders of common
stock of the Company party thereto, shall be triggered upon the earliest of (i) the Full Collateralization Event, (ii) when no
Indebtedness is secured by the referenced patents and (iii) upon the redemption in full of all of the Notes.


 


(x)          Closing
Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be
delivered, to each Buyer and Schulte Roth & Zabel LLP a complete closing set of the executed Transaction Documents, Securities
and any other documents required to be delivered to any party pursuant to Section 7 hereof or otherwise.


 


5.          REGISTER.


 


The Company shall maintain
at its principal executive offices (or such other office or agency of the Company as it may designate by notice to each holder
of Securities), a register for the Notes in which the Company shall record the name and address of the Person in whose name the
Notes have been issued (including the name and address of each transferee), the aggregate principal amount of Notes held by such
Person and the number of Conversion Shares issuable upon conversion of the Notes 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.


 


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


 


The obligation of the
Company hereunder to issue and sell the Notes 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:


 




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


 


(ii)         Such
Buyer shall have delivered to the Company the Purchase Price (less, in the case of Hudson Bay, the amount withheld pursuant to
Section 4(f)) for the Notes being purchased by such Buyer at the Closing by wire transfer of immediately available funds.


 


(iii)        The
representations and warranties of such Buyer shall be true and correct as of the date when made and as of the Closing Date as though
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 specified date), and such Buyer shall have performed, satisfied and complied 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 the Notes 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:


 


(i)          The
Company shall have duly executed and delivered to such Buyer (A) each of the Transaction Documents and (B) the Notes (allocated
in such principal amounts as such Buyer shall request) being purchased by such Buyer at the Closing pursuant to this Agreement.


 


(ii)         Such
Buyer shall have received the opinion of Ellenoff Grossman & Schole LLP, the Company's outside counsel, dated as of the Closing
Date, in substantially the form of Exhibit C attached hereto.


 


(iii)        The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each of
its Subsidiaries in each such entity's jurisdiction of formation issued by the Secretary of State (or equivalent) of such jurisdiction
of formation as of a date within ten (10) days of the Closing Date.


 


(iv)        The
Company shall have delivered to such Buyer a certificate evidencing the Company's qualification as a foreign corporation and good
standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business and
is required to so qualify, as of a date within ten (10) days of the Closing Date.


 


(v)         The
Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Closing
Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company's board of directors in a form reasonably
acceptable to such Buyer, (ii) the Certificate of Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the
form attached hereto as Exhibit D.


 




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(vi)        The
representations and warranties of the Company shall be true and correct as of the date when made and as of the Closing Date as
though 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 specified date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to
the Closing Date. Such Buyer shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as
of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form
attached hereto as Exhibit E.


 


(vii)       The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities.


 


(viii)      The
Company shall have delivered to counsel for the Collateral Agent evidence of the payment in full of all Indebtedness under that
certain Secured Promissory Note dated December 19, 2013 from the Company to Joseph Beyers in the principal amount of $3,000,000,
as amended on February 6, 2014 (the "Beyers Loan Agreement"), together with (A) a termination and release agreement
with respect to the Beyers Loan Agreement and all related documents, duly executed by Joseph Beyers and the Company, (B) a termination
of security interest in intellectual property for each assignment for security recorded by Joseph Buyers at the United States Patent
and Trademark Office, a comparable office in any other jurisdiction or otherwise and covering any intellectual property of the
Company and its Subsidiaries, and (C) UCC-3 termination statements for all UCC-1 financing statements filed by Joseph Beyers and
covering any portion of the Collateral (as defined in the Security Agreement), to be released to the Collateral Agent at the Closing.
After payment in full of all Indebtedness under the Beyers Loan Agreement, the Company shall have no Indebtedness (other than ordinary
course expense reimbursements and payroll expenses) owed to Joseph Beyers or any of his affiliates.


 


(ix)         Within
six (6) Business Days prior to the Closing, the Company shall have delivered or caused to be delivered to each Buyer certified
copies of UCC search results, listing all effective financing statements which name as debtor the Company or any of its Subsidiaries
filed in the prior five years to perfect an interest in any assets thereof, together with copies of such financing statements,
none of which, except as otherwise agreed in writing by the Buyers, shall cover any of the Collateral (as defined in the Security
Documents) and the results of searches for any tax lien and judgment lien filed against such Person or its property, which results,
except as otherwise agreed to in writing by the Buyers shall not show any such Liens (as defined in the Security Documents).


 


(x)          The
Collateral Agent shall have received (i) the Cash Collateral Agreement, duly executed by the Collateral Agent and the Company and
(ii) the Deposit Account Control Agreement, duly executed by the Collateral Agent, the Company and the Bank.


 


(xi)         The
Company shall have delivered to each Buyer the Deposit Account Control Agreement, duly executed by all parties thereto and declared
effective by the Bank.


 




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(xii)        The
Company shall have delivered to each Buyer an amendment (the "Merger Agreement Amendment") to that certain Agreement
of Merger and Plan of Reorganization (the "Merger Agreement") by and among the Company, eOn Communications Corporation
and Inventergy Merger Sub, Inc. dated as of December 17, 2013 in the form attached hereto as Exhibit F, executed by the Company,
eOn Communications Corporation and Inventergy Merger Sub, which Merger Agreement Amendment shall contemplate (i) the exchange of
the New Notes for senior secured convertible notes of the Parent (as defined in the Merger) in the form of Exhibit C attached thereto,
(ii) the exchange of the Amended and Restated Notes for senior secured convertible notes of the Parent in the form of Exhibit B
attached thereto (the "eOn Amended and Restated Notes") and (iii) that the eOn Amended and Restated Notes will
be issued by the Parent to the holder of the Amended and Restated Notes pursuant to the registration statement on Form S-4 (File
No. 333-193837), as amended or supplemented from time to time.


 


(xiii)       The
Company shall have paid in cash by wire transfer of immediately available funds to each applicable Buyer all accrued and unpaid
interest on the Existing Notes through and including the Closing Date.


 


(xiv)      The
Security Agreement shall be in full force and effect.


 


(xv)       The
Company shall have delivered to such Buyer such other documents 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 on or before five (5) Business Days from the date hereof due to the Company's
or such Buyer's failure to satisfy the conditions set forth in Sections 6 and 7 above (and the nonbreaching party's failure to
waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate this Agreement with respect to
such breaching party at the close of business on such date by delivering a written notice to that effect to each other party to
this Agreement and without liability of any party to any other party; provided, however, that if this Agreement is terminated pursuant
to this Section 8, the Company shall remain obligated to reimburse Hudson Bay or its designee(s), as applicable, for the expenses
described in Section 4(f) above.


 




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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. 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, 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. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.


 


(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; provided that a facsimile
signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile signature.


 


(c)          Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.


 


(d)          Severability.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).


 




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(e)          Entire
Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or written agreements
between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein,
and this Agreement, the other Transaction Documents and the instruments referenced herein and therein 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. Provisions
of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the holders of at least a majority of the aggregate
principal amount of Notes outstanding as of the applicable date of determination, which shall include Hudson Bay as long as Hudson
Bay or any of its affiliates holds at least $50,000 in aggregate amount of Notes (the "Required Holders"); provided
that any such amendment or waiver that complies with the foregoing but that disproportionately, materially and adversely affects
the rights and obligations of any Buyer relative to the comparable rights and obligations of the other Buyers shall require the
prior written consent of such adversely affected Buyer; provided, further, that the provisions of Section 4(q) cannot be amended
without the additional prior written approval of the Collateral Agent or its successor. Any amendment or waiver effected in accordance
with this Section 9(e) shall be binding upon each Buyer and holder of Securities and the Company. No such amendment shall be effective
to the extent that it applies to less than all of the Buyers or holders of Securities. No consideration shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same
consideration (other than the reimbursement of legal fees) also is offered to all of the parties to the Transaction Documents,
holders of Notes. The Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions
of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting
the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment or promise or
has any other obligation to provide any financing to the Company or otherwise.


 


(f)          Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party) or by electronic mail; or (iii) one Business Day after deposit with an overnight courier service, in each case properly
addressed to the party to receive the same. The addresses, facsimile numbers and email addresses for such communications shall
be:


 


If to the Company:


 


Inventergy, Inc.

19925 Stevens Creek Boulevard, Suite 100

Cupertino, CA 95014

Telephone:     (408) 973-7896

Facsimile:      (408) 725-8885

Email:            joe@inventergy.com

Attention:       Joe Beyers


 




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With a copy (for informational
purposes only) to:


 


Ellenoff Grossman & Schole
LLP

1345 Avenue of the Americas

New York, NY 10105

Telephone:       (212) 370-1300

Facsimile:        (212) 370-7889

Email:              jsmith@egsllp.com

Attention:         Joseph A. Smith


 


If to a Buyer, to its address, facsimile
number and email address set forth on the Schedule of Buyers, with copies to such Buyer's representatives as set forth on the Schedule
of Buyers,


 


with a copy (for informational
purposes only) to:


 


Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone:      (212) 756-2000

Facsimile:       (212) 593-5955

E-mail:             eleazer.klein@srz.com

Attention:        Eleazer N. Klein, Esq.


 


or to such other address, facsimile number
and/or email 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) mechanically or electronically generated by the sender's facsimile
machine or email containing the time, date, recipient facsimile number and an image of the first page of such transmission 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.


 


(g)          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 the Notes. The Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Required Holders, including by way of a Fundamental Transaction (unless the Company is
in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes). A Buyer may assign some
or all of its rights hereunder without the consent of the Company, in which event such assignee shall be deemed to be a Buyer hereunder
with respect to such assigned rights.


 


(h)          No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except that
each Indemnitee shall have the right to enforce the obligations of the Company with respect to Section 9(k).


 




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(i)          Survival.
Unless this Agreement is terminated under Section 8, the representations and warranties of the Company and the Buyers contained
in Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and 9 shall survive the Closing and the delivery
and conversion of the Securities, as applicable. Each Buyer shall be responsible only for its own representations, warranties,
agreements and covenants hereunder.


 


(j)          Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.


 


(k)          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 other holder of the 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 (a) any misrepresentation or breach of any representation
or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby
or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any
other certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit 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) and
arising out of or resulting from (i) the execution, delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) 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 (iii) the status of such Buyer or holder
of the Securities as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents. 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 that is permissible under applicable law.


 




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(ii)         Promptly
after receipt by an Indemnitee under this Section 9(k) 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 for indemnification in
respect thereof is to be made against any indemnifying party under this Section 9(k), deliver to the indemnifying party a written
notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnitee; provided, however, that an Indemnitee shall have the right
to retain its own counsel with the fees and expenses of not more than one counsel for such Indemnitee to be paid by the indemnifying
party, if, in the reasonable opinion of counsel for the Indemnitee, the representation by such counsel of the Indemnitee and the
indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnitee and any other
party represented by such counsel in such proceeding. Legal counsel referred to in the immediately preceding sentence shall be
selected by the Investors holding at least a majority of the Purchased Shares. The Indemnitee shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or Indemnified Liabilities by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to the Indemnitee that relates to such action or Indemnified
Liabilities. The indemnifying party shall keep the Indemnitee fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnitee, which consent
shall not be unreasonably withheld conditioned or delayed, 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 Liabilities or litigation. Following indemnification as provided for
hereunder, the indemnifying party 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 indemnifying
party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability
to the Indemnitee under this Section 9(k), except to the extent that the indemnifying party is prejudiced in its ability to defend
such action.


 


(iii)        The
indemnification required by this Section 9(k) 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 Indemnified Liabilities are incurred.


 


(iv)        The
indemnity agreements contained herein shall be in addition to (x) any cause of action or similar right of the Indemnitee against
the indemnifying party or others, and (y) any liabilities the indemnifying party may be subject to pursuant to the law.


 


(l)          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.


 




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(m)          Remedies.
Each Buyer and each holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights
which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event
that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy at law
may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to seek temporary
and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or
other security.


 


(n)          Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
the Transaction Documents, whenever any Buyer 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 Buyer 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.


 


(o)          Payment
Set Aside. To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any of the other
Transaction Documents or the Buyers enforce or exercise their rights hereunder or 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, foreign, 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.


 


(p)          Reproduction
of Documents. This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications
which may hereafter be executed, (b) documents received by the Buyers on the Closing Date (except for certificates evidencing the
Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to the Buyers,
may be reproduced by any Buyer by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar
process and any Buyer may destroy any original document so reproduced. All parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original
is in existence and whether or not such reproduction was made by a Buyer in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.


 




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(q)          Independent
Nature of Buyers' Obligations and Rights. The obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations
of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the
Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Buyers are in any way acting in concert or as a group, and the Company shall not assert any such claim with respect to
such obligations or the transactions contemplated by the Transaction Documents and the Company acknowledges that the Buyers are
not acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.
The Company acknowledges and each Buyer confirms that it has independently participated in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall
not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.


 


[Signature Page Follows]


 




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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:
	 	 
	 	INVENTERGY, INC.
	 	 	 
	 	By:	/s/ Joe Beyers
	 	 	Name: Joe Beyers
	 	 	Title: Chairman and CEO


 




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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.


 


	 	BUYERS:
	 	 
	 	
        HUDSON BAY IP OPPORTUNITIES 

        MASTER FUND LP

	 	 
	 	
        By: Hudson Bay Capital Management LP, as

        its Investment Manager

	 	 	 
	 	By:	 /s/ Yoav Roth
	 	 	Name: Yoav Roth
	 	 	Title: Authorized Signatory


 




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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.


 


	 	BUYERS:
	 	 
	 	HS CONTRARIAN INVESTMENTS, LLC
	 	 
	 	By:	 /s/ John Stetson
	 	 	Name: John Stetson
	 	 	Title: Managing Member


 




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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.


 


	 	BUYERS:
	 	 
	 	GRQ CONSULTANTS, INC. 401K
	 	 
	 	By:	/s/ Barry Honig
	 	 	Name: Barry Honig
	 	 	Title: Trustee


 




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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.


 


	 	BUYERS:
	 	 
	 	
        GRQ CONSULTANTS, INC.

	 	 	 
	 	By:	/s/ Barry Honig
	 	 	Name: Barry Honig
	 	 	Title: President


 




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EXHIBITS


 


	Exhibit A-1	Form of New Note
	Exhibit A-2	Form of Amended and Restated Note
	Exhibit B-1	Form of Cash Collateral Agreement
	Exhibit B-2	Form of Deposit Account Control Agreement
	Exhibit C	Form of Outside Company Counsel Opinion
	Exhibit D	Form of Secretary's Certificate
	Exhibit E	Form of Officer's Certificate
	Exhibit F	Form of Merger Agreement Amendment


 




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