Exhibit 10.5


 


SECURITIES
PURCHASE AGREEMENT


 


This
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of July 25, 2016, between Nxt-ID, Inc.,
a Delaware corporation (the “Company”), and each purchaser identified on the Schedule of Purchasers hereto
(each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).


 


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


 


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


 


ARTICLE
I.


DEFINITIONS


 


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


 


“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.


 


“Action”
means any action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign).


 


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


 


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


 


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


 


“Bylaws”
shall mean the Company’s bylaws, as amended and as in effect on the date hereof.


 






     

     

    

 


“Certificate
of Designation” means the Certificate of Designation to be filed prior to the Closing by the Company with the Secretary
of State of Delaware, in the form of Exhibit A attached hereto.


 


“Certificate
of Incorporation” shall mean the Company’s Certificate of Incorporation, as amended and as in effect on the date
hereof.


 


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


 


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


 


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


 


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


 


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


 


“Company
Counsel” means Robinson Brog Leinwand Greene Genovese & Gluck P.C., with offices located at 875 Third Avenue, 9th
Floor, New York, NY 1002.


 


“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.


 


“Conversion
Price” shall have the meaning ascribed to such term in the Certificate of Designation.


 


“Conversion
Shares” shall mean the shares of Common Stock issuable upon conversion of the Preferred Stock as described in the Certificate
of Designation.


 


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


 


“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.


 



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“Effective
Date” means the earliest of the date that (a) the initial Registration Statement has been declared effective by the
Commission, (b) all of the Underlying Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the
requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume
or manner-of-sale restrictions, (c) following the one year anniversary of the Closing Date provided that a holder of Underlying
Shares is not an Affiliate of the Company, or (d) all of the Underlying Shares may be sold pursuant to an exemption from registration
under Section 4(1) of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such
holders a standing written unqualified opinion that resales may then be made by such holders of the Underlying Shares pursuant
to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.


 


“Environmental
Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without
limitation, laws relating to emissions, discharges, releases or threatened releases of Hazardous Materials into the environment,
or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.


 


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


 


“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of
Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered
to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such
securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance
shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.


 



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


 


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


 


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


 


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


 


“Hazardous
Materials” means any chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes.


 


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


 


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


 


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


 


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


 


“Liens”
means all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances,
security interests and other encumbrances.


 


“Lock-Up
Agreement” means the Lock-Up Agreement, dated as of the date hereof, by and among the Company and the directors and
officers.


 


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


 


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


 


“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.12(a).


 


“Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and any Governmental Entity or any department or agency thereof.


 


“Placement
Agent” means Aegis Capital Corp.


 



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“Preferred
Stock” means the up to 4,500,000 shares of the Company’s Series B Convertible Preferred Stock issued hereunder
having the rights, preferences and privileges set forth in the Certificate of Designation, in the form of Exhibit A hereto.


 


“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.12(b).


 


“Pro
Rata Portion” shall have the meaning ascribed to such term in Section 4.12(e).


 


“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Required
Minimum” means, as of any date, 250% of the maximum aggregate number of shares of Common Stock then issued or potentially
issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of
all Warrants or conversion in full of all shares of Preferred Stock, ignoring any conversion or exercise limits set forth therein,
and assuming that any previously unconverted shares of Preferred Stock are held until the first anniversary of the Closing Date
and all dividends are paid in shares of Common Stock until such anniversary.


 


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


 



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


 


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


 


“Securities”
means the Preferred Stock, the Warrants, the Warrant Shares and the Underlying Shares.


 


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


 


“Shareholder
Approval” means such approval as may be required by the applicable rules and regulations of the NYSE MKT/the Nasdaq
Stock Market/The New York Stock Exchange (or any successor entity) from the shareholders of the Company with respect to the transactions
contemplated by the Transaction Documents, including the issuance of all of the Underlying Shares in excess of 19.99% of the issued
and outstanding Common Stock on the Closing Date.


 


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


 


“Stated
Value” means $1.00 per share of Preferred Stock.


 


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


 


“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.12(a).


 


“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.12(b).


 


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


 


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


 


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


 



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


 


“Transfer
Agent” means Continental Stock Transfer & Trust Company, LLC, and any successor transfer agent of the Company.


 


“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Preferred Stock, upon
exercise of the Warrants and issued and issuable in lieu of the cash payment of dividends on the Preferred Stock in accordance
with the terms of the Certificate of Designation.


 


“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(b).


 


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


 


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


 


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


 



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ARTICLE
II.


PURCHASE
AND SALE


 


2.1             
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, up to an aggregate of $4,500,000 of shares of Preferred Stock with an aggregate Stated Value
for each Purchaser equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such
Purchaser, and Warrants as determined by pursuant to Section 2.2(a). The aggregate number of shares of Preferred Stock sold hereunder
shall be up to 4,500,000. Each Purchaser shall deliver to the Company, via wire transfer or a certified check, immediately available
funds equal to its Subscription Amount and the Company shall deliver to each Purchaser its respective shares of Preferred Stock
and Warrants as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth
in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3,
the Closing shall occur at the offices of EGS or such other location as the parties shall mutually agree.


 


2.2            Deliveries.




 


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


 


 (i)               this Agreement duly executed by the Company;


 




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


 


(iii)            
a certificate evidencing a number of shares of Preferred Stock equal to such Purchaser’s Subscription Amount divided by
the Stated Value, registered in the name of such Purchaser and evidence of the filing and acceptance of the Certificate of Designation
from the Secretary of State of Delaware;


 


(iv)            
a Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 50% of such Purchaser’s
Conversion Shares, with an exercise price equal to $0.75, subject to adjustment therein (such Warrant certificate may be delivered
within three Trading Days of the Closing Date);


 


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


 


(vi)            
the Lock-Up Agreements; and


 


(vii)          
the Registration Rights Agreement duly executed by the Company.


 


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


 


(i)             this
Agreement duly executed by such Purchaser;




 


(ii)              
such Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company; and


 



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


 


2.3           Closing
Conditions.




 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 



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ARTICLE
III.


REPRESENTATIONS
AND WARRANTIES


 


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


 


(a)          
Organization and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly
existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority
to own their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each
of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used
in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties,
assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or
any Subsidiary, either individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction
Documents or (iii) the authority or ability of the Company to perform any of its obligations under any of the Transaction Documents.
Other than the Persons (as defined below) set forth in the SEC Reports (as defined below) the Company has no Subsidiaries. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity
or similar interest of such Person or (II) controls or operates all or any part of the business, operations or administration
of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”


 


(b)          
Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
The execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Stock and the
reservation for issuance and issuance of the Conversion Shares issuable under the Certificate of Designation with respect to the
Preferred Stock,) have been duly authorized by the Board of Directors and (other than any filings as may be required by the Transaction
Documents, the Commission, including a Form D, and by any state securities agencies or the Trading Market (as defined below))
no further filing, consent or authorization is required by the Company, its Board of Directors or its stockholders or other governing
body other than in connection with the Required Approvals. This Agreement has been, and the other Transaction Documents will be
prior to the Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with its respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights
to indemnification and to contribution may be limited by federal or state securities law. The Certificate of Designation has been
filed with the Secretary of State of the State of Delaware and is in full force and effect, enforceable against the Company in
accordance with its terms and has not been amended. The SEC Reports contain copies of the Certificate of Incorporation and the
Bylaws, and no amendment to modification to the Certificate of Incorporation or Bylaws as been implemented but not been publicly
disclosed, and no such amendment or modification is contemplated.


 



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(c)          
Issuance of Securities. The Securities are duly authorized and, when issued and paid for in accordance with the terms of
the applicable Transaction Documents, will be duly and validly issued, fully paid and non-assessable and free and clear from all
Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Underlying Shares,
when and to the extent issued and sold in exchange for payment in full to the Company of all consideration required therefor as
applicable, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.
As of the Closing, the Company shall have reserved from its duly authorized capital stock not less than the Required Minimum.


 


(d)          
No Conflicts. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance
of the Securities and the reservation for issuance of the Underlying Shares) will not (i) result in a violation of the Certificate
of Incorporation (including, without limitation, any certificates of designation contained therein), the Certificate of Designation
or other organizational documents of the Company or any of its Subsidiaries, any capital stock of the Company, or Bylaws, (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 the Company or any of its Subsidiaries is a party or (iii) subject to the Required Approvals, result in a violation of
any law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities laws
and regulations and the rules and regulations of the Trading Market) applicable to the Company or any of its Subsidiaries or by
which any property or asset of the Company or any of its Subsidiaries is bound or affected, except, in the case of clause (ii)
or (iii) above, to the extent such violations that could not reasonably be expected to have a Material Adverse Effect.


 



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(e)           
Consents and Approvals. Except as disclosed in the SEC Reports, the Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local
or other Governmental Entity or other Person in connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than: (i) the filings required pursuant to Section 4.6 of this Agreement; (ii) the filing with the
Commission pursuant to the Registration Rights Agreement; (iii) the notice and/or application(s) to each applicable Trading Market
for the issuance and sale of the Securities and the listing of the Underlying Shares for trading thereon in the time and manner
required thereby; (iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state
securities laws; and (v) Shareholder Approval (collectively, the “Required Approvals”). Except as disclosed
in the SEC Reports, the Company is not in violation of the requirements of the Trading Market and has no knowledge of any other
facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. “Governmental
Entity” means any (i) nation, state, county, city, town, village, district, or other political jurisdiction of any nature;
(ii) federal, state, local, municipal, foreign, or other government; (iii) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); (iv) multi-national
organization or body; or (v) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise
owned or controlled by a government or a public international organization or any of the foregoing.


 


(f)           
Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that each Purchaser
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 Purchaser is (i) an officer or director of the Company or any of its Subsidiaries,
(ii) an “affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge,
a “beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the
Exchange Act). The Company further acknowledges that no Purchaser 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 Purchaser 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 Purchaser’s purchase of the
Securities. The Company further represents to each Purchaser 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.


 



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(g)          
Placement Agent. Except for the Placement Agent, neither the Company nor any of its Subsidiaries has engaged any placement
agent or other agent in connection with the offer or sale of the Securities.


 


(h)          
No Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their
behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company. None of the
Company, its Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps that would cause
the offering of any of the Securities to be integrated with other offerings of securities of the Company.


  


(i)            
Dilutive Effect. The Company understands and acknowledges that the number of Conversion Shares will increase in certain
circumstances. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Preferred
Stock in accordance with this Agreement and the Certificate of Designation (as well as the Company’s obligation to issue
the Warrant Shares upon exercise of the Warrants) is absolute and unconditional, regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the Company.


  


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


 



    	 	13	 



     

    

 


(k)           
SEC Reports ; Financial Statements. During the two (2) years prior to the date hereof, or for as long as the Company has
had Commission reporting obligations under the Exchange Act, the Company has filed all reports, schedules, forms, proxy statements,
statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange
Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and financial statements,
notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC
Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension. True, correct and complete copies of each of the SEC Reports are available on the
EDGAR system. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Exchange
Act and the rules and regulations of the Commission promulgated thereunder applicable to the SEC Reports, and none of the SEC
Reports, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. As of their respective dates, the financial statements (the “Financial Statements”)
of the Company included in the SEC Reports complied in all material respects with applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto as in effect as of the time of filing. Such Financial Statements
have been prepared in accordance with United States generally accepted accounting principles (“GAAP”), consistently
applied, during the periods involved (except (i) as may be otherwise indicated in such Financial Statements or the notes thereto,
or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements)
and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments
which will not be material, either individually or in the aggregate). No other information provided by or on behalf of the Company
to any of the Purchasers which is not included in the SEC Reports contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance under
which they are or were made. The Company is not currently contemplating to amend or restate any of the Financial Statements (including,
without limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included in the
SEC Reports, nor is the Company currently aware of facts or circumstances which would require the Company to amend or restate
any of the Financial Statements, in each case, in order for any of the Financials Statements to be in compliance with GAAP and
the rules and regulations of the SEC. The Company has not been informed by its independent accountants that they recommend that
the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate any
of the Financial Statements. 


 






    	 	14	 



     

    

 


(l)           
Absence of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in
a Form 10-K, except as disclosed in the SEC Reports filed subsequent to such Form 10-K, there has been no material adverse change
and no material adverse development in the business, assets, liabilities, properties, operations (including results thereof),
condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries. Since the date of the Company’s
most recent audited financial statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared
or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business or (iii)
made any material capital expenditures, individually or in the aggregate, outside of the ordinary course of business. Neither
the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy,
insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge
or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual
knowledge of any fact which would reasonably lead a creditor to do so. 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. For purposes of this Section 3.1(l), “Insolvent” means, (I) with respect
to the Company and its Subsidiaries, on a consolidated basis, (i) the present fair saleable value of the Company’s and its
Subsidiaries’ assets is less than the amount required to pay the Company’s and its Subsidiaries’ total Indebtedness,
(ii) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured or (iii) the Company and its Subsidiaries intend to incur or believe that
they will incur debts that would be beyond their ability to pay as such debts mature; and (II) with respect to the Company and
each Subsidiary, individually, (i) the present fair saleable value of the Company’s or such Subsidiary’s (as the case
may be) assets is less than the amount required to pay its respective total Indebtedness, (ii) the Company or such Subsidiary
(as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured or (iii) the Company or such Subsidiary (as the case may be) intends to incur or believes
that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor any
of its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction,
for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital.


 


(m)         
No Undisclosed Events, Liabilities, Developments or Circumstances. Except as set forth in the SEC Reports, no event, liability,
development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, any
of its Subsidiaries or any of their respective businesses, properties, liabilities, prospects, operations (including results thereof)
or condition (financial or otherwise) that (i) would be required to be disclosed by the Company under applicable securities laws
on a registration statement on Form S-1 filed with the Commission relating to an issuance and sale by the Company of its Common
Stock and which has not been publicly announced, (ii) could have a material adverse effect on any Purchaser’s investment
hereunder or (iii) could have a Material Adverse Effect.


 


(n)           
Conduct of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of
or in default under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding
series of preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of
formation or certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation
of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries,
and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in
all cases for possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. Without limiting
the generality of the foregoing, except as disclosed in the SEC Reports, the Company is not in violation of any of the rules,
regulations or requirements of the Trading Market and has no knowledge of any facts or circumstances that could reasonably lead
to delisting or suspension of the Common Stock by the Trading Market in the foreseeable future. Since July 19, 2013, (i) the Common
Stock has been listed or designated for quotation on the Trading Market, (ii) trading in the Common Stock has not been suspended
by the Commission or the Trading Market and (iii) the Company has received no communication, written or oral, from the Commission
or the Trading Market regarding the suspension or delisting of the Common Stock from the Trading Market other than as disclosed
in the SEC Reports. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such
certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither
the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.


 



    	 	15	 



     

    

 


(o)          
Foreign Corrupt Practices. Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company or any
Subsidiary, any director, officer, agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries
has, in the course of its actions for, or on behalf of, the Company or any of its Subsidiaries (i) used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or
is in violation of, in any material respect, any provision of the FCPA; or (iv) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic government official or employee.


 


(p)          
Sarbanes-Oxley Act. The Company and each Subsidiary is in compliance with all applicable requirements of the Sarbanes-Oxley
Act of 2002, and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date
hereof and as of the Closing Date.


 


(q)          
Transactions with Affiliates. Except as set forth in the SEC Reports, none of the officers or directors of the Company
or any of its Subsidiaries and, to the knowledge of the Company, none of the employees or affiliates of the Company or any of
its Subsidiaries is presently a party to any transaction with the Company or any of its Subsidiaries (other than for ordinary
course services as employees, officers or directors), including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments
to or from any such officer, director or employee, affiliate or, to the knowledge of the Company or any of its Subsidiaries, any
corporation, partnership, trust or other Person in which any such officer, director, employee or affiliate has a substantial interest
or is an employee, officer, director, affiliate, trustee or partner, in each case other than for (i) payment of salary or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits,
including stock option agreements under any stock option plan of the Company.


 



    	 	16	 



     

    

 





(r)           
Equity Capitalization.


 


(i)
As of the date hereof, the authorized capital stock of the Company consists of (A) 100,000,000 shares of Common Stock, of
which, 63,377,270 are issued and outstanding and, except as disclosed in the SEC Reports, no shares are reserved for issuance
pursuant to securities (other than the Preferred Stock) exercisable or exchangeable for, or convertible into, shares of Common
Stock and (B) 10,000,000 shares of preferred stock, of which 2,500,000 shares are designated as Series A Convertible Preferred
Stock, of which 2,409,555shares are issued and outstanding. All of such outstanding shares of Company capital stock are duly authorized
and have been, or upon issuance will be, validly issued and are fully paid and non-assessable.


 


(ii)
27,827,197shares of the Company’s issued and outstanding Common Stock on the date hereof are owned by Persons who are
“affiliates” (as defined in Rule 405 of the Securities Act and calculated based on the assumption that only officers,
directors and holders of at least 10% of the Company’s issued and outstanding Common Stock are “affiliates”
without conceding that any such Persons are “affiliates” for purposes of federal securities laws) of the Company or
any of its Subsidiaries. Except as disclosed in the SEC Reports, to the Company’s knowledge, no Person owns 10% or more
of the Company’s issued and outstanding shares of Common Stock without conceding that such identified Person is a 10% stockholder
for purposes of federal securities laws.


 


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


 



    	 	17	 



     

    

 


(iv)
Neither the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Reports
which are not so disclosed in the SEC Reports, other than those incurred in the ordinary course of the Company’s or its
Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or could not have a Material Adverse
Effect.


 


(v)
The Preferred Stock shall be classified in accordance with GAAP as equity on the Company’s balance sheet and for purposes
of the Company’s compliance with the shareholders equity continuing listing requirement of the Trading Market.


 


(s)           
Indebtedness and Other Contracts. Neither the Company nor any of its Subsidiaries (i) except as set forth in the SEC Reports,
have any outstanding Indebtedness, (ii) except as set forth in the SEC Reports, 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.
For purposes of this Agreement “Indebtedness” of any Person means, without duplication (A) all indebtedness
for borrowed money (other than trade accounts payable incurred in the ordinary course of business), (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 connection with 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 Lien upon or in any property or assets (including accounts and contract
rights) 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.


 



    	 	18	 



     

    

 


(t)            
Litigation. Except as set forth in the SEC Reports, there is no action, suit, proceeding, inquiry or investigation before
or by the Trading Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or,
to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any
of the Company’s or its Subsidiaries’ officers or directors, whether of a civil or criminal nature or otherwise, in
their capacities as such, which would have a Material Adverse Effect. No director, officer or employee of the Company or any of
its subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation.
Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company, any of its Subsidiaries or any current or former director or officer
of the Company or any of its Subsidiaries. The Commission has not issued any stop order or other order suspending the effectiveness
of any registration statement filed by the Company under the Securities Act or the Exchange Act.


 


(u)           
Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or
employs any member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees
are good. No executive officer (as defined in Rule 501(f) promulgated under the Securities Act) or other key employee of the Company
or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any
such Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary. The Company and
its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment
and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance
would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.


 


(v)          
Title. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and have good
and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries,
in each case, free and clear of all Liens except for Permitted Liens (as defined in the Certificate of Designation) and such other
Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to
be made of such property by the Company and any of its Subsidiaries. Any real property and facilities held under lease by the
Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company or any
of its Subsidiaries.


 



    	 	19	 



     

    

 


(w)            
Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights,
original works, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights
and all applications and registrations therefor (“Intellectual Property Rights”) necessary to conduct their
respective businesses as now conducted and as presently proposed to be conducted. None of the Company’s or its Subsidiaries’
Intellectual Property Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned,
within three years from the date of this Agreement. The Company has no knowledge of any infringement by the Company or any of
its Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or
to the knowledge of the Company or any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding
their Intellectual Property Rights. Neither the Company nor any of its Subsidiaries is aware of any facts or circumstances which
might give rise to any of the foregoing infringements or claims, actions or proceedings.


 


(x)             Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with any and all Environmental Laws (as defined below), (ii)
have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of
the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect.


  


(y)           
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.


 


(z)         
Tax Status. The Company and each of its Subsidiaries (i) has made or filed all foreign, federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment
of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes
in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its
Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign
investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.


 



    	 	20	 



     

    

 


(aa)        
Internal Accounting and Disclosure Controls. The Company and each of its Subsidiaries maintains internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with GAAP, including that (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing
assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. The Company maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that are designed to provide
reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the
SEC, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s
management, including its principal executive officer or officers and its principal financial officer or officers, as appropriate,
to allow timely decisions regarding required disclosure. Except as set forth in the SEC Reports, neither the Company nor any of
its Subsidiaries has received any notice or correspondence from any accountant or other Person relating to any potential material
weakness or significant deficiency in any part of the internal controls over financial reporting of the Company or any of its
Subsidiaries.


 


(bb)         
Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any
of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in
its Exchange Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.


 


(cc)          Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company”
or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company” as such terms are defined in the Investment Company Act of 1940, as amended.


 


(dd)         
Manipulation of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person
acting on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of
the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or
(iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company
or any of its Subsidiaries.


 



    	 	21	 



     

    

 


(ee)          
U.S. Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long
as any of the Securities are held by any of the Purchasers, shall become, a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company and each Subsidiary shall so certify
upon any Purchaser’s request.


 


(ff)        
Registration Eligibility. The Company is eligible to register for resale by the Purchasers Underlying Shares using Form
S-3 promulgated under the Securities Act.


 


(gg)        
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 issuance and sale of the Securities to be sold to each Purchaser 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.


 


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


 


(ii)           
Public Utility Holding Act. None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.


 


(jj)         
Federal Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility”
under the Federal Power Act, as amended.


 


(kk)        
   No Additional Agreements. Except as set forth in the SEC Reports, the Company does not have any agreement
or understanding with any Purchaser with respect to the transactions contemplated by the Transaction Documents other than as specified
in the Transaction Documents.


  


(ll)       
Management. Except as set forth in the SEC Reports, during the past five year period, no current or former officer or director
or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the Company or any of its Subsidiaries
has been the subject of:


 



    	 	22	 



     

    

 


(i)          a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such person was an executive
officer at or within two years before the time of the filing of such petition or such appointment;


 


(ii)         a
conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do
not relate to driving while intoxicated or driving under the influence);


 


(iii)        any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:


  


(A)        acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;


 


(B)         engaging
in any type of business practice; or


 


(C)         engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;


 


(iv)        any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise
limiting for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph,
or to be associated with persons engaged in any such activity;


 


(v)         a
finding by a court of competent jurisdiction in a civil action or by the Commission or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the Commission or any other authority has not been
subsequently reversed, suspended or vacated; or


 



    	 	23	 



     

    

 


(vi)        a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.


 


(mm)
       No Disqualification Events. With respect to the Securities to be offered and
sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company, 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 Securities 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 of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a "Disqualification
Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable
care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent
applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided
thereunder.


 


(nn)
       Other Covered Persons. Other than the Placement Agent, the Company is not aware
of any person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation
of purchasers in connection with the sale of any Securities.


 


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


 


(pp)       
Illegal or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the
Company’s knowledge, any of the officers, directors, employees, agents or other representatives of the Company or any of
its Subsidiaries or any other business entity or enterprise with which the Company or any Subsidiary is or has been affiliated
or associated, has, directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services,
whether or not in contravention of applicable law, (a) as a kickback or bribe to any Person or (b) to any political organization,
or the holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving
the direct or indirect use of funds of the Company or any of its Subsidiaries.


 


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


 



    	 	24	 



     

    

 


(rr)       
Registration Rights. Other than each of the Purchasers and except as set forth in the SEC Reports, no holder of securities
of the Company has rights to the registration of any securities of the Company because of the filing of the Registration Statement
or the issuance of the Securities hereunder that could expose the Company to material liability or any Purchaser to any liability
or that could impair the Company’s ability to consummate the issuance and sale of the Securities in the manner, and at the
times, contemplated hereby, which rights have not been waived by the holder thereof as of the date hereof.


 


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


  


(rr)         
Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers
as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the
Trading Market.


 


(ss)        
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company
or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.


 


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


 



    	 	25	 



     

    

 


(uu)
        Seniority. As of the Closing Date, except for the ExWorks Transaction and
that certain secured subordinated promissory note to be issued to LogicMark Investment Partners, LLC, no Indebtedness or other
claim against the Company is senior to the Preferred Stock in right of payment, whether with respect to interest or upon liquidation
or dissolution, or otherwise, other than indebtedness secured by purchase money security interests (which is senior only as to
underlying assets covered thereby) and capital lease obligations (which is senior only as to the property covered thereby).


 


(vv)
        Acknowledgment Regarding Purchaser’s Trading Activity. Anything in
this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.15 hereof), it is understood
and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser
agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities
based on securities issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or
other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions,
before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such
Purchaser is a party, directly or indirectly, may presently have a “short” position in the Common Stock and (iv) each
Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities
at various times during the period that the Securities are outstanding, including, without limitation, during the periods that
the value of the Underlying Shares deliverable with respect to Securities are being determined, and (z) such hedging activities
(if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that
the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute
a breach of any of the Transaction Documents.


 


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


 


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


 



    	 	26	 



     

    

 


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


 


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


 


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


 


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


 



    	 	27	 



     

    

 


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


 


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


 


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


 



    	 	28	 



     

    

 


(h)              
No Conflicts. The execution, delivery and performance by such Purchaser of this Agreement and the consummation by such
Purchaser of the transactions contemplated hereby and the other Transaction Documents will not (i) result in a violation of the
organizational documents of such Purchaser, (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 Purchaser 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 Purchaser, 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 Purchaser to perform its obligations
hereunder.


 


(i)                
Short Sale. Each Purchaser represents and warrants to the Company that at as of the date of this Agreement, no Restricted
Person (as defined herein) is engaged in or effected, in any manner whatsoever, directly or indirectly, any hedging transaction,
which establishes a Net Short Position (as defined herein) with respect to the Common Stock.


 


(j)                
Transfer or Sale. Each Purchaser understands that (i) the Securities may not be offered for sale, sold, assigned or transferred
unless (A) registered pursuant to the Securities Act or (B) an exemption exists permitting such Securities to be sold, assigned
or transferred without such registration; (ii) any sale of the Securities made in reliance on Rule 144 under the Securities Act
may be made only in accordance with the terms of Rule 144 under the Securities Act and further, if Rule 144 under the Securities
Act is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom the sale
is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other
exemption under the Securities Act or the rules and regulations of the Commission thereunder.


 


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


 


ARTICLE
IV.


OTHER
AGREEMENTS OF THE PARTIES


 


4.1Transfer
Restrictions.


 



    	 	29	 



     

    

 


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


 


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


 


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


 


The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged
or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company
and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further,
no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver
such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or
transfer of the Securities, including, if the Securities are subject to registration pursuant to the Registration Rights Agreement,
the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights
Agreement) thereunder.


 



    	 	30	 



     

    

 


(c)               
Certificates evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof):
(i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under
the Securities Act; (ii) following any sale of such Underlying Shares pursuant to Rule 144; (iii) if such Underlying Shares are
eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information
required under Rule 144 as to such Underlying Shares and without volume or manner-of-sale restrictions; or (iv) if such legend
is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued
by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after
the Effective Date if required by the Transfer Agent to effect the removal of the legend hereunder. If all or any shares of Preferred
Stock are converted or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover
the resale of the Underlying Shares, or if such Underlying Shares may be sold under Rule 144 and the Company is then in compliance
with the current public information required under Rule 144, or if the Underlying Shares may be sold under Rule 144 without the
requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Underlying
Shares and without volume or manner-of-sale restrictions or if such legend is not otherwise required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such
Underlying Shares shall be issued free of all legends. The Company agrees that following the Effective Date or at such time as
such legend is no longer required under this Section 4.1(c), it will, no later than three (3) Trading Days following the delivery
by a Purchaser to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with
a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered
to such Purchaser a certificate representing such shares that is free from all restrictive and other legends. The Company may
not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section 4. Certificates for Underlying Shares subject to legend removal hereunder shall be transmitted by the Transfer
Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System
as directed by such Purchaser.


 


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


 



    	 	31	 



     

    

 


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


 


4.2Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant
to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive
effect that such issuance may have on the ownership of the other stockholders of the Company.


 


4.3Furnishing
of Information; Public Information.


 


(a)
Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants
to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange
Act.


 



    	 	32	 



     

    

 


(b)
At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that
all of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise
without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public
information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes 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, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser,
in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell
the Securities, an amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of such Purchaser’s Securities
on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than
thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such
public information is no longer required  for the Purchasers to transfer the Underlying Shares pursuant to Rule 144. 
The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public
Information Failure Payments.”  Public Information Failure Payments shall be paid on the earlier of (i)
the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third
(3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. 
In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information
Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing
herein shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser
shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief.


 


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


 


4.5Conversion
and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants and the form of Notice of Conversion
included in the Certificate of Designation set forth the totality of the procedures required of the Purchasers in order to exercise
the Warrants or convert the Preferred Stock. Without limiting the preceding sentences, no ink-original Notice of Exercise or Notice
of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice
of Exercise or Notice of Conversion form be required in order to exercise the Warrants or convert the Preferred Stock. No additional
legal opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants or convert their
Preferred Stock. The Company shall honor exercises of the Warrants and conversions of the Preferred Stock and shall deliver Underlying
Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.


 



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4.6Securities
Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m. (New York City time) on the Trading Day immediately following
the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current
Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the
Exchange Act. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly
disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or
any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries
or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or
any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing
any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall
issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect
to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the
Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case
the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any
filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except:
(a) as required by federal securities law in connection with (i) any registration statement contemplated by the Registration Rights
Agreement and (ii) the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required
by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure
permitted under this clause (b).


 


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


 


4.8
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by
the Transaction Documents, which shall be disclosed pursuant to Section 4.6, the Company covenants and agrees that neither it,
nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes,
or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have
consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent,
the Company hereby covenants and agrees that such purchaser shall not have any duty of confidentiality to Company, any of its
Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, and of
its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of,
such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that
any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding
the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.


 



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4.9Use
of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the sale
of the Securities hereunder for (i) financing the Company’s purchase all of the issued
and outstanding membership interests of Logicmark LLC (“Logicmark”), pursuant to that certain Interest
Purchase Agreement, dated May 17, 2016, among Logicmark, the members of Logicmark and the Company, and (ii) working capital
purposes; and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment
of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any Common
Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.


 


4.10Indemnification
of Purchasers.


 


(a)          In
consideration of each Purchaser’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 Purchaser and all of its stockholders, partners, members, officers, directors, employees and
direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation
or warranty made by the Company or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant, agreement
or obligation of the Company or any Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit,
proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action
brought on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results
from (A) the execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed
or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (C) any disclosure
properly made by such Purchaser pursuant to Section 4.11, or (D) the status of such Purchaser either as an investor in the
Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including, without
limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief); provided,
however, that the indemnity contained in clause (iii) above shall not apply to any Indemnified Liabilities which directly and
primarily result from the fraud, gross negligence or willful misconduct of an Indemnitee. To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable law.


 



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(b)         Promptly
after receipt by an Indemnitee under this Section 4.10 of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is
to be made against the Company under this Section 4.10, deliver to the Company a written notice of the commencement thereof, and
the Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense
thereof with counsel mutually satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have
the right to retain its own counsel with the fees and expenses of such counsel to be paid by the Company if: (i) the Company has
agreed in writing to pay such fees and expenses; (ii) the Company shall have failed after a reasonable period of time to assume
the defense of such Indemnified Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified
Liability; or (iii) the named parties to any such Indemnified Liability (including any impleaded parties) include both such Indemnitee
and the Company, and such Indemnitee shall have been advised by counsel, in its reasonable opinion, that a material conflict of
interest on any material issue is likely to exist if the same counsel were to represent such Indemnitee and the Company (in which
case, if such Indemnitee notifies the Company in writing that it elects to employ separate counsel at the expense of the Company,
then the Company shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Company);
provided further, that in the case of clauses (i), (ii) and (iii) above the Company shall not be responsible for the reasonable
fees and expenses of more than one (1) separate legal counsel for such Indemnitee. The Indemnitee shall reasonably cooperate with
the Company in connection with any negotiation or defense of any such action or Indemnified Liability by the Company and shall
furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Indemnified Liability.
The Company shall keep the Indemnitee reasonably apprised at all times as to the status of the defense or any settlement negotiations
with respect thereto. The Company shall not be liable for any settlement of any action, claim or proceeding effected without its
prior written consent, provided, however, that the Company shall not unreasonably withhold, delay or condition its consent. The
Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement
or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee
of a release from all liability in respect to such Indemnified Liability or litigation, and such settlement shall not include
any admission as to fault on the part of the Indemnitee. Following indemnification as provided for hereunder, the Company shall
be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter
for which indemnification has been made. The failure to deliver written notice to the Company within a reasonable time of the
commencement of any such action shall not relieve the Company of any liability to the Indemnitee under this Section 4.10, except
to the extent that the Company is materially and adversely prejudiced in its ability to defend such action.


 






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(c)        The
indemnification required by this Section 4.10 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.


 


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


 


4.11Reservation
and Listing of Securities.


 


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


 


(b)              
If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than 130% of
(i) the Required Minimum on such date, minus (ii) the number of shares of Common Stock previously issued pursuant to the
Transaction Documents, then the Board of Directors shall use commercially reasonable efforts to amend the Certificate of Incorporation
to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time (minus
the number of shares of Common Stock previously issued pursuant to the Transaction Documents), as soon as possible and in any
event not later than the 90th day after such date, provided that the Company will not be required at any time to authorize
a number of shares of Common Stock greater than the maximum remaining number of shares of Common Stock that could possibly be
issued after such time pursuant to the Transaction Documents.


 


(c)               
The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such
Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required
Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for
listing or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing
or quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum
on such date on such Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock
for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such
electronic transfer. In addition, the Company shall hold a special meeting of shareholders (which may also be at the annual meeting
of shareholders) at the earliest practical date after the date on which the number of shares of Common Stock issuable pursuant
to this Agreement on a fully converted or exercised basis (ignoring for such purposes any conversion or exercise limitations therein)
exceeds 15% of the issued and outstanding shares of Common Stock on the Closing Date for the purpose of obtaining Shareholder
Approval, with the recommendation of the Company’s Board of Directors that such proposal be approved, and the Company shall
solicit proxies from its shareholders in connection therewith in the same manner as all other management proposals in such proxy
statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal. The Company shall use
its reasonable best efforts to obtain such Shareholder Approval. If the Company does not obtain Shareholder Approval at the first
meeting, the Company shall call a meeting every four months thereafter to seek Shareholder Approval until the earlier of the date
Shareholder Approval is obtained or the Preferred Stock is no longer outstanding.


 






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4.12Participation
in Future Financing.


 


(a)               
From the date hereof until the date that there is no Preferred Stock outstanding, upon any issuance by the Company or any of its
Subsidiaries of Common Stock or Common Stock Equivalents for cash consideration, or a combination of units thereof (a “Subsequent
Financing”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal
to 50% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided
for in the Subsequent Financing.


 


(b)              
At least five (5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a
written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask
such Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The
Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of
proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed
to be effected and shall include a term sheet or similar document relating thereto as an attachment.


 


(c)               
Any Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than
5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice
that such Purchaser is willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation,
and representing and warranting that such Purchaser has such funds ready, willing, and available for investment on the terms set
forth in the Subsequent Financing Notice. If the Company receives no such notice from a Purchaser as of such fifth (5th)
Trading Day, such Purchaser shall be deemed to have notified the Company that it does not elect to participate.


 






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(d)              
If by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received
the Pre-Notice, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their
designees to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may effect
the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice.


 


(e)               
If by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice,
the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount
of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of
the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities
purchased on the Closing Date by a Purchaser participating under this Section 4.12 and (y) the sum of the aggregate Subscription
Amounts of Securities purchased on the Closing Date by all Purchasers participating under this Section 4.12.


 


(f)               
The Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right
of participation set forth above in this Section 4.12, if the Subsequent Financing subject to the initial Subsequent Financing
Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading
Days after the date of the initial Subsequent Financing Notice.


 


(g)              
The Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction
documents related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required
to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment
to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior
written consent of such Purchaser.


 


(h)              
Notwithstanding anything to the contrary in this Section 4.12 and unless otherwise agreed to by such Purchaser, the Company shall
either confirm in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or
shall publicly disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such
that such Purchaser will not be in possession of any material, non-public information, by the tenth (10th) Business Day following
delivery of the Subsequent Financing Notice. If by such tenth (10th) Business Day, no public disclosure regarding a transaction
with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received
by such Purchaser, such transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession
of any material, non-public information with respect to the Company or any of its Subsidiaries. 


 






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(i)                
Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance.


 


4.13Subsequent
Equity Sales.


 


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


 


(b)              
Unless Shareholder Approval has been obtained and deemed effective, neither the Company nor any Subsidiary shall make any issuance
whatsoever of Common Stock or Common Stock Equivalents which would cause any adjustment of the Conversion Price to the extent
the holders of Preferred Stock would not be permitted, pursuant to Section 4(d) of the Certificate of Designation, to convert
their respective outstanding Preferred Stock and exercise their respective Warrants in full, ignoring for such purposes the other
conversion or exercise limitations therein. Any Purchaser shall be entitled to obtain injunctive relief against the Company to
preclude any such issuance, which remedy shall be in addition to any right to collect damages.


 


(c)               
Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance, except that no Variable Rate
Transaction shall be an Exempt Issuance.


 


4.14         
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered
or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the
same consideration is also offered to all of the parties to such Transaction Documents. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended
for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or
as a group with respect to the purchase, disposition or voting of Securities or otherwise.


 



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4.15         
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or
sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of this
Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to
the initial press release as described in Section 4.6.  Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant
to the initial press release as described in Section 4.6, such Purchaser will maintain the confidentiality of the existence and
terms of this transaction and the information included in the Transaction Documents and the Disclosure Schedules. Notwithstanding
the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.6, (ii) no Purchaser shall be restricted or prohibited from effecting
any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in
Section 4.6 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company
to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.6.  Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only
apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the
Securities covered by this Agreement.


 


4.16         
Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of any Purchaser.


 






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4.17         
No Net Short Sales. From the date of this Agreement until such time as any Purchaser no longer hold any Securities, neither
such Purchaser(s) holding any Securities nor any of its agents, representatives or affiliates nor any entity managed or controlled
by such Purchaser(s) (collectively, the “Restricted Persons” and each of the foregoing is referred to herein
as a “Restricted Person”) shall maintain, in the aggregate, a Net Short Position.  For purposes hereof,
a “Net Short Position” by a Restricted Person means a position whereby such Restricted Person has executed
one or more sales of Common Stock that is marked as a short sale (but not including any sale marked “short exempt”)
and that is executed at a time when such Restricted Person does not have an equivalent offsetting long position in the Common
Stock (or is deemed to have a long position hereunder or otherwise in accordance with Regulation SHO under the Exchange Act);
provided, further that no “short sale” shall be deemed to exist as a result of any failure by the Company (or its
agents) to deliver Underlying Shares, upon conversion of the Preferred Stock or Warrants, to any Restricted Person exercising
such Preferred Stock or Warrants, as applicable. For purposes of determining whether a Restricted Person has an equivalent offsetting
long position in the Common Stock, such Restricted Person shall be deemed to hold “long” all Common Stock that is
either (i) then owned by such Restricted Person, if any, or (ii) then issuable to such Restricted Person as Underlying Shares
pursuant to the terms of the Certificate of Designations with respect to the Preferred Stock or pursuant to the Warrants then
held by such Restricted Person, if any, (without regard to any limitations on conversion set forth in the Certificate of Designations
or the Warrants and giving effect to any conversion price adjustments that would take effect given only the passage of time).
Notwithstanding the foregoing, nothing contained herein shall (without implication that the contrary would otherwise be true)
prohibit any Restricted Person from selling “long” (as defined under Rule 200 promulgated under Regulation SHO under
the 1934 Act) the Securities or any other Common Stock then owned by such Restricted Person. For the avoidance of doubt, this
Section 4.17 is applicable to each Purchaser individually, and not collectively. For example, if Purchaser A still holds Securities
but Purchaser B does not, only Purchaser A remains subject to this Section 4.17.


 


ARTICLE
V.


MISCELLANEOUS


 


5.1Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing
has not been consummated on or before July 25, 2016; provided, however, that such termination will not affect the
right of any party to sue for any breach by any other party (or parties).


 


5.2Fees
and Expenses. At the Closing, the Company has agreed to reimburse the Placement Agent $50,000 for its legal fees and expenses
and has agreed to pay the Placement Agent a fee equal to seven percent (7%) of the gross proceeds received by the Company for
the Securities and a non-accountable expense allowance equal to one percent (1%) of the gross proceeds received for the Securities.
Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including,
without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any conversion
or exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of
any Securities to the Purchasers.


 


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


 






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


 


5.5Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and Purchasers holding at least 50.1% in interest of the Preferred Stock then outstanding
or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any
amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of
such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission
of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver
that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable
rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser, Any
amendment effected in accordance with accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities
and the Company.


 


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


 


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


 






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5.8No
Third-Party Beneficiaries. The Placement Agents shall be third party beneficiaries with respect to the representations and
warranties of the Company in Section 3.1 hereof and with respect to the representations and warranties of the Purchasers in Section
3.2 hereof. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns
and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in
Section 4.10 and this Section 5.8.


 


5.9Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action
or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party hereto shall
commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Section 4.10, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing
party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such Action or Proceeding.


 


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


 


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


 






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


 


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


 


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


 


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


 


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


 






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


 


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


 



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5.19Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages
or other amounts are due and payable shall have been canceled.


 


5.20Saturdays,
Sundays, Holidays, etc.If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.


 


5.21Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.


 


5.22WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 


 


(Signature
Pages Follow)


 



    	 	47	 



     

    

 


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


 


	NXT-id, inc. 	Address
    for Notice:
	 	 	 
	 	 	Nxt-ID,
        Inc.
	By:	 	285
North Drive, Suite D
	 	Name:
Gino M. Pereira

        Title:
        Chief Executive Officer

         
	

        

        Melbourne,
        FL 32934

        Fax :
        203-266-2106

        Email :
        gino@nxt-id.com



 


	With
a copy to (which shall not constitute notice):
	 
	 

        Robinson
        Brog Leinwand Greene Genovese & Gluck P.C.

        875
        Third Avenue, 9th Floor

        New
        York, NY 10022

        Fax:
        (212) 956-2164

        Email:
        ded@robinsonbrog.com

        Attn:
David E. Danovitch, Esq.
	 


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
PAGE FOR PURCHASER FOLLOWS]


 






    	 	48	 



     

    

 





[PURCHASER
SIGNATURE PAGES TO NXT-ID, INC. SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: ____________________________________________________


 


Signature
of Authorized Signatory of Purchaser: __________________________


 


Name
of Authorized Signatory: ____________________________________


 


Title
of Authorized Signatory: _____________________________________


 


Email
Address of Authorized Signatory: ___________________________________________


 


Facsimile
Number of Authorized Signatory: _________________________________________


 


Address
for Notice to Purchaser:


 


 


 


 


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


 


 


 


 


 


Subscription
Amount: $____________


 


Shares
of Preferred Stock: ____________


 


Warrant
Shares: ________________


 


EIN
Number: _______________________


 


 


 


[SIGNATURE
PAGES CONTINUE]


 



    	 	49	 



     

    

 


SCHEDULE
OF BUYERS


 


	Purchaser’s Name	 	Number of Shares of Preferred Stock	 	 	Number of Warrant Shares	 	 	Purchase Price	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 



 


 


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