U-Vend, Inc. 8-K



Exhibit 10.42


SECURITIES PURCHASE
AGREEMENT


This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of ______________________, 2016, is by and among U-Vend,
Inc., a Delaware corporation with offices located at 7th Street Unit 425 Santa Monica CA 90401 (the “Company”),
and each investor (individually, a “Buyer” and collectively, the “Buyers”).


RECITALS


A.


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


B.


The Company has authorized
the issuance of convertible promissory notes, in the aggregate original principal amount of $2,500,000, in the form attached hereto
as Exhibit A (the “Notes”), which Notes shall be convertible into shares of the Company’s common
stock, $0.001 par value per share (the “Common Stock”) (as converted, collectively, the “Conversion
Shares”), in accordance with the terms of the Notes.


C. 


Each Buyer
wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) a Note in the aggregate
original principal amount set forth opposite such Buyer’s name, (ii) a warrant to initially acquire up to a number of additional
shares of Common Stock set forth, in the form attached hereto as Exhibit B (the “Warrants”) (as exercised,
collectively, the “Warrant Shares.”


D.


The Notes may be entitled
to interest and certain other amounts, which, at the option of the Company and subject to certain conditions, may be paid in shares
of Common Stock (the “Interest Shares”) or in cash.


E.


The Notes, the Conversion
Shares, the Interest Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Registerable
Securities.”


AGREEMENT


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


1.


PURCHASE AND
SALE OF NOTES AND WARRANTS.


(a)


Notes and Warrants.
Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell
to each Buyer, and each Buyer severally, but not jointly, shall purchase from the Company on the Closing Date (as defined below),
a Note in the original principal amount as is set forth opposite such Buyer’s name along with Warrants to initially acquire
up to that aggregate number of Warrant Shares as is set forth in the documents.




    	  



    	 



    

 


(b)


Closing. The
closing (the “Closing”) of the purchase of the Notes and the Warrants by the Buyers shall occur at a place and
time mutually agreeable to both the Buyer and the Company, but in no case shall the date and time of the Closing (the “Closing
Date”) be any later than 10:00 a.m., New York time, on the first (1st) Business Day on which the conditions
to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such later date as is mutually agreed to by the
Company and each Buyer). As used herein “Business Day” means any day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or required by law to remain closed.


(c)


Purchase Price.
The aggregate purchase price for the Notes and the Warrants to be purchased by each Buyer (the “Purchase Price”)
shall be the amounts set forth in the transaction documents.


(d)


Form of Payment.
On the Closing Date, (i) the Buyer shall pay its respective Purchase Price to the Company for the Notes and the Warrants to be
issued and sold to such Buyer at the Closing, by wire transfer of immediately available funds in accordance with the Company’s
written wire instructions and (ii) the Company shall deliver to each Buyer (A) a Note in the aggregate original principal
amount as is set forth in the transaction documents.(B) a Warrant pursuant to which such Buyer shall have the right to initially
acquire up to such number of Warrant Shares as is set forth in the transaction documents, in all cases, duly executed on behalf
of the Company and registered in the name of such Buyer or its designee. For the avoidance of doubt, as consideration for all or
any portion of the Purchase Price, the Company may accept the Buyer’s exchange and cancellation any indebtedness owed to
him, her or it by the Company, together with any accrued by unpaid interest thereon, that was outstanding as of June 30, 2016.


2.


BUYER’S
REPRESENTATIONS AND WARRANTIES.


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


(a)


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


(b)


No Public Sale or
Distribution. Such Buyer (i) is acquiring its Note and Warrants, (ii) upon conversion of its Note will acquire the Conversion
Shares issuable upon conversion thereof, and (iii) upon exercise of its Warrants will acquire the Warrant Shares issuable
upon exercise thereof, in each case, for its own account and not with a view towards, or for resale in connection with, the public
sale or distribution thereof in violation of applicable securities laws, except pursuant to sales registered or exempted under
the 1933 Act; provided, however, by making the representations herein, such Buyer does not agree, or make any representation or
warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities
at any time in accordance with or pursuant to a registration statement or an exemption from registration under the 1933 Act. Such
Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the
Securities in violation of applicable securities laws.




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(c)


Accredited Investor
Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D. Such Buyer
has completed an Investor Questionnaire in the form attached hereto as Exhibit E hereto (the “Questionnaire”).


(d)


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


(e)


Information.
Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities, which have been requested by such Buyer. Such Buyer
and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Such Buyer understands that its investment
in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its acquisition of the Securities.


(f)


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


(g)


Transfer or Resale.
Such Buyer understands that except as provided in Section 4(h) hereof: (i) the Securities have not been and are not being registered
under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company (if requested by the Company) an opinion of counsel to
such Buyer, in a form reasonably acceptable to the Company, to the effect that such Securities to be sold, assigned or transferred
may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Buyer provides the Company with
reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under
the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made
in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable,
any resale of the Securities under circumstances in which the seller (or the Person (as defined below) through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption
under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other
Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder.




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(h)


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


(i)


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


(j)


Residency. Such
Buyer is a resident of the jurisdiction specified below its address.


3.


REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.


The Company represents
and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:


(a)


Organization and
Qualification. Each of the Company and each of its Subsidiaries is an entity duly organized and validly existing and in good
standing under the laws of the jurisdiction in which it is formed, and has the requisite power and authority to own its properties
and to carry on its 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 and the Subsidiaries 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
or any of its Subsidiaries to perform any of their respective obligations under any of the Transaction Documents. Other than the
Persons (as defined below) set forth in the SEC Documents, the Company has no Subsidiaries. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (I) owns a majority of the outstanding capital stock or holds a
majority of 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.”




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(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 Notes and the reservation for issuance and
issuance of the Conversion Shares issuable upon conversion of the Notes and the reservation for issuance and issuance of any Interest
Shares issuable pursuant to the terms of the Notes and the issuance of the Warrants and the reservation for issuance and issuance
of the Warrant Shares issuable upon exercise of the Warrants) have been duly authorized by the Company’s board of directors
or other governing body and (other than the filing of a Form D with the SEC and any other filings as may be required by any state
securities agencies) no further filing, consent or authorization is required by the Company, its board of directors or its stockholders
or other governing body. This Agreement and the other Transaction Documents to which it is a party have been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligations of the Company, enforceable against the Company
in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by
federal or state securities law. “Transaction Documents” means, collectively, this Agreement, the Notes, the
Warrants, and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection
with the transactions contemplated hereby and thereby, as may be amended from time to time.


(c)


Issuance of Securities.
The issuance of the Notes and the Warrants are duly authorized and upon issuance in accordance with the terms of the Transaction
Documents shall be validly issued and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances
with respect to the issuance thereof. As of the Closing, the Company shall have reserved from its duly authorized capital stock
not less than the sum of (i) 110% of the maximum number of Conversion Shares issuable upon conversion of the Notes (assuming for
purposes hereof that the Notes are convertible at the initial Conversion Price (as defined in the Notes) and without taking into
account any limitations on the conversion of the Notes set forth in the Notes), (ii) 110% of the maximum number of Interest Shares
issuable pursuant to the terms of the Notes from the Closing Date through the second anniversary of the Closing Date (determined
as if issued on the Trading Day (as defined in the Notes) immediately preceding the Closing Date without taking into account any
limitations on the issuance of securities set forth in the Notes) and (iii) the maximum number of Warrant Shares issuable upon
exercise of the Warrants (without taking into account any limitations on the exercise of the Warrants set forth therein). Upon
issuance or conversion in accordance with the Notes or exercise in accordance with the Warrants (as the case may be), the Conversion
Shares, the Interest Shares and the Warrant Shares, respectively, when issued, will be validly issued, fully paid and non-assessable
and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof,
with the holders being entitled to all rights accorded to a holder of Common Stock. Subject to the accuracy of the representations
and warranties of the Buyers in this Agreement, the offer and issuance by the Company of the Securities is exempt from registration
under the 1933 Act.




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(d)


No Conflicts.
The execution, delivery and performance of the Transaction Documents by the Company and its Subsidiaries and the consummation by
the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation, the issuance
of the Notes, the Warrants, the Conversion Shares, the Interest Shares and Warrant Shares and the reservation for issuance of the
Conversion Shares, the Interest Shares and the Warrant Shares) will not (i) result in a violation of the Certificate of Incorporation
(as defined below) (including, without limitation, any certificate of designation contained therein) or other organizational documents
of the Company or any of its Subsidiaries, any capital stock of the Company or any of its Subsidiaries or Bylaws (as defined below)
of the Company or any of its Subsidiaries, (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) result in a violation
of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations and
the rules and regulations of the OTC Markets (the “Principal Market”) and including all applicable federal laws,
rules and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or
any of its Subsidiaries is bound or affected 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.


(e)


Consents. Neither
the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or registration
with (other than the filing of a Form D with the SEC and any other filings as may be required by any state securities agencies),
any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver
or perform any of its respective obligations under or contemplated by the Transaction Documents, in each case, in accordance with
the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary
is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to the Closing Date,
and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company or
any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Transaction
Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances
which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.




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(f)


Acknowledgment Regarding
Buyer’s Purchase of Securities. The Company acknowledges and agrees that to the Company’s knowledge, each Buyer
is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii)
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 Securities Exchange Act
of 1934, as amended (the “1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial
advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in
connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s
purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter into the Transaction
Documents to which it is a party has been based solely on the independent evaluation by the Company and its representatives.


(g)


No General Solicitation;
Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its
or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its investment advisor)
relating to or arising out of the transactions contemplated hereby. 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
require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings
or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company under any applicable
stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation
system on which any of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries,
their affiliates nor any Person acting on their behalf will take any action or steps that would require registration of the issuance
of any of the Securities under the 1933 Act or cause the offering of any of the Securities to be integrated with any other offerings
of securities of the Company, which would require registration under the 1933 Act of the offering contemplated hereby.


(i)


Dilutive Effect.
The Company understands and acknowledges that the number of Conversion Shares, Interest Shares and Warrant Shares will increase
in certain circumstances. The Company further acknowledges that its obligation to issue the Conversion Shares upon conversion of
the Notes in accordance with this Agreement and the Notes, the Interest Shares in accordance with this Agreement and the Notes
and the Warrant Shares upon exercise of the Warrants in accordance with this Agreement, the Notes and 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.




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(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 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 Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s
issuance of the Securities and any Buyer’s ownership of the Securities. 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.


(k)


SEC Documents; Financial
Statements. During the two (2) years prior to the date hereof, the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the
foregoing filed prior to the date hereof and all exhibits included therein and financial statements, notes and schedules thereto
and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). The Company
has delivered or has made available to the Buyers or their respective representatives true, correct and complete copies of each
of the SEC Documents not available on the EDGAR system. As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the
SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements
of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements
have been prepared in accordance with generally accepted accounting principles, 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 Buyers which
is not included in the SEC Documents (including, without limitation, information referred to in Section 2(e) of this Agreement)
contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements
therein not misleading, in the light of the circumstance under which they are or were made.




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(l)


Absence of Certain
Changes. Since the date of the Company’s most recent audited financial statements contained in a 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, except
as set forth in or contemplated by such Form 10-K. 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 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, on a consolidated basis, after giving effect to the transactions contemplated hereby
to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section 3(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 (as defined below), (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. 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) (other than the
Closing of the Offering contemplated hereby), that (i) would be required to be disclosed by the Company as of the date hereof or
the Closing Date under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance
and sale by the Company of its Common Stock and which has not been publicly announced, (ii) could reasonably be expected to have
a material adverse effect on any Buyer’s investment hereunder or (iii) could reasonably be expected to have a Material Adverse
Effect.




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(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,
the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of
any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the Principal Market in
the foreseeable future. Since January 1, 2012, (i) the Common Stock has been listed or designated for quotation on the Principal
Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the Company has received
no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common Stock
from the Principal Market. 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.


(o)


Foreign Corrupt
Practices. Neither the Company nor any of its Subsidiaries nor 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 any provision of the U.S. Foreign Corrupt Practices Act
of 1977, as amended; 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 SEC thereunder.


(q)


Transactions With
Affiliates. Except as set forth in the SEC Documents, none of the officers, directors, 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 and immaterial transactions), 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, employee or 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, or employee
has a substantial interest or is an employee, officer, director, trustee, affiliate or partner.




    	10 



    	 



    

 


(r)


Equity Capitalization.
As of April 21, 2016, the authorized capital stock of the Company consists of (i) 600,000,000 shares of Common Stock of which,
approximately 18,198,816 are issued and outstanding and 46,000,000 shares are reserved for issuance pursuant to securities (other
than the Notes and the Warrants) exercisable or exchangeable for, or convertible into, shares of Common Stock and (ii) 10,000,000
shares of preferred stock, $0.001 par value, of which none are issued and outstanding. No shares of Common Stock are held in treasury.
All of such outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and
non-assessable. Approximately 9,500,000 shares 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 1933 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. Other than as disclosed in the Company’s public filings, no Person currently owns 10% or more of
the Company’s issued and outstanding shares of Common Stock, but may be deemed to be an owner of 10% or more based on the
assumption that all Convertible Securities (as defined below), whether or not presently exercisable or convertible, have been fully
exercised or converted (as the case may be) taking account of any limitations on exercise or conversion (including “blockers”)
contained therein without conceding that such identified Person is a 10% stockholder for purposes of federal securities laws).
(i) None of the Company’s or any Subsidiary’s capital stock is subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company or any Subsidiary; (ii) except as set forth in the SEC
Documents or on Schedule 3(r)(ii), 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; (iii)
except as set forth in the SEC Documents or on Schedule 3(r)(iii), there are no outstanding debt securities, notes, credit agreements,
credit facilities or other agreements, documents or instruments evidencing Indebtedness of the Company or any of its Subsidiaries
or by which the Company or any of its Subsidiaries is or may become bound; (iv) except as set forth on Schedule 3(r)(iv), there
are no financing statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries;
(v) except as set forth on Schedule 3(r)(v), there are no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act ; (vi) except as set forth on Schedule 3(r)(vi),
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; (vii) except as set forth on Schedule 3(r)(vii),
there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of
the Securities; (viii) except as set forth on Schedule 3(r)(viii), neither the Company nor any Subsidiary has any stock appreciation
rights or “phantom stock” plans or agreements or any similar plan or agreement; and (ix) neither the Company nor any
of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents which are not so disclosed
in the SEC Documents, 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. The Company has furnished
or has made available to the Buyers true, correct and complete copies of the Company’s Certificate of Incorporation, as amended
and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s bylaws, as
amended and as in effect on the date hereof (the “Bylaws”), and the terms of all securities convertible into,
or exercisable or exchangeable for, shares of Common Stock and the material rights of the holders thereof in respect thereto.




    	11 



    	 



    

 


(s)


Indebtedness and
Other Contracts. Except as noted in the Company’s public filings on Forms 8k, 10q or 10k, neither the Company nor any
of its Subsidiaries, (i) has any outstanding Indebtedness (as defined below), (ii) is a party to any contract, agreement or instrument,
the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably
be expected to result in a Material Adverse Effect, (iii) is in violation of any term of, or in default under, any contract, agreement
or instrument relating to any Indebtedness, except where such violations and defaults would not result, individually or in the
aggregate, in a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness,
the performance of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect.
For purposes of this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness
for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including,
without limitation, “capital leases” in accordance with generally accepted accounting principles) (other than trade
payables entered into in the ordinary course of business), (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 generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F)
above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, claim, lien, tax, right of first refusal, pledge, charge, security interest or other encumbrance 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; (y) “Contingent Obligation”
means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness,
lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole
or in part) against loss with respect thereto; and (z) “Person” means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any
department or agency thereof.




    	12 



    	 



    

 


(t)


Absence of Litigation.
There is no action, suit, proceeding, inquiry or investigation before or by the Principal Market, any court, public board, government
agency, 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 which
is outside of the ordinary course of business or individually or in the aggregate material to the Company or any of its Subsidiaries.
Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the SEC involving the Company, any of its Subsidiaries or any current or former director or officer of the
Company or any of its Subsidiaries. The SEC has not issued any stop order or other order suspending the effectiveness of any registration
statement filed by the Company under the 1933 Act or the 1934 Act.


(u)


Insurance. The
Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or applied
for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.


(v)


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 1933 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. No executive officer or other key employee of
the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement
or any restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may
be) does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The
Company and its Subsidiaries are in compliance with all 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.


(w)


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, encumbrances and defects except such as do not materially affect the value of such property and do not 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.




    	13 



    	 



    

 


(x)


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, 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. Except as set forth on Schedule 3(v), 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. The Company is not aware of any facts or circumstances which might give rise to any of the foregoing infringements
or claims, actions or proceedings. The Company and each of its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their Intellectual Property Rights.


(y)


Environmental Laws.
The Company and its Subsidiaries (i) are in compliance with 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. The term “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 chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.


(z)


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.




    	14 



    	 



    

 


(aa)


Tax Status.
Since January 1, 2012, the Company and each of its Subsidiaries (i) has timely 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 timely
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.


(bb)


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 1934 Act) that is effective to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles, 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 generally accepted
accounting principles 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 1934 Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that
it files or submits under the 1934 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 1934 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.


(cc)


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 1934 Act filings and
is not so disclosed or that otherwise could be reasonably expected to have a Material Adverse Effect.


(dd)


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.




    	15 



    	 



    

 


(ee)


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 (other than the Placement
Agent), 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.


(ff)


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 Buyers, 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 Buyer’s request.


(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, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have been, fully paid
or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.


(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)


Illegal or Unauthorized
Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of the Company's knowledge
(after reasonable inquiry of its officers and directors), 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.




    	16 



    	 



    

 


(jj)


Money Laundering.
The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of 2001 and all
other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the laws, regulations
and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited,
to (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.


(kk)


Management.
Except as set forth in Schedule 3(mm) hereto or as disclosed in the SEC Documents, during the past five (5) year period,
no current 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:


(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:


(1)


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;


(2)


Engaging in
any type of business practice; or


(3)


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 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 SEC or other authority to have violated any securities law, regulation
or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently reversed,
suspended or vacated; or


(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.




    	17 



    	 



    

 


(ll)


No Additional Agreements.
The Company does not have any agreement or understanding with any Buyer with respect to the transactions contemplated by the Transaction
Documents other than as specified in the Transaction Documents.


(mm)


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.


(nn)


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.


(oo)


Ranking of Notes.
Except as specifically noted in the Company’s public filings with the SEC, no Indebtedness of the Company, at the Closing,
will be senior to, or pari passu with, the Notes in right of payment, whether with respect to payment or redemptions, interest,
damages, upon liquidation or dissolution or otherwise.


(pp)


Disclosure.
Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or counsel
with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning
the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the other
Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf
of the Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which
they were made, not misleading. Each press release issued by the Company or any of its Subsidiaries during the twelve (12) months
preceding the date of this Agreement did not at the time of release contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading. No event or circumstance has occurred or information exists with respect to the Company
or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results thereof)
or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before
the date hereof or announcement by the Company but which has not been so publicly disclosed. The Company acknowledges and agrees
that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in Section 2.


4.


COVENANTS.


(a)


Best Efforts.
Each Buyer shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 6 of
this Agreement. The Company shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided
in Section 7 of this Agreement.




    	18 



    	 



    

 


(b)


Form D and Blue
Sky. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy
thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities being sold at the Closing
for sale to the Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of
the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action
so taken to the Buyers on or prior to the Closing Date. Without limiting any other obligation of the Company under this Agreement,
the Company shall timely make all filings and reports relating to the offer and sale of the Securities required under all applicable
securities laws (including, without limitation, all applicable federal securities laws and all applicable “Blue Sky”
laws), and the Company shall comply with all applicable federal, foreign, state and local laws, statutes, rules, regulations and
the like relating to the offering and sale of the Securities to the Buyers.


(c)


Reporting Status.
Until the date on which the Buyers shall have sold all of the Registerable Securities (the “Reporting Period”),
the Company shall use reasonable best efforts to timely file all reports required to be filed with the SEC pursuant to the 1934
Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act
or the rules and regulations thereunder would no longer require or otherwise permit such termination. From the time Form S-3 is
available to the Company for the registration of the Registerable Securities, the Company shall use reasonable best efforts to
take all actions necessary to maintain its eligibility to register the Registerable Securities for resale by the Buyers on Form
S-3.


(d)


Use of Proceeds.
The Company will use the proceeds from the sale of the Securities for general corporate purposes and working capital and not for
(i) the repayment of any outstanding Indebtedness of the Company or any of its Subsidiaries, (ii) redemption or repurchase
of any securities of the Company or any of its Subsidiaries or (iii) the settlement of any outstanding litigation.


(e)


Financial Information.
The Company agrees to send the following to each Investor (means a Buyer or any transferee or assignee of any Registerable Securities,
Notes or Warrants, as applicable, to whom a Buyer assigns its rights under this Agreement during the Reporting Period (i) unless
the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, within one (1) Business
Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, any Current
Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act,
(ii) unless the following are either filed with the SEC through EDGAR or are otherwise widely disseminated via a recognized new
release service (such as PR Newswire), on the same day as the release thereof, facsimile copies of all press releases issued by
the Company or any of its Subsidiaries and (iii) unless the following are filed with the SEC through EDGAR, copies of any notices
and other information made available or given to the stockholders of the Company generally, contemporaneously with the making available
or giving thereof to the stockholders.




    	19 



    	 



    

 


(f)


Listing. The
Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Registerable Securities
upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed or designated
for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation for
quotation (as the case may be) of all Registerable Securities from time to time issuable under the terms of the Transaction Documents
on such national securities exchange or automated quotation system. The Company shall use reasonable best efforts to maintain the
Common Stock’s listing or authorization for quotation (as the case may be) on the Principal Market, The New York Stock Exchange,
the NYSE Amex LLC, the Nasdaq Capital Market, the Nasdaq Global Select Market or the Nasdaq Global Market (each, an “Eligible
Market”). Neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected to
result in the delisting or suspension of the Common Stock on an Eligible Market. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(f).


(g)


Fees. The Company
shall be responsible for the payment of any placement agent’s fees, financial advisory fees, transfer agent fees, DTC (as
defined below) fees or broker’s commissions (other than for Persons engaged by any Buyer) relating to or arising out of the
transactions contemplated hereby (including, without limitation, any fees payable to the Placement Agent, who is the Company’s
sole placement agent in connection with the transactions contemplated by this Agreement). The Company shall pay, and hold each
Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’ fees and out-of-pocket
expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction Documents,
each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers.


(h)


Piggyback Registrations.
Without limiting any obligation of the Company hereunder or under the Securities Purchase Agreement, if Company shall determine
to prepare and file with the SEC a registration statement relating to an offering for its own account or the account of others
under the 1933 Act of any of its equity securities (other than on Form S-4 or Form S-8 (each as promulgated under the 1933 Act)
or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or
business or equity securities issuable in connection with the Company’s stock option or other employee benefit plans), then
the Company shall deliver to each Investor a written notice of such determination and, if within fifteen (15) days after the date
of the delivery of such notice, any such Investor shall so request in writing, the Company shall include in such registration statement,
on a best efforts basis, all or any part of such Registerable Securities such Investor requests to be registered; provided, however,
the Company shall not be required to register any Registerable Securities pursuant to this Section 2(g) that are eligible for resale
pursuant to Rule 144 without restriction (including, without limitation, volume restrictions) and without the need for current
public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or that are the subject of a then-effective Registration
Statement.




    	20 



    	 



    

 


(i)


Reservation of Shares.
So long as any Notes or Warrants remain outstanding, the Company shall take all action necessary to at all times have authorized,
and reserved for the purpose of issuance, no less than (i) 110% of the maximum number of shares of Common Stock issuable upon conversion
of all the Notes then outstanding (assuming for purposes hereof, that the Notes are convertible at the Conversion Price (as defined
in the Notes) and without regard to any limitations on the conversion of the Notes set forth therein), and (ii) 110% of the maximum
number of Interest Shares issuable pursuant to the terms of the Notes then outstanding from the Closing Date through the thirty-six
month anniversary of the Closing Date (determined as if issued on the Trading Day immediately preceding the Closing Date without
taking into account any limitations on the issuance of securities set forth in the Notes) and (iii) the maximum number of Warrant
Shares issuable upon exercise of all the Warrants then outstanding (without regard to any limitations on the exercise of the Warrants
set forth therein).


(j)


Conduct of Business.
While any of the Notes or Warrants remain outstanding, the business of the Company and its Subsidiaries shall not be conducted
in violation of any law, ordinance or regulation of any governmental entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect.


(k)


Variable Securities.
Until all of the Registerable Securities have been sold by the Buyers, the Company and each Subsidiary shall be prohibited from
effecting or entering into an agreement to effect any Subsequent Placement involving a Variable Rate Transaction. “Variable
Rate Transaction” means a transaction in which the Company or any Subsidiary (i) issues or sells any Convertible Securities
either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of
or quotations for the shares of Common Stock at any time after the initial issuance of such Convertible 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
Convertible Securities or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Stock, other than pursuant to customary anti-dilution provisions or (ii) enters into
any agreement (including, without limitation, an equity line of credit) whereby the Company or any Subsidiary may sell securities
at a future determined price (other than customary “preemptive” or “participation” rights). Each Buyer
shall be entitled to obtain injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which remedy
shall be in addition to any right to collect damages.


(l)


Participation Right.
From the date hereof through the first anniversary of the Closing Date, neither the Company nor any of its Subsidiaries shall,
directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this Section 4(l). The
Company acknowledges and agrees that the right set forth in this Section 4(l) is a right granted by the Company, separately, to
each Buyer.




    	21 



    	 



    

 


(i)


At least
three (3) Trading Days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer a written
notice of its proposal or intention to effect a Subsequent Placement (each such notice, a “Pre-Notice”), which
Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (i)
a statement that the Company desires to provide such Buyer with material, non-public information, or, if permissible hereunder,
a statement that the Company proposes or intends to effect a Subsequent Placement, (ii) a statement that the statement in clause
(i) above does not constitute material, non-public information and (iii) a statement informing such Buyer that it is entitled to
receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written
request of a Buyer within three (3) Trading Days after the Company’s delivery to such Buyer of such Pre-Notice, and only
upon a written request by such Buyer, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver
to such Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale
or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a
Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price and other
terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold
or exchanged, (y) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold
or exchanged and (z) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer such Buyer’s
pro rata portion of 50% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the
right to subscribe for under this Section 4(o) shall be (a) based on such Buyer’s pro rata portion of the aggregate original
principal amount of the Notes purchased hereunder by all Buyers (the “Basic Amount”), and (b) with respect to
each Buyer that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic
Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than
their Basic Amounts (the “Undersubscription Amount”).


(ii)


To accept
an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the third (3rd) Business
Day after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion of
such Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic
Amount, the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “Notice of Acceptance”).
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then such Buyer who has
set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed
for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), such Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total Basic Amounts
of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably
necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer in any
material respect prior to the expiration of the Offer Period, the Company may deliver to each Buyer a new Offer Notice and the
Offer Period shall expire on the third (3rd) Business Day after such Buyer’s receipt of such new Offer Notice.


 




    	22 



    	 



    

 


(iii)


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


(iv)


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


(v)


Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from
the Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance.
The purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the
Company and such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and
substance to such Buyer and its counsel.


(vi)


Any Offered
Securities not acquired by a Buyer or other Persons in accordance with this Section 4(l) may not be issued, sold or exchanged until
they are again offered to such Buyer under the procedures specified in this Agreement.


 




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(vii)


The Company
and each Buyer agree that if any Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with respect
to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”)
shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities
of the Company 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, any agreement previously entered into with the Company or any instrument received from the Company.


(viii)


Notwithstanding
anything to the contrary in this Section 4(o) and unless otherwise agreed to by such Buyer, the Company shall either confirm in
writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession
of any material, non-public information, by the fifth (5th) Business Day following delivery of the Offer Notice. If
by such fifth (5th) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities
has been made, and no notice regarding the abandonment of such transaction has been received by such Buyer, such transaction shall
be deemed to have been abandoned and such Buyer shall not be deemed to be in possession of any material, non-public information
with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the
Offered Securities, the Company shall provide such Buyer with another Offer Notice and such Buyer will again have the right of
participation set forth in this Section 4(o). The Company shall not be permitted to deliver more than one such Offer Notice to
such Buyer in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 4(l)(ii).


(ix)


The restrictions
contained in this Section 4(l) shall not apply in connection with the issuance of any Excluded Securities. The Company shall not
circumvent the provisions of this Section 4(o) by providing terms or conditions to one Buyer that are not provided to all.


(m)


Dilutive Issuances.
For so long as any Notes or Warrants remain outstanding, the Company shall not, in any manner, enter into or affect any Dilutive
Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is to cause the Company to be required to issue upon
conversion of any Notes or exercise of any Warrant any shares of Common Stock in excess of that number of shares of Common Stock
which the Company may issue upon conversion of the Notes and exercise of the Warrants without breaching the Company's obligations
under the rules or regulations of the Principal Market.


(n)


Passive Foreign
Investment Company. The Company shall conduct its business in such a manner as will ensure that the Company will not
be deemed to constitute a passive foreign investment company within the meaning of Section 1297 of the U.S. Internal Revenue Code
of 1986, as amended.


(o)


Restriction on Redemption
and Cash Dividends. Except as set forth on Schedule 4(r), so long as any Notes are outstanding, the Company shall not,
directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without the
prior express written consent of the Required Holders.




    	24 



    	 



    

 


(p)


Corporate Existence.
So long as any Buyer beneficially owns any Notes or Warrants, the Company shall not be party to any Fundamental Transaction (as
defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set
forth in the Notes and the Warrants.


(q)


[INTENTIONALLY OMITTED.]


(r)


Conversion 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 Notes set forth the totality of the procedures required of the Buyers in order to exercise the Warrants or convert the Notes.
Except as provided in Section 5(d), no additional legal opinion, other information or instructions shall be required of the Buyers
to exercise their Warrants or convert their Notes. The Company shall honor exercises of the Warrants and conversions of the Notes
and shall deliver the Conversion Shares, Interest Shares and Warrant Shares in accordance with the terms, conditions and time periods
set forth in the Notes and Warrants.


(s)


Closing Documents.
On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered, to
each Buyer executed copies of the Transaction Documents, Securities and other document required to be delivered to any party pursuant
to Section 7 hereof.


5.


REGISTER;
TRANSFER AGENT INSTRUCTIONS; LEGEND.


(a)


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




    	25 



    	 



    

 


(b)


Transfer Agent Instructions.
The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer agent in a form acceptable to
each of the Buyers (the “Irrevocable Transfer Agent Instructions”) to issue certificates or credit shares to
the applicable balance accounts at The Depository Trust Company (“DTC”), registered in the name of each Buyer
or its respective nominee(s), for the Conversion Shares, the Interest Shares and the Warrant Shares in such amounts as specified
from time to time by each Buyer to the Company upon conversion of the Notes or the exercise of the Warrants (as the case may be).
The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this
Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company to its transfer
agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of
the Company, as applicable, to the extent provided in this Agreement and the other Transaction Documents. If a Buyer effects a
sale, assignment or transfer of the Securities in accordance with Section 2(g), the Company shall permit the transfer and shall
promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC
in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment. In the event that
such sale, assignment or transfer involves Conversion Shares, Interest Shares or Warrant Shares sold, assigned or transferred pursuant
to an effective registration statement or in compliance with Rule 144, the transfer agent shall issue such shares to such Buyer,
assignee or transferee (as the case may be) without any restrictive legend in accordance with Section 5(d) below. The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition
to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other security being required. The Company shall cause its
counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Company’s transfer agent
on each Effective Date. Any fees (with respect to the transfer agent, counsel to the Company or otherwise) associated with the
issuance of such opinion or the removal of any legends on any of the Securities shall be borne by the Company.


(c)


Legends. Each
Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares, the Interest Shares
and the Warrant Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable state securities
laws, and except as set forth below, the Securities shall bear any legend as required by the “blue sky” laws of any
state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of
such stock certificates):


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




    	26 



    	 



    

 


(d)


Removal of Legends.
Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c) above or any other legend
(i) while a registration statement (including a Registration Statement) covering the resale of such Securities is effective under
the 1933 Act, (ii) following any sale of such Securities pursuant to Rule 144 (assuming neither the transferor nor the transferee
is an affiliate of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred under Rule 144 (provided
that a Buyer provides the Company with reasonable assurances that such Securities are eligible for sale, assignment or transfer
under Rule 144 which shall not include an opinion of Buyer’s counsel), (iv) in connection with a sale, assignment or
other transfer (other than under Rule 144), provided that such Buyer provides the Company with an opinion of counsel to such Buyer,
in a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without registration
under the applicable requirements of the 1933 Act or (v) if such legend is not required under applicable requirements of the 1933
Act (including, without limitation, controlling judicial interpretations and pronouncements issued by the SEC). If a legend is
not required pursuant to the foregoing, the Company shall no later than two (2) Trading Days following the delivery by a Buyer
to the Company or the transfer agent (with notice to the Company) of a legended certificate representing such Securities (endorsed
or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer,
if applicable), together with any other deliveries from such Buyer as may be required above in this Section 5(d), as directed by
such Buyer, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated Securities
Transfer Program and such Securities are Conversion Shares, Interest Shares or Warrant Shares, credit the aggregate number of shares
of Common Stock to which such Buyer shall be entitled to such Buyer’s or its designee’s balance account with DTC through
its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and deliver (via reputable overnight courier) to such Buyer, a certificate representing such
Securities that is free from all restrictive and other legends, registered in the name of such Buyer or its designee (the date
by which such credit is so required to be made to the balance account of such Buyer’s or such Buyer’s nominee with
DTC or such certificate is required to be delivered to such Buyer pursuant to the foregoing is referred to herein as the “Required
Delivery Date”). The Company shall be responsible for any transfer agent fees or DTC fees with respect to any issuance
of Securities or the removal of any legends with respect to any Securities in accordance herewith.




    	27 



    	 



    

 


(e)


Failure to Timely
Deliver; Buy-In. If the Company fails to (i) issue and deliver (or cause to be delivered) to a Buyer by the Required Delivery
Date a certificate representing the Securities so delivered to the Company by such Buyer that is free from all restrictive and
other legends or (ii) credit the balance account of such Buyer’s or such Buyer’s nominee with DTC for such number of
Conversion Shares or Warrant Shares so delivered to the Company, and if on or after the Required Delivery Date such Buyer (or any
other Person in respect, or on behalf, of such Buyer) purchases (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by such Buyer 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 Buyer so anticipated
receiving from the Company without any restrictive legend, then, in addition to all other remedies available to such Buyer, the
Company shall, within five (5) Trading Days after such Buyer’s request and in such Buyer’s sole discretion, either
(i) pay cash to such Buyer in an amount equal to such Buyer’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”), at which point the Company’s obligation to so deliver such certificate
or credit such Buyer’s balance account shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation
to so deliver to such Buyer a certificate or certificates or credit such Buyer’s DTC account representing such number of
shares of Common Stock that would have been so delivered if the Company timely complied with its obligations hereunder and pay
cash to such Buyer in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares
of Conversion Shares or Warrant Shares (as the case may be) that the Company was required to deliver to such Buyer by the Required
Delivery Date multiplied by (B) the lowest Closing Sale Price (as defined in the Warrants) of the Common Stock on any Trading Day
during the period commencing on the date of the delivery by such Buyer to the Company of the applicable Conversion Shares or Warrant
Shares (as the case may be) and ending on the date of such delivery and payment under this clause (ii).


6.


CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.


(a)


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


(i)


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


(ii)


Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price for the Note and the related Warrants being purchased
by such Buyer at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the
Company.


(iii)


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


7.


CONDITIONS
TO EACH BUYER’S OBLIGATION TO PURCHASE. 


(a)


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




    	28 



    	 



    

 


(i)


The Company
and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer each of the Transaction Documents
to which it is a party and the Company shall have duly executed and delivered to such Buyer a Note (in such original principal
amount as is set forth across from such Buyer’s name in column (3) of the Schedule of Buyers) and the related Warrants
(initially for such aggregate number of shares of Warrant Shares as is set forth across from such Buyer’s name in columns
(4) and (5) of the Schedule of Buyers, respectively) being purchased by such Buyer at the Closing pursuant to this Agreement.


(ii)


Such
Buyer shall have received the opinion of __________, the Company’s counsel, dated as of the Closing Date, in the form reasonably
acceptable to such Buyer.


(iii)


The Company
shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such Buyer,
which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.


(iv)


The Company
shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Delaware Secretary
of State within ten (10) days of the Closing Date.


(v)


The Company
shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of the Company
and dated as of the Closing Date, as to (I) the resolutions consistent with Section 3(b) as adopted by the Company’s board
of directors in a form reasonably acceptable to such Buyer, (II) the Certificate of Incorporation of the Company and (III) the
Bylaws of the Company, each as in effect at the Closing.


(vi)


Each
and every representation and warranty of the Company shall be true and correct in all material respects (other than representations
and warranties that are already qualified by materiality or Material Adverse Effect which shall be true and correct in all respects)
as of the date when made and as of the Closing Date as though originally made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants, agreements and conditions required to be performed,
satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer shall have received a certificate, duly executed
by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters
as may be reasonably requested by such Buyer in the form acceptable to such Buyer.


(vii)


The Company
shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of Common Stock
outstanding on the Closing Date immediately prior to the Closing.


(viii)


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




    	29 



    	 



    

 


(ix)


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


(x)


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


(xi)


Since
the date of execution of this Agreement, no event or series of events shall have occurred that has or reasonably could be expected
to have a Material Adverse Effect.


(xii)


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


(xiii)


Such
Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company,
setting forth the wire transfer instructions of the Company.


8.


TERMINATION.



In
the event that the Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such
Buyer shall have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the
close of business on such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate
this Agreement under this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this
Agreement to have been consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment
of the sale and purchase of the Notes and the Warrants shall be applicable only to such Buyer providing such written notice, provided
further that no such termination shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the
expenses described in Section 4(g) above. Nothing contained in this Section 8 shall be deemed to release any party from any liability
for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the
right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction
Documents.




    	30 



    	 



    

 


9.


MISCELLANEOUS.


(a)


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


(b)


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


(c)


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




    	31 



    	 



    

 


(d)


Severability.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding
anything to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following
is required or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company and/or
any of its Subsidiaries (as the case may be), or payable to or received by any of the Buyers, under the Transaction Documents (including
without limitation, any amounts that would be characterized as “interest” under applicable law) exceed amounts permitted
under any applicable law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant
the Transaction Documents is finally judicially determined to be contrary to any such applicable law, such obligation to pay, payment
or collection shall be deemed to have been made by mutual mistake of such Buyer, the Company and its Subsidiaries and such amount
shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as
would not be so prohibited by the applicable law. Such adjustment shall be effected, to the extent necessary, by reducing or refunding,
at the option of such Buyer, the amount of interest or any other amounts which would constitute unlawful amounts required to be
paid or actually paid to such Buyer under the Transaction Documents. For greater certainty, to the extent that any interest, charges,
fees, expenses or other amounts required to be paid to or received by such Buyer under any of the Transaction Documents or related
thereto are held to be within the meaning of “interest” or another applicable term to otherwise be violative of applicable
law, such amounts shall be pro-rated over the period of time to which they relate.


 




    	32 



    	 



    

 


(e)


Entire Agreement;
Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto and
the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the Company,
its Subsidiaries, their affiliates and Persons acting on their behalf solely with respect to the matters contained herein and therein,
and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein
and therein; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed
to) (i) have any effect on any agreements any Buyer has entered into with, or any instruments any Buyer has received from, the
Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Buyer in the Company
or (ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries, or any rights of
or benefits to any Buyer or any other Person, in any agreement entered into prior to the date hereof between or among the Company
and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer received from the Company and/or any of its Subsidiaries
prior to the date hereof, and all such agreements and instruments shall continue in full force and effect. Except as specifically
set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may
be amended other than by an instrument in writing signed by the Company and the Required Holders (as defined below), and any amendment
to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and
holders of Securities, as applicable, provided that no such amendment shall be effective to the extent that it (1) applies to less
than all of the holders of the Securities then outstanding or (2) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No waiver shall be
effective unless it is in writing and signed by an authorized representative of the waiving party, provided that the Required Holders
may waive any provision of this Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions
of this Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that no such waiver shall
be effective to the extent that it (1) applies to less than all of the holders of the Securities then outstanding (unless a party
gives a waiver as to itself only) or (2) imposes any obligation or liability on any Buyer without such Buyer’s prior written
consent (which may be granted or withheld in such Buyer’s sole discretion). The Company has not, directly or indirectly,
made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents
except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth
in this Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any financing to the Company,
any Subsidiary or otherwise. As a material inducement for each Buyer to enter into this Agreement, the Company expressly acknowledges
and agrees that (i) no due diligence or other investigation or inquiry conducted by a Buyer, any of its advisors or any of its
representatives shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to
any of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document and (ii)
unless a provision of this Agreement or any other Transaction Document is expressly preceded by the phrase “except as disclosed
in the SEC Documents,” nothing contained in any of the SEC Documents shall affect such Buyer’s right to rely on, or
shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained
in this Agreement or any other Transaction Document. “Required Holders” means (i) prior to the Closing Date,
each Buyer entitled to purchase Notes at the Closing and (ii) on or after the Closing Date, holders of a majority of the Registerable
Securities as of such time (excluding any Registerable Securities held by the Company or any of its Subsidiaries as of such time)
issued or issuable hereunder or pursuant to the Notes and/or the Warrants (or the Buyers, with respect to any waiver or amendment
of Section 4(l).




    	33 



    	 



    

 


(f)


Notices. Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered: (i) upon receipt, if delivered personally; (ii) when sent, if sent by facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii)
when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the sending
party and the sending party does not receive an automatically generated message from the recipient’s e-mail server that such
e-mail could not be delivered to such recipient) and (iv) if sent by overnight courier service, one (1) Business Day after deposit
with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the
same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:


	If to the Company:	U-Vend, Inc.
	 	1507 7th Street, #425
	 	Santa Monica, CA  90401
	 	Phone No.:  (310) 295-1922
	 	Attention:  Chief Executive Officer
	 	 
	With a copy (for 	 
	informational 	 
	purposes only) to:          	Law Office of Gary A. Agron
	 	5445 DTC Pkwy, Suite 520
	 	Greenwood Village, CO 80111
	 	Phone No.:  (303) 770-7254
	 	Attention:  Gary A. Agron
	 	 
	If to the	 
	Transfer Agent:	Corporate Stock Transfer
	 	3200 Cherry Creek Drive South
	 	Suite #430
	 	Denver, CO  80209
	 	Phone No.:  (303) 282-4800
	 	Attention:  Carylyn
    K. Bell


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


(g)


Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including
any assignee of any of the Securities (but only with respect to an assignee of such Securities to the extent a Buyer has executed
a written assignment of rights hereunder with respect thereto). The Company shall not assign this Agreement or its rights and obligations
hereunder without the prior written consent of the Required Holders, including, without limitation, by way of a Fundamental Transaction
(as defined in the Warrants) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Warrants) or a Fundamental Transaction (as defined in the Notes) (unless the Company is in compliance with the
applicable provisions governing Fundamental Transactions set forth in the Notes). A Buyer may assign some or all of its rights
hereunder in connection with any transfer of any of its Securities without the consent of the Company, in which event such assignee
shall be deemed to be a Buyer hereunder with respect to such assigned rights.




    	34 



    	 



    

 


(h)


No Third Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees referred to in
Section 9(k).


(i)


Survival. The
representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.


(j)


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


(k)


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




    	35 



    	 



    

 


(l)


Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality
or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock
and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after
the date of this Agreement.


(m)


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


(n)


Payment Set Aside;
Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to any of the other
Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments
or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other
Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement
and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be
converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement,
the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.




    	36 



    	 



    

 


(p)


Judgment Currency.


(i)


If for
the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction Document
in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the “Judgment Currency”) an amount due in US Dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:


(1)


the date actual
payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction that
will give effect to such conversion being made on such date: or


(2)


the date on
which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which
such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment Conversion
Date”).


(ii)


If in
the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is a change in the Exchange
Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall
pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange
Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.


(iii)


Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement.




    	37 



    	 



    

 


(q)


Independent Nature
of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations
of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the
Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption
that the Buyers are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated
by the Transaction Documents or any matters, and the Company acknowledges that the Buyers are not acting in concert or as a group,
and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by the Transaction
Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction Documents has been made by such Buyer
independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with
such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such Buyer in connection with monitoring
such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Buyer
confirms that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The use
of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of the
Company, not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and
not because it was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained
in this Agreement and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between
the Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers.


[signature
pages follow]







    	38 



    	 



    

 


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


	 	COMPANY:
	 	 
	 	U-VEND, INC.
	 	 
	 	 
	 	By:	 
	 	 	
        Name:

        Title:



 




    	 



    	 



    

 


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


	 	BUYERS:
	 	 
	 	 
	 	 
	 	 
	 	By:	 
	 	 	
        Name:

        Title: