SECURITIES PURCHASE AGREEMENT


 


     This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of July 14, 2014, by and between Inergetics,
Inc., a Delaware corporation, with headquarters located at 550 Broad Street, Suite 1212, Newark, New Jersey 7102 (the
“Company”), and 31 GROUP LLC, a New York limited liability company, with its address at 5 Hanover Square,
New York, New York 10004 (the “Buyer”).


 


WHEREAS:


 


     A.
The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “1933 Act”);


 


     B.
Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement
(i) a 12% secured subordinated convertible promissory note of the Company, in the form attached hereto as Exhibit A, in the principal
face amount of $1,500,000 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect
thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock of the Company (the
“Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note and (ii) a warrant
of the Company, in the form attached hereto as Exhibit B, to purchase 2,500,000 shares of Common Stock (the “Warrant”),
upon the terms and subject to the limitations and conditions set forth in such Warrant; and


 


     C.
The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such Note and Warrant.


 


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


 


     1.
Purchase and Sale of Note and Warrant.


 


          a.
Purchase of Note and Warrant. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and
the Buyer agrees to purchase from the Company the Note and Warrant.


 


          b.
Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note and Warrant
to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately
available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note
and Warrant, and (ii) the Company shall deliver such duly executed Note and Warrant on behalf of the Company, to the Buyer, against
delivery of such Purchase Price.


 


          c.
Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section
7 below, the date and time of the issuance and sale of the Note and Warrant pursuant to this Agreement (the “Closing Date”)
shall be 12:00 noon, Eastern Standard Time on July 14, 2014, or such other mutually agreed upon time. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to
by the parties.


 


     2.
Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:


 


          a.
Investment Purpose. As of the date hereof, the Buyer is purchasing the Note, the Warrant, the shares of Common Stock issuable
upon conversion of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if
any, as are issuable (i) on account of interest on the Note, (ii) as a result of the events described in Sections 1.3 and 1.4(g)
of the Note or (iii) upon an Event of Default (as defined in the Note), such shares of Common Stock being collectively referred
to herein as the “Conversion Shares”), and the shares of Common Stock issuable upon exercise of the Warrant (the “Warrant
Shares” and, collectively with the Note, the Warrant, and the Conversion Shares, the “Securities”) for its own
account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted
from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does
not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities
at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.


 


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


 




    	1



    	 



    

 


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


 


          d.
Information. The Buyer and its advisors, if any, have been, and for so long as the Note or Warrant remain outstanding will
continue to be, 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 the Buyer or its advisors. The Buyer and its advisors, if
any, have been, and for so long as the Note or Warrant remain outstanding will continue to be, afforded the opportunity to ask
questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information
and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure
to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives
shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section
3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware
of any facts that may constitute a breach of any of the Company's representations and warranties made herein.


 


          e.
Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the Securities.


 


          f.
Transfer or Re-sale. The Buyer understands that (i) the sale or resale of the Securities has not been and is not being registered
under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities
are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company,
at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in
comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees
to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the
Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor
rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of
counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall
be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the
terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act)
may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii)
neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything
else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin
account or other lending arrangement. Notwithstanding anything in this Agreement to the contrary, no sale shall be made pursuant
to Rule 144 on any date that the Company is not in compliance with its requirement to file Forms 10-K or 10-Q with the SEC, regardless
of whether the Securities (in whatever form) contain a restrictive legend or electronic notation.


 


          g.
Legends. The Buyer understands that the Note and Warrant and, until such time as the Conversion Shares or Warrant Shares
have been registered under the 1933 Act, may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number
of securities as of a particular date that can then be immediately sold, the Conversion Shares and Warrant Shares may bear a restrictive
legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such
Securities):


 


“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE 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 (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”


  






    	2



    	 



    

 


     The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for
sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation
S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such
holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act,
which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities,
including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus
delivery requirements, if any. In the event that the Company does not accept such opinion of counsel provided by the Buyer with
respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline,
it will be considered an Event of Default pursuant to Section 3.2 of the Note.


 


          h.
Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and
delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance
with its terms.


 


          i.
Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature
page hereto.


 


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


 


     3.
Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:


 


          a.
Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly
organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power
and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now
owned, leased, used, operated and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the
jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business
conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have
a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, operations,
assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated
hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation
or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or
other ownership interest.


 


          b.
Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this
Agreement, the Note, the Warrant and to consummate the transactions contemplated hereby and thereby and to issue the Securities,
in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note and Warrant by the
Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance
of the Note and Warrant and the issuance and reservation for issuance of the Conversion Shares and Warrant Shares issuable upon
conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization
of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered
by the Company by its authorized representative, and such authorized representative is the true and official representative with
authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and
(iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute,
a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms except:
(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law. 


 




    	3



    	 



    

 


          c.
Capitalization. As of the date hereof, the authorized capital stock of the Company is as set forth on Schedule 3(c) hereto
consists of: (i) 2,000,000,000 shares of Common Stock, of which 86,119,744 shares are issued and outstanding and
(ii) 500,000 shares of Preferred Stock, $1.00 par value of which the following are outstanding: 65,141 shares of Series B, 64,763
shares of Series C, and 211,073 shares of Series G. Except as set forth on Schedule 3(c) hereto, no shares are reserved for issuance
pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (other than the
Note and Warrant) exercisable for, or convertible into or exchangeable for shares of Common Stock and a suitable amount of shares
are reserved for issuance upon conversion of the Note and exercise of the Warrant (subject to adjustment pursuant to the Company’s
covenant set forth in Section 4(g) below). All of such outstanding shares of capital stock are, or upon issuance will be, duly
authorized, validly issued, fully paid and non-assessable and have been issued in compliance with all federal and state securities
laws. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders
of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as set forth on
Schedule 3(c) hereto, as of the date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe
for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of
its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares
of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company
or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there
are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing
rights to security holders) that will be triggered by the issuance of the Note, the Warrant, the Conversion Shares or the Warrant
Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in
effect on the date hereof (“Certificate of Incorporation”), the Company’s Bylaws, as in effect on the date hereof
(the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company and
the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this
representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.


 


          d.
Issuance of Shares. The Conversion Shares and Warrant Shares are duly authorized and reserved for issuance and, upon conversion
of the Note and/or exercise of the Warrant in accordance with its respective terms, will be validly issued, fully paid and non-assessable,
and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.


 


          e.
Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock
upon the issuance of the Conversion Shares and Warrant Shares upon conversion of the Note and exercise of the Warrant, respectively.
The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note and Warrant Shares
upon exercise of the Warrant in accordance with this Agreement, the Note and the Warrant is absolute and unconditional regardless
of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.


 




    	4



    	 



    

 


          f.
No Conflicts. The execution, delivery and performance of this Agreement, the Note and the Warrant by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and
reservation for issuance of the Conversion Shares and Warrant Shares) will not (i) conflict with or result in a violation of any
provision of the Certificate of Incorporation or By-laws or (ii) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license 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 federal and state securities laws and regulations and regulations of any self-regulatory organizations
to which the Company or its securities are subject) 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 for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither
the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents
and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time
or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries
has taken any action or failed to take any action that would 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 by which
any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are
not being conducted, and shall not be conducted so long as a Buyer owns any of the Securities in violation of any law, ordinance
or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933
Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock
market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the Note
or the Warrant in accordance with the terms hereof or thereof, or to issue and sell the Note and Warrant in accordance with the
terms hereof and to issue the Conversion Shares upon conversion of the Note and Warrant Shares upon exercise of the Warrant. All
consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence
have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the
Over-the-Counter Bulletin Board (the “OTCQB”) and does not reasonably anticipate that the Common Stock will be delisted
by the OTCQB in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or circumstances which might
give rise to any of the foregoing.


 


          g.
SEC Documents; Financial Statements. During the past two years, the Company has timely 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 Securities
Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated
by reference therein, being hereinafter referred to herein as the “SEC Documents”). The Company has delivered to the
Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. 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 light of the circumstances under which they were made, not misleading. None
of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except
for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates,
the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have
been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods
involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the
Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred
in the ordinary course of business subsequent to four months prior to the date hereof and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected
in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating
results of the Company. The Company is subject to the reporting requirements of the 1934 Act.


 


h. Absence of Certain
Changes. Since the date of the latest financial statements included in the SEC reports: (i) there has been no event, occurrence
or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to generally accepted accounting principles (“GAAP”) or disclosed in filings made with the SEC,
(iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to any officer, director or affiliate, except pursuant
to existing Company equity incentive plans and outstanding shares of Series G Preferred Stock. The Company does not have pending
before the SEC any request for confidential treatment of information. Except for the issuance of the Securities contemplated by
this Agreement, no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their
respective business, properties, operations or financial condition, that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least
one trading day prior to the date that this representation is made.


 




    	5



    	 



    

 


          i.
Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to
the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard
to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.


 


          j.
Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to
use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service
marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business
as now operated (and, as presently contemplated to be operated in the future); there is no claim or action by any person pertaining
to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right of the Company or of a Subsidiary
with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated
to be operated in the future); to the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current
and intended products, services and processes do not infringe on any Intellectual Property or other rights held by any person;
and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of
its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual
Property.


 


          k.
No Materially Adverse Contracts, Etc. Except as disclosed pn schedule 3(k), neither the Company nor any of its Subsidiaries
is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Except as disclosed
on schedule 3(k), neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment
of the Company’s officers has or is expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary: (i)
is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or
both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other material
agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body or (iii) is or has
been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal,
state and local laws applicable to its business and all such laws that affect the environment, except in each of the foregoing
cases as could not have or reasonably be expected to result in a Material Adverse Effect.


 


          l.
Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other
tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books
provisions 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 know of no basis for any such claim. The Company has not executed a waiver with respect to the
statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s
tax returns is presently being audited by any taxing authority.


 


          m.
Certain Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries
makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could
obtain from third parties and other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors,
or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing
of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from
any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.


 




    	6



    	 



    

 


          n.
Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement
and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby
is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make
the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance
has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects,
operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports
filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).


 


          o.
Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting
solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby.
The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by any Buyer or any of
their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice
or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to
the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of
the Company and its representatives.


 


          p.
No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on behalf of the Company or
such affiliate, will sell, offer for sale, or solicit offers to buy or otherwise negotiate with respect to any security (as defined
in the 1933 Act) which will be integrated with the sale of the securities in a manner which would require the registration of the
securities under the Securities Act of 1933, or require stockholder approval, under the rules and regulations of the trading market
for the common stock. The Company will take all action that is appropriate or necessary to assure that its offerings of other securities
will not be integrated for purposes of the Securities Act of 1933 or the rules and regulations of the trading market, with the
issuance of securities contemplated hereby.


 


          q.
No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions,
transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.


 


          r.
Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate
its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and
there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company
Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company
Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. In the prior four months to the date hereof, neither the Company nor any of its Subsidiaries
has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices
relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse
Effect.


 


          s.
Environmental Matters.


 


                    (i)
There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company,
no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions,
activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental
liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal,
state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of
the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing.
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.


 




    	7



    	 



    

 


                    (ii)
Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained
on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials
were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the
period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s
or any of its Subsidiaries’ business.


 


                    (iii)
There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries
that are not in compliance with applicable law.


 


          t.
Title to Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and
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 are described in Schedule 3(t) or such as would
not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.


 


          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 any reason to believe that
it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. The Company
has provided to Buyer true and correct copies of all policies relating to commercial general liability coverage.


 


          v.
Internal Accounting Controls. Except as set forth in the SEC Reports, the Company is in material compliance with all provisions
of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company and the Subsidiaries maintain
a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has
established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed
such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls
and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange
Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal
control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely
to materially affect, the Company’s internal control over financial reporting.


 


          w.
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 Subsidiary has, in the course of his actions for, or on behalf of, the Company,
used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated
or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.


 




    	8



    	 



    

 


x. Application of
Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws
of its state of incorporation that is or could become applicable to the Buyer as a result of the Buyer and the Company fulfilling
their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s
issuance of the Securities and the Buyer’ ownership of the Securities.


 


          y.
No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement
will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment
Company”). The Company is not controlled by an Investment Company.


 


z. No Disagreements
with Accountants and Lawyers; Outstanding SEC Comments. There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is or immediately after the Closing Date will be current with respect to any fees owed to its accountants
which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents. There
are no unresolved comments or inquiries received by the Company or its Affiliates from the SEC which remain unresolved as of the
date hereof.


 


aa. Bad Actor Disqualification.


 


(i) No Disqualification
Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act ("Regulation
D Securities"), none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other
officer of the Company participating in the offering, any beneficial owner of 20% or more of the Company's outstanding voting equity
securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities
Act) connected with the Company in any capacity at the time of sale (each, an "Issuer Covered Person" and, together,
"Issuer Covered Persons") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i)
to (viii) under the Securities Act (a "Disqualification Event"), except for a Disqualification Event covered by Rule
506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification
Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished
to the Buyer a copy of any disclosures provided thereunder.


 


(ii) Other Covered
Persons. The Company is not aware of any person that (i) has been or will be paid (directly or indirectly) remuneration for
solicitation of Buyer in connection with the sale of the Securities and (ii) who is subject to a Disqualification Event.


 


(iii) Notice
of Disqualification Events. The Company will notify the Buyer in writing of (i) any Disqualification Event relating to any
Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any
Issuer Covered Person, prior to any Closing of this Offering.


 


          bb.
Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties
set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be
considered an Event of default under Section 3.4 of the Note.


 


     4.
COVENANTS.


 


          a.
Best Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and
7 of this Agreement.


 


          b.
Form D; Blue Sky Laws. 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 the 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 to qualify the Securities for sale to the Buyer at the applicable
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 Buyer on or
prior to the Closing Date.


 


          c.
Use of Proceeds. The Company shall use the proceeds for general working capital purposes.


 




    	9



    	 



    

 


          d.
Right of First Refusal. Unless it shall have first delivered to the Buyer, at least seventy two (72) hours prior to the
closing of such Future Offering (as defined herein), written notice describing the proposed Future Offering, including the terms
and conditions thereof and proposed definitive documentation to be entered into in connection therewith, and providing the Buyer
an option during the seventy two (72) hour period following delivery of such notice to purchase the securities being offered in
the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence and
the preceding sentence are collectively referred to as the “Right of First Refusal”) (and subject to the exceptions
described below), the Company will not conduct any equity financing (including debt with an equity component) (“Future Offerings”)
during the period beginning on the Closing Date and ending two (two) years following the Closing Date. In the event the terms and
conditions of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed
Future Offering, the Company shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed
Future Offering and the Buyer thereafter shall have an option during the seventy two (72) hour period following delivery of such
new notice to purchase its pro rata share of the securities being offered on the same terms as contemplated by such proposed Future
Offering, as amended. The foregoing sentence shall apply to successive amendments to the terms and conditions of any proposed Future
Offering. The Right of First Refusal shall not apply to any transaction involving (i) issuances of securities in a firm commitment
underwritten public offering (excluding a continuous offering pursuant to Rule 415 under the 1933 Act) or (ii) issuances of securities
as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership or joint venture
(the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition of a business,
product or license by the Company. The Right of First Refusal also shall not apply to (i) the issuance of securities upon exercise
or conversion of the Company’s options, warrants or other convertible securities outstanding as of the date hereof or to
the grant of additional options or warrants, or the issuance of additional securities, under any Company stock option or restricted
stock plan approved by the shareholders of the Company, or (ii) up to $1,500,000 principal amount of additional debt to be sold
to Seahorse Enterprises, LLC, PTS Financial, LLC or any current Company investor, provided that any such issuance otherwise complies
with the terms and provisions of this Agreement. At any time while this provision is effective, the foregoing Right of First Refusal
shall supersede the right of first refusal granted to the Buyer pursuant to Section 4.4 of the Exchange Agreement between the Company
and the Buyer dated as of May 21, 2014 (the “Exchange Agreement”).


 


          e.
Expenses. At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith
(“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses,
transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any
consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of
restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise
the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice
by the Buyer or the submission of an invoice by the Buyer Notwithstanding anything herein to the contrary, the Company’s
obligation to reimburse Buyer’s expenses shall be $25,000, less $5,000 which was previously paid by the Company to Buyer’s
counsel.


 


          f.
Financial Information. Upon written request, the Company agrees to send or make available the following reports to the Buyer
until the Buyer transfers, assigns, or sells all of the Securities: (i) within two (2) days after the filing with the SEC, a copy
of its Annual Report on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day
after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with
the making available or giving to the shareholders of the Company, copies of any notices or other information the Company makes
available or gives to such shareholders. As all of the foregoing information is available online, the Company’s failure to
timely comply with the obligations in this subparagraph shall not be deemed an “Event of Default”.


 


          g.
Authorization and Reservation of Shares. The Company shall at all times have authorized, and reserved for the purpose of
issuance, a sufficient number of shares of Common Stock to provide for the full conversion or exercise of the outstanding Note
and Warrant and issuance of the Conversion Shares (based on the Conversion Price of the Note in effect from time to time) and Warrant
Shares in connection therewith and as otherwise required by the Note and Warrant. The Company shall not reduce the number of shares
of Common Stock reserved for issuance upon conversion of the Note or exercise of the Warrant without the consent of the Buyer.
The Company shall at all times maintain the number of shares of Common Stock so reserved for issuance at an amount (“Reserved
Amount”) equal to five times the number that is then actually issuable upon full conversion of the Note (based on the Conversion
Price of the Note in effect from time to time) and exercise of the Warrant. If at any time the number of shares of Common Stock
authorized and reserved for issuance (“Authorized and Reserved Shares”) is below the Reserved Amount, the Company will
promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation,
calling a special meeting of shareholders to authorize additional shares to meet the Company’s obligations under this Section
4(g), in the case of an insufficient number of authorized shares, obtain shareholder approval of an increase in such authorized
number of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company
to ensure that the number of authorized shares is sufficient to meet the Reserved Amount. If the Company fails to obtain such shareholder
approval within sixty (60) days following the date on which the number of Reserved Amount exceeds the Authorized and Reserved Shares,
it will be considered an Event of default under Section 3.4 of the Note.


 




    	10



    	 



    

 


          h.
Listing. The Company shall promptly secure the listing of the Conversion Shares and Warrant Shares upon each national securities
exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of
issuance) and, so long as any Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all Conversion Shares and Warrant Shares from time to time issuable upon conversion of the Note and
exercise of the Warrant, respectively. The Company will obtain and, so long as any Buyer owns any of the Securities, maintain the
listing and trading of its Common Stock on the OTCQB or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”),
the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the NYSE MKT (“NYSE
MKT”) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or
rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall
promptly provide to the Buyer copies of any notices it receives from the OTCQB and any other exchanges or quotation systems on
which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and
quotation systems. If the market price of the Company’s Common Stock shall at any time fall below the price required to continue
to be quoted on the Company’s then principal exchange or automated quotation system, the Company shall as soon as practicable
take all actions necessary to effect a reverse split of the Company’s Common Stock, such that the price would then be at
least fifty percent (50%) above the required price, post-split. If the Company fails to achieve the required reverse split within
thirty (30) days following the date on which the price fell below the required minimum trading price, it will be considered an
Event of default under Section 3.4 of the Note.


 


          i.
Corporate Existence. So long as a Buyer beneficially owns any Note or Warrant, the Company shall maintain its corporate
existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation
or sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction
(i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith
and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCQB, Nasdaq, Nasdaq SmallCap, NYSE
or NYSE MKT.


 


          j.
No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the
Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision
applicable to the Company or its securities.


 


          k.
Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other
remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the
Note.


 


          l.
Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note or Warrant, the Company shall comply
with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of
the 1934 Act.


 


          m.
Trading Activities. Neither the Buyer nor their affiliates has an open short position in the common stock of the Company
and the Buyer agree that they shall not, and that they will cause their affiliates not to, engage in any short sales of or hedging
transactions with respect to the common stock of the Company.


 


n. Exclusivity.
Until November 10, 2014, neither the Company nor its agents shall, directly or indirectly, initiate, publicly announce, seek, negotiate,
solicit. encourage enter into or discuss with any Person other than the Buyer, any transaction involving the sale or issuance of
any securities of the Company or any other transaction having an effect or result similar thereto.


 


o. Non-Frustration
of Purpose. So long as the Buyer or its affiliates hold any Securities, neither the Company nor any of its affiliates or subsidiaries,
nor any of its or their respective officers, employees, directors, agents or other representatives, will effect, enter into, announce
or recommend to its stockholders any agreement, plan, arrangement or transaction the terms of which would or would reasonably be
expected to (i) have a material adverse effect on the Buyer’s investment in the Note, Warrant, Conversion Shares or Warrant
Shares or (ii) restrict, delay, conflict with or impair the ability or right of the Company to timely perform its obligations under
this Agreement, the Note or the Warrant, including, without limitation, the obligation of the Company to timely deliver shares
of Common Stock to the Buyer or its affiliates in accordance with this Agreement, the Note or the Warrant.


 




    	11



    	 



    

 


p. Restricted Transactions.
Except pursuant to the Exchange Agreement, so long as the Buyer owns the Note, neither the Company nor any of its affiliates or
subsidiaries, nor any of its or their respective officers, employees, directors, agents or other representatives, will, without
the prior written consent of the Buyer, directly or indirectly, solicit, accept, enter into, announce, or otherwise cooperate in
any way, assist or participate in or facilitate or encourage, any exchange (i) of any security of the Company or any of its subsidiaries
for any other security of the Company or any of its subsidiaries, except to the extent (x) consummated pursuant to an exchange
registered under a registration statement of the Company filed pursuant to the 1933 Act and declared effective by the SEC or (y)
such exchange is exempt from registration pursuant to an exemption provided under the 1933 Act (other than Section 3(a)(10) of
the 1933 Act) or (ii) of any indebtedness or other securities of the Company or any of its subsidiaries relying on the exemption
provided by Section 3(a)(10) of the 1933 Act. Notwithstanding the foregoing or anything contained herein to the contrary, neither
the Company nor any of its affiliates or subsidiaries, nor any of its or their respective officers, employees, directors, agents
or other representatives, will, without the prior written consent of the Buyer (which consent may be withheld, delayed or conditioned
in the Buyer’s sole discretion), directly or indirectly, cooperate in any way, assist or participate in, facilitate or encourage
any effort or attempt by any third party to effect any acquisition of securities of the Company by such third party from an existing
holder of such securities in connection with a proposed exchange of such securities of the Company (whether pursuant to Section
3(a)(9) or 3(a)(10) of the 1933 Act or otherwise).


 


q. Prohibition on
Variable Rate Transactions. So long as the Note sold to the Buyer in this offering remains outstanding and owned by the Buyer,
the Company shall not, directly or indirectly, (i) issue or sell 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,
or (ii) enter into any agreement (including, without limitation, an “equity line of credit” or an “at-the-market
offering”) whereby the Company or any of its subsidiaries may sell securities at a future determined price (other than standard
and customary “preemptive” or “participation” rights). The 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.


 


r. Non-Public Information.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
covenants and agrees that after the Closing Date neither it, nor any other person acting on its behalf, will provide Buyer or its
agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto
the Buyer shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands
and confirms that the Buyer shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
The Buyer acknowledges that it is aware that the United States securities laws prohibit any person who has material non-public
information about a company from purchasing or selling securities of such company, or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities,
and the Buyer agrees not to engage in any unlawful trading in securities of the Company or unlawful misuse or misappropriation
of any such information. Buyer agrees to maintain the confidentiality of and not disclose or use (except for purposes relating
to the transactions contemplated by this Agreement) any confidential, proprietary or non-public information disclosed by the Company
to Buyer.


 




    	12



    	 



    

 


     5.
Transfer Agent Instructions. The Company covenants and agrees that it will at all times while any Securities remain outstanding
maintain a duly qualified independent transfer agent. On or prior to the initial Closing Date, the Company shall provide a copy
of its agreement with the transfer agent to the Buyer. If a new transfer agent is appointed at any time, the Company shall provide
the Buyer with a copy of the new agreement within three (3) business days of its execution. The Company shall issue irrevocable
instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion
Shares and Warrant Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note
and exercise of the Warrant in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In
the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide, prior to the effective date of
such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase
Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed
by the successor transfer agent to Borrower and the Borrower. Prior to registration of the Conversion Shares under the 1933 Act
or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities
as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in
Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion
Shares and/or Warrant Shares, prior to registration of the Conversion Shares and Warrant Shares under the 1933 Act or the date
on which the Conversion Shares and/or Warrant Shares may be sold pursuant to Rule 144 without any restriction as to the number
of Securities as of a particular date that can then be immediately sold), will be given by the Company to its transfer agent and
that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided
in this Agreement, the Note and the Warrant; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or
hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares
or Warrant Shares to be issued to the Buyer upon conversion, exercise or otherwise pursuant to the Note or Warrant as and when
required by the Note, Warrant and/or this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to
remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer
instructions in respect thereof) on any certificate for any Conversion Shares or Warrant Shares issued to the Buyer upon conversion,
exercise or otherwise pursuant to the Note or Warrant as and when required by the Note, Warrant and/or this Agreement. Nothing
in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section 2(g) hereof to comply
with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If a Buyer provides the Company,
at the cost of the Buyer, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions,
to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale
or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144,
the Company shall permit the transfer, and, in the case of the Conversion Shares and Warrant Shares, promptly instruct its transfer
agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the
Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for
a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to
an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without
any bond or other security being required.


 


     6.
Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note
and Warrant to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following
conditions thereto, 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:


 


          a.
The Buyer shall have executed this Agreement and delivered the same to the Company.


 


          b.
The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.


 


          c.
The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date),
and the applicable 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 the Buyer at or prior to the Closing Date.


 


          d.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.


 


          e.  The
current Senior Secured Creditors of the Company have consented to the transactions contemplated hereby and
have executed a Subordination Agreement with the Buyer in form and substance acceptable to the current Senior Secured Creditors.


 


     7.
Conditions to the Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note and Warrant
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 Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:


 




    	13



    	 



    

 


          a.
The Company shall have executed this Agreement and delivered the same to the Buyer.


 


          b.
The Company shall have delivered to the Buyer duly executed Note and Warrant (in such denominations as the Buyer shall request)
in accordance with Section 1(b) above.


 


          c.
The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and
acknowledged in writing by the Company’s Transfer Agent.


 


          d.
The Company shall have delivered to the Buyer duly executed security agreement, in the form attached hereto as Exhibit C.


 


          e.
The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date)
and the Company 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 the Company at or prior to the Closing Date. The Buyer
shall have received a certificate or certificates, 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 the Buyer including, but not limited
to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions
relating to the transactions contemplated hereby.


 


          f.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.


 


          g.
No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but
not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934
Act reporting obligations, or in the sole discretion of Buyer, the transaction’s risk profile, market pricing or implied
volatility substantially changes, due diligence concerns arise, or any other conditions material to the successful closing of the
transaction are not acceptable to the Buyer.


 


          h.
The Conversion Shares and Warrant Shares shall have been authorized for quotation on the OTCQB and trading in the Common Stock
on the OTCQB or such equivalent exchange and shall not have been suspended by the SEC or the OTCQB or such equivalent exchange.


 


          i.
The Buyer shall have received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.


 


          j.
The Buyer shall have received an opinion of counsel for the Company, in form and substance satisfactory to the Buyer.


 


          k.
The Buyer shall have received a report from the Company’s transfer agent identifying the number of shares of Common Stock
outstanding on the applicable Closing Date immediately prior to the applicable Closing.


 


          l.
The Buyer shall have received such other documents, instruments or certificates relating to the transactions contemplated by this
Agreement reasonably requested by the Buyer to consummate the transactions contemplated hereby.


 






    	14



    	 



    

 


     8.
Registration Rights.


 





          a.
Required Registration. On or prior to the 45th day following the Closing Date (the “Filing Deadline”),
the Company shall prepare and file with the Securities and Exchange Commission a Registration Statement (as hereinafter defined)
covering the resale of all of the Registrable Securities (as hereinafter defined) for an offering to be made on a continuous basis
pursuant to Rule 415 under the 1933 Act. The Company shall use its commercially reasonable efforts to cause a Registration Statement
to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event prior to the
120th day following the Closing Date (the “Effectiveness Deadline”), and shall use its commercially reasonable
efforts to keep such Registration Statement continuously effective under the 1933 Act until all Registrable Securities covered
by such Registration Statement have been sold, or may be sold without volume or manner-of-sale restrictions pursuant to Rule 144
under the 1933 Act, without the requirement for the Company to be in compliance with the current public information requirement
under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Transfer Agent and the Buyer. The Company shall immediately notify the Buyer via facsimile or by e-mail of the
effectiveness of the Registration Statement on the same trading day that the Company telephonically confirms effectiveness with
the Commission, which shall be the date requested for effectiveness of such Registration Statement. The Company shall, by 9:30
a.m. New York City time on the trading day after the effective date of such Registration Statement, file a final prospectus with
the Securities and Exchange Commission as required by Rule 424 under the 1933 Act. For purposes of Section 8 of this Agreement,
(x) “Registration Statement” means any registration statement of the Company filed under the 1933 Act that covers the
resale of any of the Registrable Securities pursuant to the provisions of this Agreement, including (in each case) the prospectus,
amendments and supplements to such registration statement or prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement and
(y) “Registrable Securities” means (1) all of the Conversion Shares, (2) all of the Warrant Shares, (3) any additional
shares issuable in connection with any anti-dilution provisions associated with the Note and Warrant, and (4) any securities issued
or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing.


 


          b.
Participation in Registrations. Whenever the Company proposes to register any of its securities under the Securities Act,
whether for its own account or for the account of another stockholder (except for the registration of securities (A) to be offered
pursuant to an employee benefit plan on Form S-8 or (B) pursuant to a registration made on Form S-4, or any successor forms then
in effect) at any time and the registration form to be used may be used for the registration of the Registrable Securities (a “Piggyback
Registration”), it will so notify in writing all holders of Registrable Securities no later than the earlier to occur of
(i) the third (3rd) day following the Company’s receipt of notice of exercise of other demand registration rights,
or (ii) ten (10) days prior to the anticipated filing date. Subject to the provisions of this Agreement and provided the Registrable
Securities are not covered by an effective and current registration statement filed pursuant to Section8(a) above, the Company
will include in the Piggyback Registration all Registrable Securities, on a pro rata basis based upon the total number of Registrable
Securities with respect to which the Company has received written requests for inclusion within seven (7) days after the applicable
holder’s receipt of the Company’s notice.


 


          c.  Registration
Limitation. Notwithstanding anything to the contrary contained herein, the Company shall not be required to register Registrable
Securities in excess of applicable SEC staff guidelines on the maximum allowable registration of securities for resale by the Investors.
In the event of a cut-back, the Company will use its commercially reasonable efforts to prepare and file with the SEC a subsequent
Registration Statement on Form S-1 as soon as practicable to cover the resale of the remainder of the Registrable Securities which
were not initially registered.


 


          d.
Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be
borne by the Company, whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses (A) with respect to filings required to be made with the trading market on which the Common Stock
is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws, (ii) fees and disbursements
of counsel and independent public accountants for the Company, and (iii) fees and disbursements of one counsel to the Buyer not
to exceed $2,500.


 


     9.
Governing Law; Miscellaneous.


 


          a.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county
of New York.


 


The parties to this Agreement hereby irrevocably
waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of
this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal
service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement, the
Note, the related Security Agreement or any other agreement or document executed in connection with this transaction (each a “Transaction
Document”), by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law.


 




    	15



    	 



    

 


 


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


 


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


 


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


 


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


 


          e.
Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither
the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision
of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.


 


          f.
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall
be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or
(iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:


 


	 	If to the Company, to: 
	 	Inergetics, Inc.
	 	550 Broad Street, Suite 1212
	 	Newark, New Jersey 7102
	 	Attn: Michael C. James, Chief Executive Officer
	 	 
	 	If to the Buyer:
	 	31 GROUP, LLC
	 	5 HANOVER SQUARE
	 	NEW YORK, NY 10004
	 	Attn: Joshua Sason, Managing Member
	 	facsimile: 646-737-9948


 






    	16



    	 



    

 


Each party shall provide notice to the
other party of any change in address.


 


          g.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and assigns. Neither the Company nor any Buyer shall assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), any Buyer may assign its rights hereunder
to any person that purchases Securities in a private transaction from a Buyer or to any of its “affiliates,” as that
term is defined under the 1934 Act, without the consent of the Company.


 


          h.
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.


 


          i.
Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement
shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The
Company agrees to indemnify and hold harmless each of the Buyer and all their officers, directors, employees and agents for loss
or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties
and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of
expenses as they are incurred.


 


          j.
Publicity. The Company, and each of the Buyer shall have the right to review a reasonable period of time before issuance
of any press releases, SEC, OTCQB or FINRA filings, or any other public statements with respect to the transactions contemplated
hereby; provided, however, that the Company shall be entitled, without the prior approval of each of the Buyer, to
make any press release or SEC, OTCQB (or other applicable trading market) or FINRA filings with respect to such transactions as
is required by applicable law and regulations (although each of the Buyer shall be consulted by the Company in connection with
any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).


 


          k.
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 the 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.


 


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


 


          m.
Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer
by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy
at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available
remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity
of showing economic loss and without any bond or other security being required.


 


n. Rescission and
Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any
of the other Transaction Documents, whenever Buyer exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then the Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a
rescission of a conversion of a Note or exercise of a Warrant, the Buyer shall be required to return any shares of Common Stock
subject to any such rescinded conversion or exercise notice.


 




    	17



    	 



    

 


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


 


p. Fees and Expenses.
The Company has agreed to reimburse the Buyer the non-accountable sum of $25,000 for legal fees, of which $5,000 has previously
been paid. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all transfer agent fees,
stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Buyer.


 


[signature page follows]


 




    	18



    	 



    

 


IN WITNESS WHEREOF,
the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.


 


	Inergetics, Inc.	 
	 	 
	By:	s/	 
	 	Michael C. James	 
	 	Chief Executive Officer	 
	 	 
	31 GROUP, LLC 	 
	 	 
	By:	s/	 
	 	Joshua Sason	 
	 	Managing Member	 


 


5 Hanover Square

New York, NY 10004


	SUBSCRIPTION AMOUNT:	 	 	 	 
	Principal Amount of Note:	 	$	1,500,000	 
	Purchase Price:	 	$	1,000,000	 



 






    	19



    	 



    

 




 


Schedule 3(i)


 


Litigation


 


Creative Healthcare Solutions, LLC vs. Millennium Biotechnologies
Inc, Ct. of Common Pleas of Delaware County Ohio, Case No. 07 CV H 11 1420) Millennium was not satisfied with the service
rendered by Creative Healthcare Solutions, LLC in 2005 which were associated with the development of Resurgex Select collateral
materials developed in December of 2005. Millennium subsequently was forced to destroy and dispose of over 80% of the materials
provided by Creative Healthcare Solutions due to the poor quality of the materials. Millennium has been unsuccessful in resolving
the dispute and subsequently Creative Healthcare Solutions, LLC has filed legal action for demand of payment in the amount of
$63,718 for services rendered. Millennium continues to negotiate a settlement through counsel with regards to this legal proceeding.


 


Robert Half International vs. Millennium Biotechnologies,
Inc. filed on September 30, 2009 in the Superior Court of New Jersey, Law Division, Middlesex County. Robert Half International
claims a total of $18,507 plus costs and fees based upon the Millennium Biotechnologies, Inc.’s failure to pay the plaintiff
the fees associated with the full time hiring of an employee.


 






    	 



    	 



    



 


Schedule 3 (c)


 


 


	Capitalization Table as of 7/14/2014	 	 	 	 
		 	 	 	 	0.08	 	 	 	 
	 	 	 	 	 	Conversion	 	 	Common Stock	 
	 	 	Amount	 	 	Feature / Price	 	 	Equivalent	 
	 	 	 	 	 	 	 	 	 	 
	Convertible Debt Outstanding	 	 	 	 	 	 	 	 	 	 	 	 
	Convertible Senior Secured Notes	 	$	1,455,128	 	 	$	0.08	 	 	 	18,189,100	 
	Secured Notes	 	 	16,600	 	 	 	0.08	 	 	 	207,500	 
	2012 and 2014 Notes	 	 	424,535	 	 	$	0.20	 	 	 	2,122,675	 
	2014 Convertible Notes	 	 	110,000	 	 	 	0.09	 	 	 	1,222,222	 
	2014 31 Group Convertible Notes	 	 	1,303,129	 	 	 	0.04	 	 	 	32,578,225	 
	 	 	 	3,309,392	 	 	 	 	 	 	 	 	 
	Interest Payable	 	 	 	 	 	 	 	 	 	 	 	 
	Convertible Senior Secured Notes	 	 	42,441	 	 	$	0.08	 	 	 	530,513	 
	Secured Notes	 	 	29,667	 	 	$	0.08	 	 	 	370,838	 
	2012 and 2014 Notes	 	 	21,819	 	 	$	0.20	 	 	 	109,096	 
	2014 Convertible Notes	 	 	-	 	 	$	0.09	 	 	 	-	 
	2014 31 Group Convertible Notes	 	 	21,977	 	 	$	0.04	 	 	 	549,431	 
	 	 	 	115,904	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Common Shares Outstanding	 	 	 	 	 	 	 	 	 	 	86,119,744	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Derivative Securities Outstanding	 	 	 	 	 	 	 	 	 	 	 	 
	Common Shares to be issued	 	 	 	 	 	 	 	 	 	 	3,517,028	 
	Series B Preferred	 	 	 	 	 	 	 	 	 	 	130,282	 
	Series C Preferred	 	 	 	 	 	 	 	 	 	 	64,763	 
	Series G Preferred	 	 	211,073	 	 	 	0.08	 	 	 	131,920,625	 
	Common Stock Subscribed	 	 	 	 	 	 	 	 	 	 	-	 
	Management Warrants - prior 2012	 	 	 	 	 	$	0.17	 	 	 	7,502,144	 
	Management - 2012	 	 	 	 	 	$	0.10	 	 	 	7,000,000	 
	Employees	 	 	 	 	 	$	0.1651	 	 	 	500,000	 
	Other Warrants below $1.00	 	 	 	 	 	$	0.20	 	 	 	3,727,500	 
	Other Warrants above $1.00	 	 	 	 	 	$	16.00	 	 	 	62,500	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fully Dilutes Shares Outstanding	 	 	 	 	 	 	 	 	 	 	296,424,185