SECURITIES
PURCHASE AGREEMENT


 


This Securities Purchase
Agreement (this “Agreement”) is dated as of May 19, 2014, by and between Axxess Pharma, Inc., a Nevada corporation
(the “Company”), and Seaside 88, LP, a Florida limited partnership (such investor, including its successors
and assigns, “Seaside”).


 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined herein),
and Rule 506 promulgated thereunder, the Company desires to issue and sell to Seaside, and Seaside desires to purchase from the
Company, securities of the Company as more fully described in this Agreement.


 


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


 


ARTICLE I.


DEFINITIONS


 


1.1         Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:


 


“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.


 


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


 


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


 


“Agreement”
shall have the meaning ascribed to such term in the introduction hereof, as the same may be amended from time to time.


 


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


 


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


 


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


 


“Cap”
means 5,000,000 shares of Common Stock.


 


“Closing”
means the Initial Closing and each Subsequent Closing.


 


“Closing
Dates” means the Initial Closing Date and each Subsequent Closing Date.


 


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


 




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


 


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


 


“Company”
shall have the meaning ascribed to such term in the introduction hereof, including any successor or assign thereof.


 


“Company
Counsel” means Szaferman Lakind Blumstein & Blader, PC or other counsel
(including in-house counsel of the Company) reasonably acceptable to Seaside.


 


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


 


“Dollar
Limit” shall have the meaning ascribed to such term in Section 2.5(b).


 


“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(r).


 


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


 


“Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1(ll).


 


“Final
Subsequent Closing Date” shall mean the date of the Subsequent Closing that occurs on the earlier of (a) such time as
Seaside has purchased that number of Shares equal to the Cap, and (b) the one-year anniversary of the Initial Closing Date.


 


“Floor”
shall mean $0.14 (as the same may be proportionately adjusted in respect of any stock split, stock dividend, combination, recapitalization
or the like with respect to the Common Stock).


 


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


 


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


 


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


 


“Initial
Closing Date” means the Trading Day when all of the Transaction Documents and all other documents required to be executed
and delivered in connection with the Initial Closing pursuant this Agreement have been executed and delivered by the applicable
parties thereto, and all conditions precedent to Seaside’s obligations to purchase the Shares, and the Company’s obligations
to issue and deliver the Shares, have been satisfied or waived with respect to the Initial Closing.


 




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


 


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


 


“Liens”
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 


“Material
Adverse Effect” means any condition, event, change or effect that would reasonably be expected to have a material adverse
effect on (a) the legality, validity or enforceability of any Transaction Document, (b) the results of operations, assets, business,
prospects or financial condition of the Company and its Subsidiaries, taken as a whole, or (c) the Company’s ability to perform
in any material respect on a timely basis its obligations under any Transaction Document, but shall not mean or include any condition,
event or change which (1) is or results from events or occurrences relating to the economy in general (including arising from terrorist
attacks, acts of war or civil unrest) or the Company’s industry in general and not specifically relating to the Company or
having a disproportionate impact on the Company, or (2) results from the announcement of this Agreement or the transactions contemplated
hereby or by the other Transaction Documents.


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m).


 


“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(mm).


 


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


 


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


 


“Per
Share Purchase Price” shall be an amount equal to the lower of (a) the average of the high and low trading prices (measured
to two decimal places) of the Common Stock on the Trading Market during normal trading hours for the ten (10) consecutive Trading
Days immediately prior to a Closing Date, as shown on Yahoo Finance, multiplied by 0.50 and (b) the average of the high and low
trading prices (measured to two decimal places) of the Common Stock on the Trading Market during normal trading hours for the Trading
Day immediately prior to a Closing Date, as shown on Yahoo Finance, multiplied by 0.55.


 


“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 




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“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).


 


“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).


 


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


 


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


 


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


 


“Seaside”
shall have the meaning ascribed to such term in the introduction hereof.


 


“Seaside
Party” shall have the meaning ascribed to such term in Section 4.8.


 


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


 


“Share
Amount” means the number of Shares to be purchased at a Closing, such number to be equal to the lesser of (a) 700,000
shares, and (b) ten percent (10.0%) of the total number of shares of Common Stock traded during normal trading hours during the
twenty (20) Trading Days immediately preceding such Closing as shown on Yahoo Finance.


 


“Shares”
means the shares of Common Stock issued or issuable to Seaside pursuant to this Agreement (as the same may be proportionately adjusted
in respect of any stock split, stock dividend, combination, recapitalization or the like with respect to the Common Stock).


 


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


 


“Subscription
Amount” means the amount to be paid for Shares at a Closing by Seaside in United States dollars and in immediately available
funds, calculated as the product of (a) the Share Amount for such Closing and (b) the Per Share Purchase Price for such Closing.


 


“Subsequent
Closing” means each closing of the purchase and sale of the Shares pursuant to Section 2.2.


 




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“Subsequent
Closing Date” means each subsequent monthly anniversary of the Initial Closing Date (or, if such day is not a Trading
Day, then the first day thereafter that is a Trading Day), commencing the month after the Initial Closing Date and ending on the
Final Subsequent Closing Date, or in each case, such later dates when all conditions precedent to Seaside’s obligations to
purchase the Shares, and the Company’s obligations to issue and deliver the Shares, have been satisfied or waived with respect
to the Subsequent Closing, unless this Agreement is earlier terminated pursuant to the terms hereof.


 


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


 


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


 


“Trading
Market” means whichever of the following markets or exchanges on which the Common Stock is listed or quoted for trading
on the date in question: the New York Stock Exchange, the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the Over-The-Counter Bulletin Board, or the OTC Market Group’s OTCQX, OTCQB or OTC Pink (or any successors
to any of the foregoing).


 


“Transaction
Documents” means this Agreement and all schedules hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.


 


“Transfer
Agent” means Corporate Stock Transfer, Inc., the current transfer agent of the Company, with a mailing address of 3200
Cherry Creek South Drive, Suite 430, Denver, CO 80209 and a telephone number of (303) 282-4800, and any successor transfer agent
of the Company.


 


“Trigger
Date” shall have the meaning ascribed to such term in Section 4.2(a).


 


“VWAP”
means the daily volume weighted average of actual trading prices measured in hundreths of cents of the Common Stock of the Company
on the Trading Market on the applicable date.


 


ARTICLE II.


PURCHASE AND SALE


 


2.1         Initial Closing.
On the Initial Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and Seaside agrees to purchase, the Share Amount
at the Per Share Purchase Price as calculated for the Initial Closing. On the Initial Closing Date, Seaside shall deliver to the
Company, via wire transfer of immediately available funds, the Subscription Amount for the Initial Closing, and the Company shall
deliver to Seaside the Share Amount for the Initial Closing, and the Company and Seaside shall deliver the other items set forth
in Section 2.3 deliverable at the Initial Closing. Upon satisfaction or waiver of the covenants and conditions set forth in Sections
2.3 and 2.4, the Initial Closing shall occur on the Initial Closing Date electronically or at such physical location as the parties
shall mutually agree.


 




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2.2         Subsequent
Closings. On each Subsequent Closing Date, upon the terms and subject to the conditions set forth herein, including
but not limited to Section 2.5, the Company agrees to sell, and Seaside agrees to purchase, the Share Amount at the Per Share Purchase
Price as calculated for such Subsequent Closing. On each Subsequent Closing Date, Seaside shall deliver to the Company, via wire
transfer of immediately available funds, the Subscription Amount, and the Company shall deliver to Seaside the Share Amount, for
such Subsequent Closing, subject to Section 2.5, and the Company and Seaside shall deliver the other items set forth in Section
2.3 deliverable at such Subsequent Closing. Upon satisfaction or waiver of the covenants and conditions set forth in Sections 2.3,
2.4 and 2.5, each Subsequent Closing shall occur on the applicable Subsequent Closing Date electronically or at such physical location
as the parties shall mutually agree.


 


2.3         Deliveries.


 


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


 


(i)          solely
on the Initial Closing Date, this Agreement duly executed by the Company;


 


(ii)         solely
on the Initial Closing Date, the opinion of Company Counsel, substantially in the form of Exhibit A hereto;


 


(iii)        an
officer’s certificate of the Company’s Chief Executive Officer or Chief Financial Officer in the form of Exhibit
B attached hereto; and


 


(iv)        a
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis and
in compliance with Section 4.12 hereof, a certificate evidencing the applicable Share Amount purchased by Seaside at such Closing,
registered in the name of Seaside.


 


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


 


(i)          solely
on the Initial Closing Date, this Agreement duly executed by Seaside; and


 


(ii)          the
applicable Subscription Amount by wire transfer to the account as specified in writing by the Company, and in each case less the
amount due Seaside for reimbursement of its expenses pursuant to Section 5.2 hereof.


 




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2.4         Closing Conditions. 


 


(a)           The
obligations of the Company hereunder in connection with each Closing are subject to the satisfaction by Seaside, or waiver by the
Company, of the following conditions:


 


(i)          the
accuracy on the Closing Date of the representations and warranties of Seaside contained herein (provided that representations
and warranties that speak as of a specific date shall continue to be true and correct as of the Closing with respect to such date);


 


(ii)         the
performance or satisfaction by Seaside of all obligations, covenants and agreements required to be performed by Seaside at or prior
to the Closing Date;


 


(iii)        the
delivery by Seaside of the items set forth in Section 2.3(b) of this Agreement; and


 


(iv)        with
respect to any Subsequent Closing, the satisfaction of the conditions set forth in Section 2.5 of this Agreement.


 


(b)           The
obligations of Seaside hereunder in connection with each Closing are subject to the satisfaction by the Company, or waiver by Seaside,
of the following conditions:


 


(i)          the
accuracy on the Closing Date of the representations and warranties of the Company contained herein (provided that representations
and warranties that speak as of a specific date shall continue to be true and correct as of the Closing with respect to such date);


 


(ii)         the
performance or satisfaction by the Company of all obligations, covenants and agreements required to be performed by the Company
at or prior to the Closing Date, including obtaining all Required Approvals;


 


(iii)        the
delivery by the Company of the items set forth in Section 2.3(a) of this Agreement;


 


(iv)        with
respect to any Subsequent Closing, the satisfaction of the conditions set forth in Section 2.5 of this Agreement;


 


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


 


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


 




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2.5         The Floor; Limitation on Purchases;
The Cap.


 


(a)          With
respect to each Subsequent Closing, in the event the Per Share Purchase Price does not equal or exceed the Floor as calculated
with respect to such Subsequent Closing, then such Subsequent Closing will not occur. In each such event, there will be one fewer
Closing pursuant to this Agreement. The failure to have a Subsequent Closing due to failure to meet the Floor will not impact any
other Subsequent Closing.


 


(b)          If,
for any Subsequent Closing, the proposed Subscription Amount to be invested by Seaside at such Subsequent Closing is greater than
two and one-half times the Subscription Amount invested by Seaside at the immediately preceding Closing (the “Dollar Limit”),
then Seaside shall have the option to reduce the number of Shares purchased at such Subsequent Closing such that the amount of
the investment at such Closing is an amount equal to, as near as possible, the applicable Dollar Limit.


 


(c)          In
no event will any Subsequent Closing occur if, as a result of Seaside’s purchase of Shares at such Subsequent Closing, Seaside’s
beneficial ownership of the Common Stock, calculated in accordance with Rule 13d-3 under the Exchange Act as promulgated by the
Commission, will exceed 9.9% of the Company’s outstanding Common Stock immediately after such Subsequent Closing. In the
event the Share Amount for a Subsequent Closing would result in Seaside’s beneficial ownership of the Common Stock, calculated
in accordance with Rule 13d-3, to exceed 9.9% of the Company’s outstanding Common Stock immediately after such Subsequent
Closing, Seaside will purchase only that number of Shares at such Subsequent Closing that will cause its beneficial ownership,
calculated in accordance with Rule 13d-3, to be equal to, as near as possible, 9.9%.


 


(d)          In
no event will any Subsequent Closing occur if, as a result of Seaside’s purchase of the applicable Share Amount at such Subsequent
Closing, Seaside will have purchased an aggregate number of Shares in excess of the Cap. In the event the Share Amount for a Subsequent
Closing would result in Seaside having purchased an aggregate number of Shares in excess of the Cap, Seaside will purchase only
that number of Shares at such Subsequent Closing that will cause its purchase of Shares to be equal to, as near as possible to,
the Cap.


 




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ARTICLE III.


REPRESENTATIONS AND
WARRANTIES


 


3.1         Representations
and Warranties of the Company. Except as set forth under the corresponding section of the disclosure schedules delivered concurrently
herewith, which disclosure schedules shall be deemed a part hereof (the “Disclosure Schedules”), the Company
hereby makes the representations and warranties set forth below as of the date hereof and as of each Closing Date (provided
that representations and warranties that speak as of a specific date shall continue to be true and correct as of such Closing with
respect to such date):


 


(a)          Subsidiaries.
All of the significant subsidiaries (as that term is defined in Rule 1-02 of Regulation S-X promulgated by the Commission) of the
Company are listed in the Company’s most recent Annual Report as filed with the OTC Markets and as modified by any subsequent
OTC Reports filed by the Company (each a “Subsidiary”). The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares
of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights
to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of
them in the Transaction Documents shall be disregarded.


 


(b)          Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in a Material Adverse Effect, and no Action has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 


(c)          Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery
of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby,
including the issuance and sale of the Shares, have been duly authorized by all necessary action on the part of the Company and
no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection therewith
other than in connection with the Required Approvals. Each Transaction Document to which it is a party has been (or upon delivery
will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute
the 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.


 




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(d)          No
Conflicts. The execution, delivery and performance by the Company of the Transaction Documents, the issuance and sale of the
Shares and the consummation by it of the transactions contemplated hereby and thereby to which it is a party do not and will not:
(i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets
of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of
the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to
which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or could not reasonably be expected to have or result in a Material Adverse Effect.


 


(e)          Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings (if any) required pursuant to Section 4.4 of this Agreement, and (ii) the filing of Form D with the Commission and
such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).


 


(f)          Issuance
of the Shares. The Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents.


 




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(g)          Capitalization.
The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include the
number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. Except
as set forth on Schedule 3.1(g), the Company has not issued any capital stock since its most recently filed OTC Report,
other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares
of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or
exercise of Common Stock Equivalents outstanding as of the date of the most recently filed OTC Report. No Person has any right
of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated
by the Transaction Documents. Except as a result of the purchase and sale of the Shares or as set forth on Schedule 3.1(g),
there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and
sale of the Shares will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than
Seaside) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset
price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid
and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Shares. There
are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock
to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.


 


(h)          OTC
Reports; Financial Statements. The Company is currently required to file its reports with OTC Markets and is not currently
a reporting company under the Exchange Act and the rules and regulations of the Commission. The Company maintains a Current Information
status with OTC Markets. The Company has filed all reports, schedules, forms, statements and other documents required to be filed
by OTC Markets and its current Trading Market (the “OTC Reports”) for the two (2) years preceding the date hereof
(or such shorter period as the Company was required by law or regulation to file such material) on a timely basis, or has received
a valid extension of such time of filing and has filed any such OTC Report prior to the expiration of any such extension. As of
their respective dates, the OTC Reports complied in all material respects with the requirements of the Trading Market, and none
of the OTC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements
of the Company included in the OTC Reports comply in all material respects with applicable accounting requirements and the rules
and regulations of the Trading Market with respect thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods
involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects
the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations
and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal and immaterial year-end audit
adjustments.


 




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(i)          Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest financial statements included within
the OTC Reports, except as specifically disclosed in a subsequent OTC Report filed prior to the date hereof or the date of a Subsequent
Closing, as applicable: (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 GAAP or disclosed in filings made with the
Commission or Trading Market, (iii) the Company has not altered its method of accounting except as otherwise required pursuant
to GAAP, (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 stock option and incentive plans
and awards. The Company does not have pending before the Commission any request for confidential treatment of information. Except
for the issuance of the Shares contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact,
circumstance, occurrence or development has occurred or exists, or is reasonably expected to occur or exist, with respect to the
Company or its Subsidiaries or their respective business, properties, operations, assets 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 1 Trading Day prior to the date that this representation is made or deemed made.


 


(j)          Litigation.
There is no action, claim, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign and including,
without limitation, an informal investigation or partial proceeding, such as a deposition) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been,
and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company
or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act.


 




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(k)          Labor
Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. No executive officer, to the knowledge of the Company, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the
continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages
and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.


 


(l)          Compliance.
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 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 judgment, decree, or order of any
court, arbitrator or governmental body or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.


 


(m)          Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as currently conducted, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.


 




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(n)          Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and Liens for the payment
of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which
the Company and the Subsidiaries are in compliance.


 


(o)          Patents
and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights necessary or material for use in connection with their respective businesses and which the failure to
so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and
neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights
has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the
date of this Agreement. Neither the Company nor any Subsidiary has received, within the two (2) year period prior to the date of
this Agreement, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe
upon the rights of any Person, except as would not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.
The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all
of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.


 


(p)          Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount from all Closings.
Neither the Company nor any 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
without a significant increase in cost.


 


(q)          Transactions
With Affiliates and Employees. Except as set forth in Schedule 3.1(q), none of the officers or directors of the Company
and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company
or any Subsidiary (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 entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess
of $120,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred
on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the
Company.


 




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(r)          No
Brokers or Finders. No agent, broker, investment bank or firm is or will be entitled to any broker’s or finder’s
fee, or any commission or similar fee, from Seaside in connection with any of the transactions contemplated by this Agreement or
any other Transaction Document.


 


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


 


(t)          Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not
be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.


 


(u)          Registration
Rights. No Person has any right to cause the Company to effect the registration under the Securities Act of any securities
of the Company.


 


(v)          Listing
and Maintenance Requirements. The Company has not, in the twelve (12) months preceding the date hereof, received notice from
any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.


 


(w)          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 Seaside as a result of Seaside 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 Shares and Seaside’s ownership of the Shares.


 




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(x)          Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided Seaside or its agents or counsel with any information
that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that Seaside
will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished
by or on behalf of the Company to Seaside regarding the Company, its business and the transactions contemplated hereby, including
the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which
they were made, not misleading. The press releases disseminated by the Company during the twelve (12) months preceding the date
of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made and when made, not misleading. The Company acknowledges and agrees that Seaside does not make and has not made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.


 


(y)          No
Integrated Offering. Assuming the accuracy of Seaside’s representations and warranties set forth in Section 3.2, neither
the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the
Shares to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration
of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on
which any of the securities of the Company are listed or designated. 


 


(z)          Solvency.
Except as set forth on Schedule 3.1(z), based on the consolidated financial condition of the Company as of the Closing Date,
after giving effect to the receipt by the Company of the proceeds from the sale of the Shares hereunder: (i) the fair saleable
value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s
existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do
not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to
incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable
on or in respect of its debt). The Company has no knowledge of any facts or circumstances that lead it to believe that it will
file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one (1) year from
the Closing Date. Schedule 3.1(z) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of
the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement,
“Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than
trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required
to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.


 




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(aa)          Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and each Subsidiary (i) has made or filed all United States federal and state income and all
foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material
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 or of any Subsidiary
know of no basis for any such claim.


 


(bb)          No
General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Shares
by any form of general solicitation or general advertising. The Company has offered the Shares for sale only to Seaside.


 


(cc)          Foreign
Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of
the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation
of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.


 


(dd)          Accountants.
The Company’s accounting firm is KLJ & Associates, LLP. To the knowledge and belief of the Company, such accounting firm:
(i) is a registered independent public accounting firm and (ii) shall express its opinion with respect to the financial statements
to be included in the Company’s Annual Report for the year ending December 31, 2014.


 




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(ee)          No
Disagreements with Accountants and Lawyers. 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 current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents.           


 


(ff)           Acknowledgment Regarding Seaside’s Purchase of Shares. The Company acknowledges and agrees that Seaside is acting
solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that Seaside is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given
by Seaside or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to Seaside’s purchase of the Shares. The Company further represents to Seaside that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of
the transactions contemplated hereby by the Company and its representatives.


 


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


 


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


 


(ii)            Office
of Foreign Assets Control. Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee or affiliate
of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”).


 




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(jj)           U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Seaside’s
request.


 


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


 


(ll)          Money
Laundering. The operations of the Company are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.


 


3.2         Representations
and Warranties of Seaside. Seaside hereby makes the representations and warranties set forth below to the Company as of the
date hereof and as of each Closing Date (provided that representations and warranties that speak as of a specific date shall
continue to be true and correct as of such Closing with respect to such date):


 


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


 




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


 


(c)          Experience
of Seaside. Seaside, 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 Shares,
and has so evaluated the merits and risks of such investment. Seaside is able to bear the economic risk of an investment in the
Shares and, at the present time, is able to afford a complete loss of such investment.


 


(d)          Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, Seaside has not directly
or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with Seaside, executed any purchases or
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that Seaside first
received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material
terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Other than to other Persons
party to this Agreement, Seaside has maintained the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability
of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future (subject to
Section 4.10 of this Agreement).


 


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


 




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ARTICLE IV.


OTHER AGREEMENTS OF
THE PARTIES


 


4.1         Transfer
Restrictions; Legends and Legend Removal.


 


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


 


(b)          Seaside
agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Shares in the following form:


 


THIS SECURITY HAS NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER
LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT
OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


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


 




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(c)          Certificates
evidencing the Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof), (i) while a registration
statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Shares pursuant
to Rule 144, (iii) if such Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance
with the current public information required under Rule 144 as to such Shares and without volume or manner-of-sale restrictions,
or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission). From and after six (6) months from the applicable Closing Date for such
Shares, unless Seaside is then an Affiliate of the Company, at such time as Seaside has sold or proposes to sell all or any portion
of the Shares then eligible to be sold pursuant to Rule 144, the Company shall cause its counsel, at no cost to Seaside, to issue
a legal opinion to the Transfer Agent if required by the Transfer Agent to effect the removal of the legend hereunder with respect
to the Shares sold or proposed to be sold. The Company agrees that following the time as such legend is no longer required under
this Section 4.1(c), it will, no later than three (3) Trading Days following the delivery by Seaside to the Company or the Transfer
Agent of a certificate representing Shares issued with a restrictive legend (such third Trading Day, the “Legend Removal
Date”), deliver or cause to be delivered to Seaside a certificate representing such shares that is free from all restrictive
and other legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge
the restrictions on transfer set forth in this Section 4. Certificates for Shares subject to legend removal hereunder shall be
transmitted by the Transfer Agent to Seaside by crediting the account of Seaside’s prime broker with the Depository Trust
Company System as directed by Seaside.


 


(d)          Subject
to the second to last sentence of Section 4.2(a) below, in addition to Seaside’s other available remedies, the Company shall
pay to Seaside, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Shares (valued based on the VWAP
of the Common Stock on the date such Shares are submitted to the Transfer Agent) delivered for removal of the restrictive legend
and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day ten (10) Trading Days after such damages
have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend.
Notwithstanding the foregoing, the Company shall not be responsible for such partial liquidated damages in the event of delays
in processing the issuance of new certificates directly the result of force majeure events not within the Company’s reasonable
control, including but not limited to acts of God or government, war, riots, acts of civil disorder, fire, flood and labor disputes
or in the case of the one-time exemption provided for in the second to last sentence of Section 4.2(a) below. Nothing herein shall
limit Seaside’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Shares
as required by the Transaction Documents, and Seaside shall have the right to pursue all remedies available to it at law or in
equity including, without limitation, a decree of specific performance and/or injunctive relief.


 




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(e)          Seaside
agrees with the Company that Seaside may only sell Shares pursuant to either the registration requirements of the Securities Act,
including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Shares are sold pursuant to a
registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that
the removal of the restrictive legend from certificates representing Shares as set forth in this Section 4.1 is predicated upon
the Company’s reliance upon this understanding.


 


4.2         Covenant
to Become a Reporting Issuer; Furnishing of Information; Public Information.


 


(a)          The
Company covenants and agrees to become a reporting company under the Exchange Act, subject to the reporting requirements of Section
13 or 15(d) thereof, no later than three (3) months following the date of this Agreement, and thereafter to file all reports required
to be filed by a reporting company pursuant to Section 13 or Section 15(d) of the Exchange Act. In the event there is a delay for
any reason in the Company becoming a reporting company under the Exchange Act such that at the six month anniversary of the Initial
Closing Date (the “Trigger Date”), the Company will not have been subject to the reporting requirements of the Exchange
Act for a period of at least ninety (90) days prior to the Trigger Date as required by Rule 144, then the Company shall have an
additional thirty (30) day period following the Trigger Date to gain compliance with the requirements of such Rule and the penalties
set forth in Section 4.1(d) above and clause (c) below of this Section 4.2 shall not be available or payable to Seaside during
such thirty (30) day period. The penalties set forth in Section 4.1(d) above and clause (c) below of this Section 4.2 shall thereafter
be available and payable to Seaside following the expiration of such thirty (30) day period following the Trigger Date.


 


(b)          For
a period of two (2) years from the Initial Closing Date, the Company covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant
to Section 15(d) of the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
As long as Seaside owns Shares, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and
furnish to Seaside and make publicly available in accordance with Rule 144(c) such information as is required for Seaside to sell
the Shares, including without limitation, under Rule 144. The Company further covenants that it will take such further action as
any holder of Shares may reasonably request, to the extent required from time to time to enable such Person to sell such Shares
without registration under the Securities Act, including without limitation, within the requirements of the exemption provided
by Rule 144.


 




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(c)          Subject
to the second to last sentence of clause (a) of this Section 4.2, at any time during the period commencing on the Initial Closing
Date and ending at such time that all of the Shares may be sold without the requirement for the Company to be in compliance with
Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company shall fail for any reason to
satisfy the current public information requirement under Rule 144(c) (a “Public Information Failure”) then,
in addition to Seaside’s other available remedies, the Company shall pay to Seaside, in cash, as liquidated damages and not
as a penalty, for each $1,000 of Shares (valued based on the VWAP of the Common Stock on the date on which Seaside shall first
attempt a sale) sought to be sold by Seaside, $10 per Trading Day (increasing to $20 per Trading Day ten (10) Trading Days after
such damages have begun to accrue) for each Trading Day that the Public Information Failure remains uncured by the Company. The
payments to which Seaside shall be entitled pursuant to this Section 4.2(b) are referred to herein as “Public Information
Failure Payments.”  Public Information Failure Payments shall be paid by the Company to Seaside within five
(5) Business Days of the first occurrence of the Public Information Failure and on or before the last day of each calendar month
thereafter if the Public Information Failure continues beyond the first month.  In the event the Company fails to make Public
Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at
the rate of one and one-half percent (1.5%) per month (prorated for partial months) until paid in full. Nothing herein shall limit
Seaside’s right to pursue actual damages for the Public Information Failure, and Seaside shall have the right to pursue all
remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief.


 


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



 


4.4         Securities
Laws Disclosure; Publicity. If required under applicable securities laws or the rules of the Trading Market, the Company shall
timely file a Current Report on Form 8-K (or its equivalent) and press release disclosing the material terms of the transactions
contemplated hereby, and including the Transaction Documents as exhibits thereto, in each case in a form reasonably acceptable
to Seaside and its counsel. From and after the execution hereof, the Company shall have publicly disclosed all material, non-public
information delivered to Seaside by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees
or agents, in connection with the transactions contemplated by the Transaction Documents. The Company and Seaside shall consult
with each other in issuing or making any other press releases, filings or other statements with respect to the transactions contemplated
hereby, and neither the Company nor Seaside shall issue any such press release nor otherwise make any such filing or statement
without the prior consent of the other party, which consent shall not unreasonably be withheld or delayed.


 


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


 




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4.6         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 neither it, nor any other Person acting on its behalf, will provide Seaside or its agents
or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto Seaside
shall have executed a written agreement with the Company regarding the confidentiality and use of such information. The Company
understands and confirms that Seaside shall be relying on the foregoing covenant in effecting transactions in securities of the
Company.


 


4.7         Use of Proceeds.
The Company shall use the net proceeds from the sale of the Shares hereunder for working capital and general corporate purposes
and shall not use such proceeds for: (a) the satisfaction of any portion of the Company’s debt (other than payment of trade
payables in the ordinary course of the Company’s business consistent with prior practices), (b) the redemption of any Common
Stock or Common Stock Equivalents, (c) the settlement of any outstanding litigation, or (d) in violation of the FCPA or OFAC regulations.


 


4.8         Indemnification
of Seaside. Subject to the provisions of this Section 4.8, the Company will indemnify and hold Seaside, Seaside 88 Advisors,
LLC, and their respective directors, officers, shareholders, members, partners, employees, agents and Affiliates (and any other
Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title),
each Person who controls Seaside (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each,
a “Seaside Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages,
costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any Seaside Party may suffer or incur as a result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action
instituted against Seaside in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who
is not an Affiliate of Seaside, with respect to any of the transactions contemplated by the Transaction Documents (unless such
action is based upon a breach of Seaside’s representations, warranties or covenants under the Transaction Documents or any
agreements or understandings Seaside may have with any such stockholder or any violations by Seaside of state or federal securities
laws or any conduct by Seaside which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall
be brought against any Seaside Party in respect of which indemnity may be sought pursuant to this Agreement, Seaside Party shall
promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to Seaside Party. Any Seaside Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of Seaside Party
except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company
has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in
the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position
of Seaside Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such
separate counsel. The Company will not be liable to any Seaside Party under this Agreement (y) for any settlement by a Seaside
Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to
the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Seaside Party’s breach
of any of the representations, warranties, covenants or agreements made by Seaside Party in this Agreement or in the other Transaction
Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any Seaside Party against the Company or others, and (y) any liabilities
the Company may be subject to pursuant to law.


 




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4.9         Listing of
Common Stock. The Company agrees to use its best efforts to maintain the listing or quotation (as applicable) of the Common
Stock on its current Trading Market and all other Trading Markets on which such Common Stock may hereafter be listed or quoted
(as applicable) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws
or rules of such Trading Market(s). The Company further agrees that, if the Company applies to have the Common Stock traded on
any Trading Market other than its current Trading Market, it will include in such application all of the Shares and will take such
other action as is reasonably necessary to cause all of the Shares to be listed on such other Trading Market.


 


4.10        Certain
Transactions and Confidentiality. Seaside covenants that neither it, nor any Person acting on its behalf or pursuant to any
understanding with it, will execute any purchases or sales, including Short Sales, of any of the Company’s securities during
the period commencing with the execution of this Agreement and ending upon the earlier of the date of termination of this Agreement
or the Final Subsequent Closing Date.  Seaside covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the Form 8-K and/or initial press
release as described in Section 4.4, Seaside will maintain the confidentiality of the existence and terms of this transaction and
the information included in the Transaction Documents and the Disclosure Schedules.  Notwithstanding
the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) Seaside makes no representation, warranty or covenant hereby that it will
not engage in effecting transactions in any securities of the Company after the time end of the period contemplated by this Section
4.10, (ii) Seaside shall not be restricted or prohibited from effecting any transactions
in any securities of the Company in accordance with applicable securities laws from and after the period contemplated by this Section
4.10, and (iii) Seaside shall have no duty of confidentiality to the Company or its Subsidiaries
after the period contemplated by this Section 4.10, provided, that Seaside will not
engage in any Short Sales while it holds any of the Shares.  


 


4.11        Form D;
Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Shares as required under Regulation D and
to provide a copy thereof in advance of such filing to Seaside. The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the Shares for, sale to Seaside at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions
promptly upon request of Seaside.


 




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4.12       Delivery
of Shares After Closing. The Company shall deliver, or cause to be delivered, to Seaside a certificate representing the applicable
Share Amount purchased by Seaside at each Closing within three (3) Trading Days of the applicable Closing Date.


 


4.13       Piggyback
Registration Rights. If, at any time after the Initial Closing Date, the Company shall propose to file with the Commission
a registration statement under the Securities Act (other than on Forms S-4 or S-8 or any successor to such forms), the Company
shall give notice to Seaside and include in such registration statement all or any part of the Shares that Seaside requests to
be registered; provided, however, that the Company shall not be required to register any Shares pursuant to this
Section 4.13 that are eligible for resale pursuant to Rule 144 under the Securities Act without any requirement for the Company
to maintain current public information and without any limitation on volume or manner of sale. The Company shall use best efforts
to cause such registration statement to become effective as soon as practicable.


 


ARTICLE V.


MISCELLANEOUS


 


5.1         Termination.  This Agreement
may be terminated:


 


(a)          by
Seaside, upon written notice to the Company, if the Initial Closing has not been consummated on or before May 30, 2014;
or


 


(b)          by
Seaside, immediately upon written notice to the Company, if the Company has not become a reporting company under, and filed all
reports required to be filed by a reporting company pursuant to, Section 13 or Section 15(d) of the Exchange Act in accordance
with Section 4.2(a) hereof; or


 


(c)          by
the Company, upon written notice to Seaside, at any time following the Initial Closing;


 


provided, however, that no
such termination pursuant to this Section 5.1 will affect the right of any party to sue for any breach by the other party (or parties).


 


5.2         Fees and
Expenses. Except as otherwise set forth in this Agreement and as set forth in this Section 5.2 below, each party shall pay
the fees and expenses of its own 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
stamp and other taxes and duties levied in connection with the delivery of the Shares. Notwithstanding the foregoing, the Company
shall reimburse Seaside for the fees and expenses of its counsel, White White & Van Etten PC, in an amount equal to (a) $7,500
at the Initial Closing and (b) $2,500 at every Subsequent Closing. Such legal fees may be withheld by Seaside from the Subscription
Amount to be paid for the Shares at such Closings.


 




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


 


5.4          Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via electronic mail or facsimile at the electronic mail address or facsimile number set forth on the signature pages attached hereto
prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice
or communication is delivered via electronic mail or facsimile at the electronic mail address or facsimile number set forth on
the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto or as otherwise provided by written notice delivered
in compliance with this Section 5.4 by the addressee to the other party.


 


5.5          Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and Seaside or, in the case of a waiver, by the party against whom enforcement of any
such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair
the exercise of any such right.


 


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


 


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


 


5.8          No Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth
in Section 4.8.


 




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5.9          Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action, suit or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such Action, suit or proceeding is improper
or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents
to process being served in any such Action, suit or proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an Action,
suit or proceeding to enforce any provisions of the Transaction Documents, then in addition to the obligations of the Company under
Section 4.8, the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action, suit or proceeding.


 


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


 


5.11        Execution.
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.


 


5.12        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.


 




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


 


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


 


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


 


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


 


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


 


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


 




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


 


(Signature Pages Follow)


 




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


 


	Axxess Pharma, Inc.	 	Address for Notice:
	 	 	 
	By:	 	 	2681 Eglinton Ave West
	 	Name:	 	Toronto, Ontario M6M IT8
	 	Title:	 	Canada
	 	 	Attention:  Daniel Bagi, M.D.
	 	 	Fax:
	 	 	Email: danielb@axxesspharmainc.com
	 	 	 
	With a copy (which shall not constitute notice) to:	 	Szaferman Lakind Blumstein & Blader, PC 
	 	 	101 Grovers Mill Road
	 	 	Second Floor
	 	 	Lawrenceville, NJ 08648
	 	 	Attention: Gregg E. Jaclin, Esq.
	 	 	Fax: 609-557-0964
	 	 	Email: GJaclin@szaferman.com


 


	Seaside 88, LP	 	Address for Notice:
	 	 	 
	By:  Seaside 88 Advisors, LLC	 	 
	 	 	750 Ocean Royale Way
	 	 	Suite 1101
	By:	 	 	Juno Beach, FL 33408
	 	Name: William J. Ritger	 	Attention:  William J. Ritger and
	 	Title:   Manager	 	Denis M. O’Donnell, M.D.
	 	 	Fax:  866-358-6721
	 	 	Email:  wjr@seaside88.com
	 	 	dod@seaside88.com 
	 	 	 
	With a copy (which shall not constitute notice) to:	 	White White & Van Etten PC
	 	 	45 School Street
	 	 	Boston, MA 02108
	 	 	Attention:  David A. White, Esq.
	 	 	Fax:  617-225-0205
	 	 	Email:  daw@wwvlaw.com


 




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Exhibit A


 


1.          The Company is
a corporation duly organized under the general corporate law of the State of Nevada, with corporate power and authority to enter
into the Agreement and the other Transaction Documents and perform its obligations thereunder. The Company is validly existing
and in good standing under the laws of the State of Nevada and is qualified to do business and in good standing under the laws
of ____________ and _________, the only states where the failure to be so qualified and in good standing could have a Material
Adverse Effect.


 


2.          The execution
and delivery of the Agreement and the other Transaction Documents and the issuance and sale of the Shares thereunder has been duly
authorized by all necessary corporate action of the Company, no further action is required by the Company or its stockholders in
connection therewith; and the Agreement and each other Transaction Document has been duly executed and delivered by the Company
and is enforceable against the Company in accordance with its terms.


 


3.          The Shares have
been duly authorized and, when issued and delivered in accordance with the terms of the Agreement, will be validly issued, fully
paid and non-assessable, and the issuance of such Shares will not be subject to any preemptive or similar rights set forth in the
Company’s Certificate of Incorporation or Bylaws (or similar organizational documents) or any agreement known to us or filed
as an exhibit to any OTC Report.


 


4.          The execution
and delivery by the Company of, and the performance by the Company of its obligations under, the Agreement (including the issuance
and sale of the Shares) and the other Transaction Documents will not contravene any provision of any statute, law, rule or regulation
applicable to the Company, any agreement filed as an exhibit to any OTC Report, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company that is applicable to the Company or its properties.


 


5.          No consent, approval,
authorization, order, registration or qualification of or with any court or arbitrator or governmental body, regulatory authority
or Trading Market is required for the execution, delivery and performance by the Company of its obligations under the Agreement
or any other Transaction Document, other than any notice filings as are required to be made after the Closing Date under applicable
federal and state securities laws.


 


6.          The Company is
not, and will not be after consummation of the Agreement, the sale of the Shares to Seaside and the application of the proceeds
thereof, an “investment company” as defined in the Investment Company Act of 1940, as amended.


 




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Exhibit B


 


Officer’s Certificate


 


In connection with
a Closing on the date set forth below pursuant to that certain Securities Purchase Agreement dated as of May __, 2014 (the “Agreement”)
by and between Axxess Pharma, Inc., a Nevada corporation (the “Company”) and Seaside 88, LP, a Florida limited partnership
(“Seaside”), the undersigned, the duly elected and qualified ________________ of the Company, does hereby certify to
Seaside as follows:


 


		(i)	all representations and warranties of the Company contained in the Agreement are true and correct
on and as of the date hereof as if made on and as of the date hereof (provided that representations and warranties that
speak as of a specific date shall continue to be true and correct as of the Closing with respect to such date); and



 


		(ii)	the Company has performed or complied with all of its covenants and agreements contained in the
Agreement and required to be performed or complied with by the Company on or before the date hereof.



 


Capitalized terms used
but not defined herein shall have the meanings given to them in the Agreement.


 


IN WITNESS WHEREOF,
the undersigned has caused this Officer’s Certificate to be executed this _____ day of _____________, 20__.


 


	 	 	Axxess Pharma, Inc.
	 	 	 
	 	 	By:	 
	 	 	 	Name:
	 	 	 	Title:


 




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