Exhibit 10.11


 


SECURITIES PURCHASE AGREEMENT



BY AND AMONG




NXT-ID, INC.



AND



THE PURCHASERS PARTY HERETO


 







    	 



    	 



    

 






Schedules and
Exhibits

TO 


Securities PURCHASE
AGREEMENT


 





	Schedule 3.2	Subsidiaries
	Schedule 3.3.2	Capitalization Matters
	Schedule 3.4	Authorization; Binding Obligation
	Schedule 3.6	Absence of Liabilities
	Schedule 3.8	Changes
	Schedule 3.9	Title to Properties and Assets; Liens
	Schedule 3.10.1	Owned Intellectual Property and Licensed Intellectual Property
	 	 
	Exhibit A	Schedule of Purchasers
	Exhibit B	Form of Warrant
	Exhibit C	Form of Registration Rights Agreement




   






    	2



    	 



    

 





NXT-ID, INC.


 


SECURITIES PURCHASE
AGREEMENT


 


THIS SECURITIES PURCHASE
AGREEMENT (the “Agreement”) is entered into as of the date set forth on the signature page hereto by
and among Nxt-ID, Inc., a Delaware corporation (the “Company”) and the purchasers identified on Exhibit
A on the date hereof (which purchasers are hereinafter collectively referred to as the “Purchasers”
and each individually as, a “Purchaser”).


 


BACKGROUND


 


A.Unless otherwise defined
in this Agreement, capitalized terms used in this Agreement shall have the respective meanings ascribed to such terms in Section
8.


 


B.The Company is offering
(the “Offering”) restricted warrants (the “Warrants”) (the Warrants and the
shares of common stock underlying the warrants, collectively referred to herein as the “Securities”)
to a holders of those certain warrants purchased pursuant to that certain Confidential Private Placement Memorandum, dated December
26, 2013, as supplemented (collectively, the “Memorandum”) who qualify as “accredited investors”
as defined in Rule 501 of Regulation D promulgated under the Securities Act at a purchase price for the Warrants as described below.


  


C.The
Securities are being offered on a “best efforts” basis to existing warrant holders.


  


D.The purchase price
of the Warrants shall be $0.01 (the “Purchase Price”). The Warrants shall have a five (5) year life with
a strike price equal to the $3.00 (the “Exercise Price”), which may be exercised cashless if the underlying
shares are not registered after nine (9) months from final Closing (“closing” is defined below).


  


E.The Company desires
to issue and sell the Securities to each Purchaser in one or more closings (each a “Closing” and collectively
the “Closings”) as set forth herein.


 


NOW, THEREFORE, in consideration
of the representations, warranties, covenants and agreements herein contained and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:


 


1.AGREEMENT
TO SELL AND PURCHASE.


 


1.1Authorization of
Securities. The Board of Directors of the Company has authorized (i) the sale of up to one hundred Warrants (on a pro-rated
basis); and (ii) the reservation of 100,000 restricted common shares to be issued upon exercise of the Warrants (the “Warrant
Shares”).


 


1.2Initial Sale and
Purchase of Securities. Subject to the terms and conditions hereof, and in reliance upon the representations, warranties and
covenants contained herein, at the Initial Closing, the Company shall issue and sell to each Purchaser, and each Purchaser shall
purchase from the Company, the number of Securities set forth opposite such Purchaser’s name on Exhibit A under the
“Initial Securities” column.


 


1.3Issuance of Warrants.
The Warrant shall be in form and substance substantially the same as the form of Warrant in Exhibit B.


 






    	3



    	 



    

 


2.CLOSINGS,
DELIVERY AND PAYMENT.


 


2.1Initial Closing.
Subject to the conditions set forth in Section 5 herein, the initial closing of the sale and purchase of the Securities (the “Initial
Closing”), shall take place electronically on such date and at such time as is agreed between the Company and
the Placement Agent (such date the “Initial Closing Date”), in no event later than June 13, 2014 (the
“Termination Date”).


 


2.2Subsequent Closings.
Subject to the conditions set forth in Section 5, each Subsequent Closing shall take place electronically on such date and at such
time as is agreed between the Company and the Placement Agent (such date the “Subsequent Closing Date”),
in no event later than June 17, 2014 (the “Final Termination Date”). The
Securities sold at the Subsequent Closings are sometimes referred to herein as “Subsequent Securities.”


 


2.3Delivery;
Payment. At each Closing, subject to the terms and conditions hereof, the Purchasers will deliver the full amount of the Purchase
Price in cash by wire transfer of immediately available funds in accordance with instructions provided to each purchaser, or as
the Company shall otherwise direct and the Company will deliver instructions to its transfer agent authorizing the issuance of
the Warrant included in the Securities purchased by such Purchaser or Subsequent Closing Purchaser, as the case may be, at such
Closing and each registered in such Purchaser’s name to purchase such number of Warrant Shares included in the Warrants
purchased by such Purchaser or Subsequent Closing Purchaser, as the case may be, at such Closing. Within five (5) business days
following any Closing the Company will deliver, unless otherwise requested by any Purchaser, one (1) certificate registered in
such Purchaser’s name representing the Securities purchased by such Purchaser at such Closing and the Warrants included
in the Securities purchased by such Purchaser at such Closing. The Company and the Placement Agent, in their mutual discretion,
may allow a Purchaser to purchase partial Securities, in which case the Purchaser shall receive a certificate representing the
appropriate number of Warrants for the appropriate number of Warrant Shares.


 


3.REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.


 


The Company represents and
warrants to each of the Purchasers that the statements made in this Section 3, except as qualified in the disclosure schedules
referenced herein and attached hereto (the “Schedules”), are true and correct on the date hereof, as
of the Initial Closing and shall be true and correct as of each Subsequent Closing, except as qualified by any updated Schedules
delivered at the Subsequent Closing in accordance with Section 5.1.1 herein, all of which qualifications in the Schedules attached
hereto and updated Schedules delivered at the Subsequent Closing shall be deemed to be representations and warranties as if made
hereunder. The Schedules shall be arranged to correspond to the numbered paragraphs contained in this Section 3. For the avoidance
of doubt, information disclosed in one section of the Schedule shall not be deemed disclosed in any other section of the Schedule
unless there is an explicit cross reference to such other section. For purposes of this Section 3, “knowledge” shall
mean the personal knowledge of any of the Company’s officers or directors or what they would have known upon having made
reasonable inquiry.


 


3.1Organization, Good
Standing 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 nor 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: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “Material Adverse Effect”) and, no Proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 






    	4



    	 



    

 


3.2Subsidiaries.
Schedule 3.2 contains a true and complete list of each of the Company’s Subsidiaries and their respective jurisdictions
of organization. Except as set forth on Schedule 3.2, no entity owns or controls any ownership interest or profits interest
in any other corporation, limited liability company, limited partnership or other entity. The Company owns and controls as to all
matters 100% of the outstanding ownership and profits interests in each Subsidiary listed on Schedule 3.2. Except as set
forth on Schedule 3.2, no entity is a participant in any joint venture, partnership or similar arrangement.


 


3.3Capitalization
Matters.


 





3.3.1.Immediately
prior to the Initial Closing and any Subsequent Closing, if and as applicable, the total authorized capital stock of the Company,
consists of: (a) 100,000,000 shares of common stock; and (b) 10,000,000 shares of preferred stock, of which none are issued and
outstanding.


  


3.3.2.Immediately
prior to the Initial Closing and any Subsequent Closing, if and as applicable, the authorized, issued and outstanding capital stock
of the Company is, as set forth on Schedule 3.3.2 and all issued and outstanding shares of capital stock of the Company
(a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were, in all material respects,
issued in compliance with all applicable state and federal laws concerning the issuance of securities. Except as set forth on Schedule
3.3.2, (i) there are no outstanding securities of the Company which contain any preemptive, redemption or similar provisions,
nor is any holder of securities of the Company entitled to preemptive or similar rights arising out of any agreement or understanding
with the Company by virtue of any of the Transaction Documents, and there are no contracts, commitments, understandings or arrangements
by which the Company is or may become bound to redeem a Securities of the Company (ii) the Company does not have any stock appreciation
rights or "phantom stock" plans or agreements or any similar plan or agreement; and (iii) except as set forth on Schedule
3.3.2, there are no outstanding options, warrants, agreements, convertible securities, preemptive rights or other rights to
subscribe for or to purchase or acquire, any shares of capital stock of the Company or contracts, commitments, understandings,
or arrangements by which the Company is or may become bound to issue any shares of capital stock of the Company, or securities
or rights convertible or exchangeable into shares of capital stock of the Company. Except as required by law, including any federal
securities rules and regulations, there are no restrictions upon the voting or transfer of any of the shares of capital stock of
the Company pursuant to its Organizational Documents or other governing documents or any agreement or other instruments to which
the Company is a party or by which it is bound. The issuance and sale of the Securities as contemplated hereby will not obligate
the Company to issue shares of common stock or other securities to any other person (other than the Purchaser) and will not result
in the adjustment of the exercise, conversion, exchange or reset price of any outstanding Securities. There are no proxies, stockholder
agreements, or any other agreements between the Company and any securityholder of the Company or, to the knowledge of the Company,
among any securityholders of the Company, including agreements relating to the voting, transfer, redemption or repurchase of any
securities of the Company. The Company does not have any outstanding shareholder purchase rights or “poison pill” or
any similar arrangement in effect giving any person the right to purchase any equity interest in the Company upon the occurrence
of certain events.


 






    	5



    	 



    

 





3.3.3.The
Warrants 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 Encumbrances other than restrictions on transfer provided
for in the Transaction Documents. The Warrant Shares, when issued and paid for in accordance with the terms of the Warrants, will
be validly issued, fully paid and nonassessable, free and clear of all Encumbrances imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents. The Company has reserved a sufficient number of shares for issuance of the
Warrant Shares, free and clear of all Encumbrances, except for restrictions on transfer set forth in the Transaction Documents
or imposed by applicable securities laws.


 


3.4Authorization;
Binding Obligations. All actions by or on behalf of the Company necessary for the authorization of this Agreement and the other
Transaction Documents, the performance of all obligations of the Company hereunder and thereunder at each Closing and the authorization,
sale, issuance and delivery of the Securities pursuant hereto have been taken. This Agreement (assuming due execution and delivery
by the Purchasers) and the other Transaction Documents (assuming due execution and delivery by all other parties thereto), when
executed and delivered, will be valid and binding obligations of the Company and enforceable against it in each case in accordance
with its respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application affecting enforcement of creditors’ rights, (b) general principles of equity that restrict the availability
of equitable remedies, and (c) to the extent that the enforceability of the indemnification provisions of Section 6.16 may be limited
by applicable law. Except as set forth on Schedule 3.4, the execution, delivery and performance of, and the consummation
of the transactions contemplated by, this Agreement and the other Transaction Documents, including without limitation the sale,
issuance and delivery of the Securities, have not resulted and will not result in (x) any violation of, or default under, or conflict
with, or constitute, with or without the passage of time or the giving of notice or both, any violation of, or default under, or
give rise to any right of termination, cancellation or acceleration under (i) any term or provision of (A) the Organizational Documents
of the Company, (B) any Contract, agreement, instrument, arrangement or understanding of the Company, or (C) any Order to
which the Company is a party or by which any of them or any of their respective properties or assets are bound or (ii) any Requirement
of Law applicable to the Company or any of their respective properties or assets or (y) the creation of any Encumbrance upon any
of the properties or assets of the Company.


 


3.5Early Stage Company
Status; SEC Reports; Financial Statements. The Company was incorporated on February 8, 2012. The Company has filed all reports
required to be filed by it under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
in accordance with Section 13 thereof, since it became a publicly reporting company (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein being collectively referred to herein as the “SEC Reports”)
on a timely basis or has timely filed a valid extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none
of the SEC 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 light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the SEC Reports (the “Financial Statements”)
comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC 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 (“GAAP”) applied on a consistent basis during the periods involved, except
as may be otherwise specified in such financial statements or the footnotes thereto, and fairly present in all material respects
the financial position of the Company 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, immaterial, year-end audit adjustments. There is no transaction,
arrangement, or other relationship between the Company and an unconsolidated or other off balance sheet entity that is not disclosed
in its financial statements that should be disclosed in accordance with GAAP and that would be reasonably likely to have a Material
Adverse Effect.


 






    	6



    	 



    

 


3.6Absence of Liabilities.
Except as set forth on Schedule 3.6, the Company does not have any Liabilities that are not reflected or disclosed in the
audited financial statements of the Company for the year ended December 31, 2012 or the unaudited financial statements of the Company
for the quarter ended September 30, 2013. The Company is not a guarantor or indemnitor of any Liability of any other Person. Except
for operating leases for personal or real property entered into in the ordinary course of business which do not require payments
of more than $50,000 in the aggregate during any fiscal year, the Company has not issued any instruments, entered into any agreements,
commitments or arrangements or incurred any obligations that would have, or would reasonably be expected to have, the effect of
providing the Company with “off balance sheet” financing.


 


3.7Compliance with
Laws. The Company is not in violation of, or in default under, any Requirement of Law applicable to the Company, or any Order
issued or pending against the Company or by which the Company or any of the Company’s  
properties are bound, except for such violations or defaults that have not had, and could not reasonably be expected to have, a
Material Adverse Effect.


 


3.8Changes. Except
as set forth on Schedule 3.8, since September 30, 2013 there has not been:


 


3.8.1.any
effect, event, condition or circumstance (including, without limitation, the initiation of any litigation or other legal, regulatory
or investigative proceeding) against the Company that individually or in the aggregate, with or without the passage of time, the
giving of notice, or both, has had or could reasonably be expected to have a Material Adverse Effect;


 


3.8.2.any
resignation or termination of any director, officer or key employee of the Company, and the Company has not received notification
of any impending resignation from any such Person;


 


3.8.3.any
material change in the contingent obligations of the Company by way of guaranty, endorsement, indemnity, warranty or otherwise;


 


3.8.4.any
material damage, destruction or loss adversely affecting the assets, properties, business, financial condition or prospects of
the Company, whether or not covered by insurance;


 


3.8.5.any
development, event, change, condition or circumstance that constitutes, whether with or without the passage o time or the giving
of notice or both, a default under the Company’s outstanding debt obligation; or


 






    	7



    	 



    

 


3.8.6.any
change in any compensation arrangement or agreement with any employee, consultant, officer, director or stockholder of the Company
that would increase the cost of any such agreement or arrangement to the Company by more than $10,000 in each instance;


 


3.8.7.any
labor organization activity of the employees of the Company;


 


3.8.8.any
declaration or payment of any dividend or other distribution of the assets of the Company;


 


3.8.9.any
change in the accounting methods or practices followed by the Company; or


 


3.8.10.any
Contract or commitment made by the Company to do any of the foregoing.


 


3.9Title to Properties
and Assets; Liens, etc. Except as set forth on Schedule 3.9, the Company has good and marketable title to the properties
and assets it owns, and the Company has a valid license in all properties and assets licensed by it, including the properties and
assets reflected as owned in the most recent balance sheet included in the Financial Statements, and has a valid leasehold interest
in its leasehold estates. All facilities, machinery, equipment, fixtures, vehicles and other properties owned, leased or used by
the Company are in good operating condition and repair, ordinary wear and tear excepted and are fit and usable for the purposes
for which they are being used. Except as set forth on Schedule 3.9, the Company is in compliance with all terms of each
lease to which it is a party or is otherwise bound.


 


3.10Intellectual Property.


 


3.10.1.All registrations and applications for registration of all Owned Intellectual Property and all Licensed Intellectual Property
(collectively, the “Company Intellectual Property ”) and applications in process for the Owned Intellectual Property
and the Licensed Intellectual Property are identified, on Schedule 3.10.1, identifying with respect to each such item of Company
Intellectual Property , (a) the owner(s) thereof, (b) the jurisdiction(s) of registration, (c) the applicable registration
or serial number, if any, (d) the date of expiration, if any, and (e) in the case of Licensed Intellectual Property, whether
the Company’s rights with respect thereto are exclusive. Except as set forth on Schedule 3.10.1 and identified as such,
the Company has not licensed any Intellectual Property to or from any Person. All of the registrations and applications for
registration of the Company Intellectual Property are valid, subsisting and in full force and effect, and all actions and
payments necessary for the maintenance and continuation of such Company Intellectual Property have been taken or paid. The
Company owns or possesses sufficient legal rights to use all of the Company Intellectual Property and the exclusive right
to use all Owned Intellectual Property and all Licensed Intellectual Property which is identified in Schedule 3.10.1 as being
exclusively licensed to the Company.


 


3.10.2.To
the knowledge of the Company, the business as currently conducted and as proposed to be conducted by the Company has not and will
not constitute any infringement of the Intellectual Property rights of any other Person. To the knowledge of the Company, the development
of Product candidates and the use, manufacture or sale of the Company’s Products based on the Company Intellectual Property
does not, and will not, infringe the Intellectual Property rights of any third Person. To the knowledge of the Company, no employee
or agents of the Company has misappropriated the Intellectual Property rights of any Person.


 






    	8



    	 



    

 


3.10.3.There
are no outstanding options or other rights to acquire any Company Intellectual Property. To the knowledge of the Company, each
licensor of the Licensed Intellectual Property is the sole and exclusive owner of such Licensed Intellectual Property and has the
sole and exclusive right and authority to grant licenses to such Licensed Intellectual Property.


 


3.10.4.The
Company has not received any communications alleging or suggesting that it has violated or, by conducting its business as currently
conducted or proposed to be conducted, would infringe or misappropriate any of the Intellectual Property rights of any other Person.


 


3.10.5.It
is not necessary to the business of the Company, as currently conducted or as proposed to be conducted, to utilize any inventions,
trade secrets or proprietary information of any of its employees, agents, developers, consultants or contractors made prior to
their employment by or service to the Company, except for inventions, trade secrets or proprietary information that have been assigned
or licensed to the Company.


  


3.10.6.Since
the date of the Company’s incorporation, there has not been any sale, assignment or transfer of any Company Intellectual
Property or other intangible assets of the Company.







 


3.10.7.No
Company Intellectual Property is subject to any interference, reissue, reexamination, opposition or cancellation proceeding or
any other Legal Proceeding or subject to or otherwise bound by any outstanding Order or Contract (other than in the case of any
Licensed Intellectual Property, the Contract pursuant to which the Company licenses the rights to such Licensed Intellectual Property)
that restricts in any manner the use, transfer or licensing thereof by the Company or may affect the validity, use or enforceability
of such Company Intellectual Property . The Company does not have any knowledge of any fact or circumstance that would render any
portion of the Company Intellectual Property invalid or unenforceable.


  


3.10.8. Each current and former officer, employee, agent, developer, consultant and contractor who (a) has had or has access to any
Company Intellectual Property has executed a confidentiality and nondisclosure agreement that protects the confidentiality
of the trade secrets of the Company Intellectual Property; and (b) contributed to or participated in the creation and/or development
of the Company Intellectual Property either: (i) is a party to a “work made for hire” agreement under which the
Company is deemed to be the original owner/author of all right, title and interest in the Intellectual Property created or
developed by such Person; or (ii) has executed an assignment or an agreement to assign in favor of the Company of all such
Person’s right, title and interest in the Intellectual Property. The Company has the right to: (a) bring actions for
past, present and future infringement, dilution, misappropriation or unauthorized use of the Company Intellectual Property
owned or licensed by the Company, injury to goodwill associated with the use of the Company Intellectual Property, unfair
competition or trade practices violations of and other violation of the Company Intellectual Property; and (b) with respect
to the Company Intellectual Property owned exclusively by the Company, receive all proceeds from the foregoing set forth in
subsection (a) hereof, including, without limitation, licenses, royalties income, payments, claims, damages and proceeds of
suit.


 






    	9



    	 



    

 





3.10.9.The
execution and delivery of this Agreement and the other Transaction Documents and consummation of the transactions contemplated
hereby and thereby will not result in the breach of, or create on behalf of any third party the right to terminate or modify, any
license, sublicense, agreement or permission: (a) relating to or affecting any Company Intellectual Property; or (b) pursuant to
which the Company is granted a license or otherwise authorized to use any third party Intellectual Property.


 


3.10.10.
To the knowledge of the Company, no Person is infringing, violating, misappropriating or making unauthorized use of any of the
Company Intellectual Property. 


 


3.11Compliance with
Other Instruments. Except as set forth on Schedule 3.11, the Company is not in violation or default of any term of its
Organizational Documents or its Bylaws, respectively (in each case, as amended to date), or of any provision of any Contract to
which it is party or by which it is bound or of any Order applicable to the Company, except for violations or defaults of any Contract,
which individually or in the aggregate has not had, or would not reasonably be expected to have, a Material Adverse Effect.


 


3.12Litigation.
There is no Legal Proceeding pending or, to the knowledge of the Company, threatened against the Company or any investigation of
the Company, nor is the Company aware of any fact that would make any of the foregoing reasonably likely to arise. The Company
is not a party or subject to the provisions of any Order. There is no Legal Proceeding by the Company currently pending or that
the Company intends to initiate.


 


3.13Tax Returns and
Payments.


 


3.13.1.Except
as set forth on Schedule 3.13.1, the Company has filed all Tax Returns required to be filed by it, and the Company has timely
paid all Taxes owed (whether or not shown on any Tax Return). All such Tax Returns were complete and correct, and such Tax Returns
correctly reflected the facts regarding the income, business, assets, operations, activities, status and other matters of the Company
and any other information required to be shown thereon. The Company has withheld and paid all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any Employee, creditor, independent contractor, shareholder, member or other
third party. The Company has established adequate reserves for all Taxes accrued but not yet payable. The Company has not been
audited by nor have issues been raised or adjustments made or proposed by any tax authority in connection with any such Taxes or
Tax Returns. No deficiency assessment with respect to or proposed adjustment of the Company’s Taxes is pending or, to the
knowledge of the Company, threatened. There is no tax lien (other than for current Taxes not yet due and payable), imposed by any
taxing authority, outstanding against the assets, properties or the business of the Company.


 


3.13.2.The
Company has not agreed to make any adjustment under Section 481(a) of the Internal Revenue Code of 1986, as amended (the “Code”)
(or any corresponding provision of state, local or foreign tax law) by reason of a change in accounting method or otherwise, and
the Company will not be required to make any such adjustment as a result of the transactions contemplated by this Agreement. The
Company has not been nor is a party to any tax sharing or similar agreement. The Company is not nor has ever been a party to any
joint venture, partnership, limited liability company, or other arrangement or Contract which could be treated as a partnership
for federal income tax purposes. The Company is not nor has ever been a “United States real property holding corporation”
as that term is defined in Section 897 of the Code.


 






    	10



    	 



    

 


3.14Employees.


 


3.14.1.All
of the employees of the Company (the “Employees”) are identified, by the Company, on Schedule 3.14.1.
Except as set forth on Schedule 3.14.1, (a) The Company has not, nor has ever had any, collective bargaining agreements
with any of its employees; (b) there is no labor union organizing activity pending or, to the knowledge of the Company, threatened
with respect to the Company; (c) no employee has or is subject to any agreement or Contract to which the Company is a party (including,
without limitation, licenses, covenants or commitments of any nature) regarding his or her employment or engagement; (d) to the
best of the Company’s knowledge, no employee is subject to any Order that would interfere with his or her duties to the Company
or that would conflict with the Company’s businesses as currently conducted and as proposed to be conducted; (e) no employee
is in violation of any term of any employment contract, proprietary information agreement or any other agreement relating to the
right of any such Person to be employed by, or to contract with, the Company; (f) to the best of the Company’s knowledge,
the continued employment by the Company of its present employees, and the performance of their respective duties to the Company,
will not result in any violation of any term of any employment contract, proprietary information agreement or any other agreement
relating to the right of any such individual to be employed by, or to contract with, the Company, and the Company has not received
any written notice alleging that such violation has occurred; (g) no Employee or consultant has been granted the right to continued
employment by or service to the Company or to any compensation following termination of employment with or service to the Company;
and (h) the Company does not have any present intention to terminate the employment or engagement or service of any officer or
any significant employee or consultant


 


3.14.2.There
are no outstanding or, to the knowledge of the Company, threatened claims against the Company or any Affiliate (whether under federal
or state law, under any employment agreement, or otherwise) asserted by any present or former employee or consultant of the Company.
The Company is not in violation of any law or Requirement of Law concerning immigration or the employment of persons other than
U.S. citizens.


 


3.15Pension and Other
Employee Benefit Plans.


 


3.15.1.Schedule
3.15.1 sets forth all of the plans, funds, policies, programs and arrangements sponsored or maintained by the Company on behalf
of any employee or former employee of the Company (or any dependent or beneficiary of any such Employee or former employee) with
respect to (a) deferred compensation or retirement benefits; (b) severance or separation from service benefits (other than those
required by law); (c) incentive, performance, stock, share appreciation or bonus awards; (d) health care benefits; (e) disability
income or wage continuation benefits; (f) supplemental unemployment benefits; (g) life insurance, death or survivor’s benefits;
(h) accrued sick pay or vacation pay; or (i) any other material benefit offered under any arrangement constituting an “employee
benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Securities Act of 1974, as amended (“ERISA”)
and not excepted by Section 4 of ERISA (the foregoing being collectively called “Employee Benefit Plans”).
Schedule 3.15.1 sets forth all such Employee Benefit Plans subject to the provisions of Section 412 of the Code as well
as any “multi-employer plans” within the meaning of Section 3(37) of ERISA or Section 4001(a)(3) of ERISA. The transactions
contemplated by this Agreement will not result in any payment or series of payments by the Purchasers or the Company of an “excess
parachute payment” within the meaning of Section 280G of the Code or any other severance, bonus or other payment on account
of such transactions. None of the Employee Benefit Plans is under investigation or audit by the United States Department of Labor,
the Internal Revenue Service or any other Governmental or Regulatory Authority.


 






    	11



    	 



    

 


3.15.2.The
Company has complied with its obligations under all applicable Requirements of Law including, without limitation, of ERISA and
the Code with respect to such Employee Benefit Plans and all other arrangements that provide compensation or benefits to any Employee
and the terms thereof, whether or not such person is directly employed by the Company and there are no pending or, to the knowledge
of the Company, threatened actions or claims for benefits by any Employee, other than routine claims for benefits in the ordinary
course of business. No Employee Benefit Plan provides any benefits to any former employees.


 


3.15.3.All
Employee Benefit Plans that are intended to meet the requirements of Section 401(a) of the Code have been determined by the Internal
Revenue Service to meet such requirements and have at all times operated in compliance with such requirements.


 


3.15.4.All
employment Taxes, premiums for employee benefits provided through insurance, contributions to Employee Benefit Plans, and all other
compensation and benefits to which employees are entitled, have been timely paid or provided as applicable, and there is no liability
for any such payments, contributions or premiums.


 





3.16Real Property.
The Company does not have any interest in any real estate, except that the Company leases the properties described on Schedule
3.16 (the “Leased Real Property”). The Leased Real Property is adequate for the operations of the
Company’s businesses as currently conducted and as contemplated to be conducted. True and complete copies of the lease agreements
(the “Real Property Leases”) pertaining to the Leased Real Property have been delivered or made available
to the Purchasers. The Company has paid all amounts due from it, and is not in default under any of the Real Property Leases and
there exists no condition or event, which, with the passage of time, giving of notice or both, would reasonably be expected to
give rise to a default under or breach of the Real Property Leases.


 





3.17Relationships
with Collaborators and Suppliers.


 


3.17.1.Collaborators.  Set
forth on Schedule 3.17.1 is a list, by the Company, of the material collaborators, research partners and other material
service providers of the Company.  For the purposes of this Section “material collaborators” means scientific
research collaborators who work with the Company and whose work is expected to impact the development of the Company Intellectual
Property and/or the Products, and includes, without limitation, any Person to whom the Company has licensed any of the Company
Intellectual Property (collectively, the “Collaborators”).  To the best of the Company’s
knowledge, the Company maintains good working relationships with all of the Collaborators.  The Company has delivered
or made available to the Purchasers a list of the Company’s Contracts with the Collaborators as set forth on Schedule
3.17.1.  Except as set forth on Schedule 3.17.1, none of such Collaborators has terminated or indicated an
intention or plan or, to the knowledge of the Company, threatened to terminate its Contract with the Company, or to materially
reduce the purchases of products or services from the Company historically made by such Collaborator.


 






    	12



    	 



    

 


3.17.2.Suppliers.  Set
forth on Schedule 3.17.2 is a list of the material suppliers of the Company.  For the purposes of this Section,
“material suppliers” means suppliers who provide an essential and material element necessary for the research and development
of the Company Intellectual Property or required for the Products (collectively, the “Suppliers”).  Except
as set forth on Schedule 3.17.2, none of such Suppliers has terminated or indicated an intention or plan or, to the knowledge
of the Company, threatened to terminate its Contract with the Company, or to materially reduce the supply of products or services
to the Company historically provided by such Supplier.


 

3.18Budget.  The
Company’s budget most recently delivered by the Company to the Purchasers (the “Budget”) was prepared
in good faith by the Company, and, based on the Company's experience and the assumptions used in preparing such Budget, constitutes
a reasonable estimate of the costs and expenses expected to be incurred by the Company during the time period covered thereby.  Nothing
has come to the attention of the Company’s management that would cause such estimated expenses to no longer be reasonable
estimates.  The assumptions used in the preparation of such estimated expenses were fair and reasonable when made and
continue to be fair and reasonable as of the date hereof.







  


3.19Permits; Regulatory.


 


3.19.1No Regulatory
Approval or Consent of, or any designation, declaration or filing with, any Governmental or Regulatory Authority or any other Person
is required in connection with the valid execution, delivery and performance of this Agreement and the other Transaction Documents
(including, without limitation, the issuance of the Securities), except such Regulatory Approvals, Consents, designations, declarations
or filings that have been duly and validly obtained or filed, or with respect to any filings that must be made after the Initial
Closing or the Subsequent Closing as will be filed in a timely manner. The Company has all franchises, Permits, licenses and any
similar authority necessary for the conduct of its business as now being conducted. 


 


3.19.2There
are no feasibility, preclinical, clinical or other studies, tests or trials being conducted by or on behalf of or sponsored by
the Company or in which the Company or any of its Products is participating. The feasibility, preclinical, clinical and other studies,
tests and trials conducted by or on behalf of or sponsored by the Company or in which the Company or any of the Company’s
Products have participated were conducted in accordance with standard medical and scientific research procedures, the protocols
established and approved therefor and all applicable Requirements of Law. The Company has no knowledge of any other studies or
tests the results of which are inconsistent with or otherwise call into question the results of the above referenced studies and
tests.


 


3.19.3 The Company has not been convicted of any crime.


 


3.19.4 To the knowledge of the Company, no officer, employee or agent
of the Company has been convicted of any felony.


 






    	13



    	 



    

 


3.20Environmental
and Safety Laws. The Company has not caused or allowed, or contracted with any party for, the generation, use, transportation,
treatment, storage or disposal of any Hazardous Substances in connection with the operation of its business or otherwise, except
in compliance with all applicable Environmental Laws. To the best of the Company’s knowledge, the Company and the operation
of its business are in compliance with all applicable Environmental Laws. To the best of the Company’s knowledge, all of
the Leased Real Property and all other real property which the Company occupies (the “Premises”) is in
compliance with all applicable Environmental Laws and Orders or directives of any Governmental or Regulatory Authority having jurisdiction
under such Environmental Laws, including, without limitation, any Environmental Laws or Orders or directives with respect to any
cleanup or remediation of any release or threat of release of Hazardous Substances. The Company and the operation of its business
is and has been in compliance with all applicable Environmental Laws. To the knowledge of the Company, there have occurred no and
there are no events, conditions, circumstances, activities, practices, incidents, or actions that may give rise to any common law
or statutory liability, or otherwise form the basis of any Legal Proceeding, any Order, any remedial or responsive action, or any
investigation or study involving or relating to the Company, based upon or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling, or the emission, discharge, release or threatened release into the environment,
of any pollutants, contaminants, chemicals, or industrial, toxic or Hazardous Substance. To the knowledge of the Company, (a) there
is no asbestos contained in or forming a part of any building, structure or improvement comprising a part of any of the Leased
Real Property, (b) there are no polychlorinated byphenyls (PCBs) present, in use or stored on any of the Leased Real Property,
and (c) no radon gas or the presence of radioactive decay products of radon are present on, or underground at any of the Leased
Real Property at levels beyond the minimum safe levels for such gas or products prescribed by applicable Environmental Laws. The
Company has obtained and is maintaining in full force and effect all necessary Permits, licenses and approvals required by all
Environmental Laws applicable to the Premises and the business operations conducted thereon, and is in compliance with all such
Permits, licenses and approvals. The Company has not caused or allowed a release, or a threat of release, of any Hazardous Substance
onto, at or near the Premises, and, to the knowledge of the Company, neither the Premises nor any property at or near the Premises
has ever been subject to a release, or a threat of release, of any Hazardous Substance.


 


3.21Offering Valid.
Assuming the accuracy of the representations and warranties of the Purchasers contained in the subscription agreements entered
into by each Purchaser in connection with this Agreement, the offer, sale and issuance of the Securities will be exempt from the
registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and will
be exempt from registration and qualification under applicable state securities laws.


 


3.22Full Disclosure.
All information furnished, to be furnished or caused to be furnished to the Purchasers with respect
to the Company, any of the Company’s businesses, assets, properties, financial position
and performance and Liabilities applicable for the purposes of or in connection with this Agreement or any of the other Transaction
Documents or any of the transactions contemplated hereby or thereby is or, if furnished after the date of this Agreement and before
the applicable Closing Date, shall be true and complete in all material respects and, does not, and if furnished after the date
of this Agreement and before such applicable Closing Date, shall not, contain any untrue statement of material fact or fail to
state any material fact necessary to make such statement not misleading.


 


3.23Minutes. A
copy of all minutes of all meetings of directors and stockholders and all actions by written consent without a meeting by the directors
and stockholders since February 2012, has been made available to the Purchasers in a virtual data room and accurately reflect all
actions taken by the directors (and any committee of the directors) and stockholders with respect to all transactions referred
to in such minutes.


 






    	14



    	 



    

 


3.24Insurance.
Schedule 3.24 sets forth a list of all policies or binders of fire, casualty, liability, product liability, worker’s
compensation, vehicular or other insurance held by the Company concerning its assets and/or its businesses (specifying for each
such insurance policy the insurer, the policy number or covering note number with respect to binders, and each pending claim thereunder
of more than $5,000) have been made available to the Purchasers in a virtual data room. Such policies and binders are valid and
in full force and effect. The Company is not in default with respect to any provision contained in any such policy or binder or
has failed to give any notice or present any claim of which it has notice under any such policy or binder in a timely fashion.
The Company has not received or given a notice of cancellation or non-renewal with respect to any such policy or binder. None of
the applications for such policies or binders contain any material inaccuracy, and all premiums for such policies and binders have
been paid when due. The Company does not have knowledge of any state of facts or the occurrence of any event that could reasonably
be expected to form the basis for any claim against it not fully covered by the policies referred to on Schedule 3.24. The
Company has not received written notice from any of their respective insurance carriers that any insurance premiums will be materially
increased after the applicable Closing Date or that any insurance coverage listed on Schedule 3.24 will not be available
after such Closing Date on substantially the same terms as now in effect.


 


3.25Investment Company
Act. The Company is not an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended.


 


3.26Foreign Payments;
Undisclosed Contract Terms.


 


3.26.1.To the
knowledge of the Company, the Company has not made any offer, payment, promise to pay or authorization for the payment of money
or an offer, gift, promise to give, or authorization for the giving of anything of value to any Person in violation of the Foreign
Corrupt Practices Act of 1977, as amended and the rules and regulations promulgated thereunder.


 


3.26.2.To the
knowledge of the Company, there are no understandings, arrangements, agreements, provisions, conditions or terms relating to, and
there have been no payments made to any Person in connection with any agreement, Contract, commitment, lease or other contractual
undertaking of the Company which are not expressly set forth in such contractual undertaking.


 


3.27No Broker.
Other than as disclosed on Schedule 3.27, the Company has not employed any broker or finder, or incurred any liability for
any brokerage or finder’s fees in connection with the sale of the Warrants underlying the Securities pursuant to this Agreement
or the other Transaction Documents.


 


3.28No General Solicitation.
Neither the Company nor any of its Affiliates, nor any person acting on their behalf, has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale
of the Securities or in any other offering of the Company within the last three years.


 


3.29No Integrated
Offering. Neither the Company nor any of its affiliates, nor any person acting on their behalf has, directly or indirectly,
made any offers or sales of any Securities or solicited any offers to buy any Securities, under circumstances that would require
registration of any of the Securities under the Securities Act or that is likely to cause
this offering of the Securities to be integrated with prior or contemporaneous offerings by the Company for purposes of the Securities
Act or any applicable shareholder approval provisions. Neither the Company nor any of its affiliates, nor any person acting on
their behalf has taken any action or steps referred to in the preceding sentence that would require registration of any of the
Securities under the Securities Act or cause the offering of the Securities to be integrated with other offerings. Neither the
Company nor any of its affiliates, nor any person acting on their behalf has taken any action or steps referred to in the preceding
sentence that would require registration of any of the Securities under the Securities Act.


 






    	15



    	 



    

 


3.30Dilution.
Except for the anti-dilution rights described on Schedule 3.30, no holder of any common stock or Common Stock Equivalents
of the Company has any anti-dilution rights. The Company’s executive officers and directors understand the nature of the
Securities being sold hereby and recognize that the issuance of the Securities will have a potential dilutive effect on the equity
holdings of other holders of the Company’s equity or rights to receive equity of the Company. The Company’s Board of
Directors has concluded, in its good faith business judgment that the issuance of the Securities is in the best interests of the
Company. The Company specifically acknowledges that its obligation to issue Warrant Shares is binding upon the Company and enforceable
regardless of the dilution such issuance may have on the ownership interests of other stockholders of the Company or parties entitled
to receive equity of the Company.


 





3.31Maintenance Requirements.
The common stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed
to, or which to its knowledge is likely to have the effect of, terminating the registration of the common stock under the Exchange
Act nor has the Company received any notification that the SEC is contemplating terminating such registration.


 


3.32OFAC. The
Company, to the Company’s knowledge, any director, officer, agent, employee, Affiliate or person acting on behalf of the
Company, is not currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the sale of
the Securities, or lend, contribute or otherwise make available such proceeds to any joint venture partner or other person or entity,
towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose
of financing the activities of any person currently subject to any U.S. sanctions.


 


3.33Registration Rights.
Except as required pursuant to the Registration Rights Agreement, the Company is not under any obligation, nor has granted any
rights that have not been terminated, to register any of the Company’s currently outstanding securities or any of its securities
that may hereafter be issued.


 


3.34Material Non-Public
Information. Except with respect to the transactions contemplated hereby that will be publicly disclosed, the Company has not
provided any Purchaser with any information that the Company believes constitutes material non-public information.


 


3.35Application of
Takeover Protections. The Company has 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 Organization Documents or the laws of its state of incorporation that is or could become applicable
to the Purchaser as a result of the Purchaser and the Company fulfilling their obligations or exercising their rights under this
Agreement, including, without limitation, the Company's issuance of the Securities and the Purchaser’s ownership of the Securities.


 


3.36Listing and Maintenance
Requirements. The Common Stock is quoted on the OTCQB under the symbol NXTD. The Company has not,
in the twenty-four (24) 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.


 






    	16



    	 



    

 


3.37Disclosure.
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 any of the Purchasers or
their agents or counsel with any information that it believes constitutes or might constitute material, non-public information. 
 The Company understands and confirms that the Purchasers 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 the Purchasers regarding
the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Schedules
to this Agreement, taken as a whole 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. For the avoidance of doubt, information disclosed in one section of the Schedule shall not be deemed
disclosed in any other section of the Schedule unless there is an explicit cross reference to such other section. The Company acknowledges
and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3 hereof.


 


3.38Office of Foreign
Assets Control. Neither the Company nor any Subsidiary  nor, to the Company's knowledge,
any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).


 


3.39Accountants.
The Company’s accounting firm is set forth on Schedule 3.39 of the Disclosure Schedules. To the knowledge and belief
of the Company, such accounting firm is registered with the Public Company Accounting Oversight Board, and shall express its opinion
with respect to the financial statements to be included in the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2013.


 


3.40No 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.


 


3.41Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to
the contrary notwithstanding (except for Sections 3.34 and 4.21 hereof), it is understood and acknowledged by the Company that:
(i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling,
long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company
or to hold the Securities for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically
including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future
private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii)
any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or
indirectly, may presently have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed to
have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. 
The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities in accordance
with all applicable laws at various times during the period that the Securities are outstanding, including, without limitation,
during the periods that the value of the Warrant Shares deliverable with respect to Securities are being determined, and (z) such
hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the
time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities
do not constitute a breach of any of the Transaction Documents.


 






    	17



    	 



    

 


3.42Regulation M Compliance.
The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of,
any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement
agent in connection with the placement of the Securities.


 


3.43Stock Option Plans.
Except as set forth on Schedule 3.43, as of the date hereof, no stock options have been granted,
nor any commitments made to grant stock options, under the Stock Option Plan, and neither the Company nor any Subsidiary has ever
had an option plan. 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.


 


3.44Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The
Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and
the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date,
the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is
reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.


 


3.45Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, and the Company’s good faith estimate
of the fair market value of its assets, after giving effect to the receipt by the Company of the proceeds from the sale of the
Securities 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, consolidated 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 which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.45 sets forth as of the date hereof
all outstanding liens secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary
has commitments which has not been disclosed in the Reports. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 other than debt financing from a licensed United
States bank regularly engaged in such lending activity, and (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, but in all cases excluding trade accounts payable incurred by the Company and its Subsidiaries
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.


 






    	18



    	 



    

 


4.REPRESENTATIONS
AND WARRANTIES OF THE PURCHASERS.


 


Each of the Purchasers hereby
severally, and not jointly, represents and warrants to the Company that each such Purchaser’s representations and warranties
in the subscription agreement entered into in connection with this Agreement are true and correct as of their respective Closing,
and such representations and warranties are deemed repeated as if contained herein.


 


5.CONDITIONS
TO THE CLOSING.


 


5.1Conditions to Purchasers’
Obligations at the Closings. The obligations of the Purchasers to consummate the transactions contemplated herein to be consummated
at the Initial Closing and of each Subsequent Closing, as the case may be, are subject to the satisfaction, on or prior to the
date of such Closing, of the conditions set forth below and applicable thereto, which satisfaction shall be determined, or may
be waived in writing, by either the Purchasers or Subsequent Closing Purchasers, as the case may be, who have subscribed for at
least a majority of the Securities to be purchased at such Closing:


 


5.1.1.Representations
and Warranties; Performance of Obligations. Each of the representations and warranties of the Company contained herein shall
be true and correct on and as of the Initial Closing Date. As of the Initial Closing, the Company shall have performed and complied
with the covenants and provisions of this Agreement required to be performed or complied with by it at or prior to the Initial
Closing Date. As to the Subsequent Closings, each of the representations and warranties of the Company contained herein shall be
true and correct on and as of the Subsequent Closing Date, as qualified by any updated Schedules delivered at least five (5) days
in advance of the Subsequent Closing to the Subsequent Closing Purchasers participating in the Subsequent Closing. As to the Subsequent
Closings, the Company shall have performed and complied with the covenants and provisions of this Agreement and the other Transaction
Documents required to be performed or complied with by it at or prior to the Subsequent Closing Date. At each Closing, the Purchasers
participating in such Closing shall have received certificates of the Company dated as of the date of such Closing, signed by the
president or chief executive officer of the Company, certifying as to the fulfillment of the conditions set forth in this Section
5.1 and the truth and accuracy of the representations and warranties of the Company contained herein (as qualified by the most
recently delivered Schedules) as of the Initial Closing Date and, as to each Subsequent Closing, the Subsequent Closing Date.


 


5.1.2.Issuance
in Compliance with Laws. The sale and issuance of the Securities shall be legally permitted by all laws and regulations to
which any of the Purchasers and the Company are subject.


 


5.1.3.Filings,
Consents, Permits, and Waivers. The Company and the Purchasers shall have made all filings and obtained any and all Consents,
Permits, waivers, and Regulatory Approvals necessary for consummation of the transactions contemplated by the Agreement and the
other Transaction Documents, including the waivers described on Schedule 5.1.3, except for such filings as are not due to
be made until after the applicable Closing.


 






    	19



    	 



    

 


5.1.4.Reservation
of Warrant Shares. The Warrant Shares shall have been duly authorized and reserved for issuance by the Board of Directors.


 


5.1.5.Registration
Rights Agreement. Concurrently with the issuance of the Securities occurring at the Initial Closing and at each Subsequent
Closing, the Registration Rights Agreement, substantially in the form attached hereto as Exhibit
C (the “Registration Rights Agreement”), shall have been executed and delivered by the Company and
each Purchaser.


 


5.1.6.Proceedings
and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closings and all
documents and instruments incident to such transactions shall be reasonably satisfactory in substance and form to the Purchaser
and the Purchaser’s counsel, and the Purchaser and the Purchaser’s counsel shall have received all such counterpart
originals or certified or other copies of such documents as they may reasonably request.


 


5.1.7.Proceedings
and Litigation. No action, suit or proceeding shall have been commenced by any Person against any party hereto seeking to restrain
or delay the purchase and sale of the Securities or the other transactions contemplated by this Agreement or any of the other Transaction
Documents.


 


5.1.8.No
Material Adverse Effect. Since the date hereof, there shall not have occurred any effect, event, condition or circumstance
(including, without limitation, the initiation of any litigation or other legal, regulatory or investigative proceeding) that individually
or in the aggregate, with or without the passage of time, the giving of notice, or both, that has had, or could reasonably be expected
to have, a Material Adverse Effect or which could adversely affect the Company’s ability to perform its respective obligations
under this Agreement or any of the other Transaction Documents.


 


5.1.9.Updated
Disclosures. As to the Subsequent Closings, the Company must have delivered to the Purchasers an updated set of schedules in
accordance with Section 5.1.1 and such updated schedules do not reveal any information or the occurrence, since the Initial Closing
Date, of any effect, event, condition or circumstance, which individually, or in the aggregate, has had or could reasonably be
expected to have, a Material Adverse Effect and do not include any state of facts that occur as a result of the breach by the Company
of any of its obligations under this Agreement or any of the other Transaction Documents.


 


5.1.10.Payment
of Purchase Price. As to each closing, each Purchaser shall have delivered to the Company the total purchase price to be paid
for such Purchaser’s Securities, in the amount set forth opposite such Purchaser’s name on Exhibit A.


 


5.1.11.Delivery
of Documents at the Initial Closing. The Company shall have executed and delivered the following documents, on or prior to
the Initial Closing Date, and in the case of the Certificates, within five (5) business days thereafter:


 


(a)Warrants:
An executed Warrant, in substantially the form of Exhibit B, for the Warrants to be issued on the Initial Closing Date;



 






    	20



    	 



    




 


5.1.12.Delivery
of Documents at the Subsequent Closing. The Company shall have executed and delivered the following documents, on or
prior to the Subsequent Closing, and in the case of the Certificates,
within a reasonable time thereafter:


 


(a)Warrants:
An executed Warrant, in substantially the form of Exhibit B, for the Warrants to be issued on the Subsequent Closing Date;


 


5.2Conditions to Obligations
of the Company at the Closings. The obligation of the Company to consummate the transactions contemplated herein to be consummated
at the Initial Closing or the Subsequent Closing, as the case may be, is subject to the satisfaction, on or prior to the date of
such Closing of the conditions set forth below and applicable thereto, any of which may be waived in writing by the Company:


 


5.2.1.Representations
and Warranties; Performance of Obligations. Each of the representations and warranties of the Purchasers contained herein shall
be true and correct on and as of the Initial Closing Date. As of the Initial Closing Date, the Purchasers shall have performed
and complied with the covenants and provisions of this Agreement required to be performed or complied with by them at or prior
to the Initial Closing Date. As to the Subsequent Closing, each of the representations and warranties of the Purchaser(s) contained
herein shall be true and correct on and as of the Subsequent Closing Date. As to the Subsequent Closing, the Subsequent Closing
Purchaser(s) shall have performed and complied with the covenants and provisions of this Agreement required to be performed and
complied with by them at or prior to the Subsequent Closing Date.


 


5.2.2.Proceedings
and Litigation. No action, suit or proceeding shall have been commenced by any Governmental Authority against any party hereto
seeking to restrain or delay the purchase and sale of the Securities or the other transactions contemplated by this Agreement.


 


5.2.3.Qualifications.
All Permits, if any, that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement
shall be obtained and effective as of the Initial Closing or Subsequent Closing, as applicable.


 


6.COVENANTS
OF THE PARTIES.


 


6.1Transfer
Restrictions. 


 


6.1.1.The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144 promulgated under the Securities Act, to the Company or
to an Affiliate of a Purchaser, 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 shall be reasonably satisfactory
to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and
shall have the rights of a Purchaser under this Agreement.


 






    	21



    	 



    

 


6.1.2.The
Purchaser agrees to the imprinting, so long as is required by this Section 6.1, of a legend on any of the Securities, including
the Warrant Shares, substantially in the following form:


 


NEITHER THESE SECURITIES NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE 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 OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED 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.


 


6.1.3.Certificates
evidencing the Warrant Shares shall be eligible for issuance without or for removal of the restrictive legend set forth in Section
6.1.2 hereof, (a) following any sale of Warrants or Warrant Shares pursuant to Rule 144, (b) if such Securities or Warrant 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 Securities and Warrant Shares and without volume or manner-of-sale restrictions, (c) following
any sale of such Shares or Warrant Shares, pursuant to the plan of distribution in an effective registration statement (in compliance
with any prospectus delivery requirements), or (d) if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff of the Commission) (the “Removal Date”).  The
Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Removal Date if required by the
Transfer Agent to effect the issuance without or for removal of the legend hereunder as permitted by applicable law then in effect.
The Company agrees that following the Removal Date, it will, no later than five (5) trading days following the request for issuance
without a legend with respect to not yet issued Securities or Warrant Shares, or the delivery by a Purchaser to the Company or
the Transfer Agent of a certificate representing Warrant Shares with respect to already issued Shares or Warrant Shares, as the
case may be, issued with a restrictive legend, together with any reasonable certifications requested by the Company, the Company’s
counsel or the Transfer Agent (such fifth (5th) trading day, the “Legend Removal Date”), deliver or cause
to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends.
The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on
transfer set forth in this Section 6. Certificates for Shares and Warrant Shares subject to legend removal hereunder shall be transmitted
by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository
Trust Company System as directed by such Purchaser if the Transfer Agent is then a participant in such system and the Company is
eligible to use such system and as directed by such Purchaser if either (i) there is an effective registration
statement permitting the resale of such Warrant Shares by the Purchaser (and the Purchaser provides the Company or the Company’s
counsel with any requested certifications with respect to future sales of such shares) or (ii) the shares are eligible for resale
by the Purchaser 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 Warrant Shares and without volume or manner-of-sale restrictions.


 


6.1.4.In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares (based on the VWAP of the Common Stock on the date such Securities
are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 6.1.3, $10 per Trading
Day for each Trading Day after the Removal Date (increasing to $20 per Trading Day after the tenth Trading Day) until such certificate
is delivered without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s
failure to deliver certificates representing any Securities as required by the Transaction Documents, and such Purchaser shall
have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief.


 






    	22



    	 



    

 


6.1.5.DWAC.
In lieu of delivering physical certificates representing the unlegended shares, upon request of a Purchaser, so long as the certificates
therefor do not bear a legend and the Purchaser is not obligated to return such certificate for the placement of a legend thereon,
the Company shall cause its transfer agent to electronically transmit the unlegended shares by crediting the account of Purchaser’s
prime broker with the Depository Trust Company through its Deposit Withdrawal At Custodian system, provided that the Company’s
Common Stock is DTC eligible and the Company’s transfer agent participates in the Deposit Withdrawal at Custodian system.
Such delivery must be made on or before the Removal Date.


 


6.1.6.In
the event a Purchaser shall request delivery of unlegended shares as described in this Section 6.1.6 and the Company is required
to deliver such unlegended shares, the Company may not refuse to deliver unlegended shares based on any claim that such Purchaser
or anyone associated or affiliated with such Purchaser has not complied with Purchaser’s obligations under the Transaction
Documents, or for any other reason, unless, an injunction or temporary restraining order from a court, on notice, restraining and
or enjoining delivery of such unlegended shares shall have been sought and obtained by the Company and the Company has posted a
surety bond for the benefit of such Purchaser in the amount of the greater of (i) 15% of the amount of the aggregate purchase price
of the Warrant Shares which is subject to the injunction or temporary restraining order, or (ii) the VWAP of the Common Stock on
the trading day before the issue date of the injunction multiplied by the number of unlegended shares to be subject to the injunction,
which bond shall remain in effect until the completion of arbitration/’litigation of the dispute and the proceeds of which
shall be payable to such Purchaser to the extent Purchaser obtains judgment in Purchaser’s favor.


 


6.1.7.Buy-In.
In addition to any other rights available to Purchaser, if the Company fails to deliver to a Purchaser unlegended shares as required
pursuant to this Agreement and after the Removal Date the Purchaser, or a broker on the Purchaser’s behalf, purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of the shares
of Common Stock which the Purchaser was entitled to receive in unlegended form from the Company (a “Buy-In”),
then the Company shall promptly pay in cash to the Purchaser (in addition to any remedies available to or elected by the Purchaser)
the amount, if any, by which (A) the Purchaser’s total purchase price (including brokerage commissions, if any) for the shares
of Common Stock so purchased exceeds (B) the aggregate purchase price of the shares of Common Stock delivered to the Company for
reissuance as unlegended shares together with interest thereon at a rate of 15% per annum accruing until such amount and any accrued
interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty). For example, if a Purchaser
purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to $10,000 of purchase
price of Warrant Shares delivered to the Company for reissuance as unlegended shares, the Company shall be required to pay the
Purchaser $1,000, plus interest, if any. The Purchaser shall provide the Company written notice indicating the amounts payable
to the Purchaser in respect of the Buy-In.


 






    	23



    	 



    

 


6.1.8.Each
Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell the Securities
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance
with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 6.1.8 is predicated upon the Company’s reliance upon this understanding.


 


6.2Reservation
of Shares. The Company shall at all times while the Warrants are outstanding maintain a reserve from its duly authorized shares
of common stock of a number of shares of common stock sufficient to allow for the issuance of Warrant Shares (“Required
Minimum”).


 


6.3Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, 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 and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under
such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement securities.
If a replacement certificate or instrument evidencing any securities is requested due to a mutilation thereof, the Company may
require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.


 


6.4Securities
Laws; Publicity. The Company shall by 8:30 a.m. (New York City time) on the trading day immediately following a Closing hereunder,
or at the latest, prior to the second trading day immediately following a Closing hereunder, file a Current Report on Form 8-K
disclosing the material terms of the transactions contemplated hereby and including the Transaction Documents as exhibits thereto
to the extent required by law. The Company shall not publicly disclose the name of Purchaser, or include the name of any Purchaser
in any filing with the SEC or any regulatory agency or trading market, without the prior written consent of Purchaser, except:
(a) as required by federal securities law in connection with the filing of final Transaction Documents (including signature pages
thereto) with the SEC and (b) to the extent such disclosure is required by law, in which case the Company shall provide the Purchaser
with prior notice of such disclosure permitted under this clause (b).


 


6.5Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D promulgated under the Securities Act and to provide a copy thereof, promptly upon request of the Purchaser. 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
Securities for, sale to the Purchaser 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 any Purchaser. 


 


6.6Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same
consideration is also offered to all of the parties to the Transaction Documents. 


 


6.7Non-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 Purchaser or its agents
or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto Purchaser
shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and
confirms that Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. 


 






    	24



    	 



    

 







6.8Permitted Indebtedness.
Until one year after the Effective Date, the Company will not incur any Indebtedness.


 


6.9Acknowledgment
of Dilution. The Company and Purchasers acknowledges that the issuance of the Securities may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that
its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Warrant Shares pursuant
to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive
effect that such issuance may have on the ownership of the other stockholders of the Company.


 


6.10Furnishing
of Information; Public Information.





 





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


 


(b)At any
time commencing on the Initial Closing Date and ending at such time that all of the Securities may be sold without the requirement
for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if
the Company shall fail for any reason to satisfy the current public information requirement under Rule 144(c) (a “Public
Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company shall pay
to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its
ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate Purchase Price held by such Purchaser
on the day of a Public Information Failure and on every thirtieth (30th) day (pro-rated for periods totaling less than thirty days)
thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information
is no longer required for the Purchasers to transfer the Warrant Shares pursuant to Rule 144. The payments to which a Purchaser
shall be entitled pursuant to this Section 6.10 are referred to herein as “Public Information Failure Payments.”
Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public
Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public
Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner,
such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until
paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure,
and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief.


 





6.11Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require
the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior
to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.


 






    	25



    	 



    

 





6.12Exercise Procedures.
The form of Notice of Exercise included in the Warrants sets forth the totality of the procedures required of the Purchasers in
order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers
to exercise their Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with
the terms, conditions and time periods set forth in the Transaction Documents.


 





6.13Purchase
Price Reset.


 





6.13.1From
the date of this Agreement until the sooner of (i) the Purchaser and his permitted assigns no longer holds any Securities, and
(ii) two years after the Effective Date (the “Protection Period”), in the event that the Company issues
or sells any shares of Common Stock or any Common Stock Equivalent (calculated on an as converted, as exercised basis) pursuant
to which shares of Common Stock may be acquired at a price less than the Per Share Purchase Price (a “Share Dilutive
Issuance”) (adjusted as described in Section 7.26), then the Company shall promptly issue additional shares of Common
Stock to the Purchasers who held outstanding Shares on the date of such Share Dilutive Issuance,
for no additional consideration, in an amount sufficient that (a) the aggregate Purchase Price paid at the Initial Closing and
the Subsequent Closing, if any, for such outstanding Shares held by Purchasers on the date of
such Share Dilutive Issuance (whether or not such Purchasers were the Purchasers at the Initial Closing or the Subsequent Closing,
if any), when divided by (x) the sum of (i) the total number of outstanding Shares held by the
Purchasers on the date of such Share Dilutive Issuance, (ii) any other shares of Common Stock then or theretofore issued in respect
of such outstanding Shares (by stock split, stock dividend or otherwise) that resulted in an
adjustment to the Per Share Purchase Price referred to above pursuant to Section 7.26, and (iii) all Additional Shares issued with
respect to such outstanding Shares held by the Purchasers on the date of such Share Dilutive
Issuance that were issued as a result of Share Dilutive Issuances that occurred prior to such Share Dilutive Issuance, will equal
the price per share of Common Stock in such Share Dilutive Issuance, (each such adjustment, a “Share Dilution Adjustment”,
and such shares, the “Additional Shares”). The Additional Shares to be issued in a Share Dilution Adjustment
shall be issued by the Company to the Purchasers who held outstanding Shares on the date of the
applicable Share Dilutive Issuance (in proportion to the number of such Shares held by such Purchasers on the date of such Share
Dilutive Issuance). Such Share Dilution Adjustment shall be made successively whenever such an issuance is made. Such Additional
Shares must be delivered to the applicable Purchasers not later than the date the Share Dilutive Issuance occurs. 


 





6.13.2From
the date of this Agreement until the end of the Protection Period, in the event that the Company issues or sells any shares of
Common Stock or any Common Stock Equivalent (calculated on an as converted, as exercised basis) pursuant to which shares of Common
Stock may be acquired at a price less than the exercise price per share of Common Stock that was paid during the Protection Period
by a Purchaser upon exercise of a Warrant (a “Warrant Dilutive Issuance”) (adjusted as described in Section
7.26), then the Company shall promptly issue additional shares of Common Stock to the Purchasers who on the date of such Warrant
Dilutive Issuance held the issued Warrant Shares that were issued upon such exercise, for no additional consideration, in an amount
sufficient that (a) the aggregate exercise price paid for such issued Warrant Shares held by the Purchasers on the date of such
Warrant Dilutive Issuance (whether or not such Purchasers were the Purchasers who exercised such Warrant), when divided by (x)
the sum of (i) the total number of such issued Warrant Shares held by the Purchasers on the date of such Warrant Dilutive Issuance,
(ii) any other shares of Common Stock then or theretofore issued in respect of such issued Warrant Shares (by stock split, stock
dividend or otherwise) that resulted in an adjustment to the exercise price referred to above pursuant to Section 7.26, and (iii)
all Additional Warrant Shares issued with respect to such issued Warrant Shares held by the Purchasers on the date of such Warrant
Dilutive Issuance that were issued as a result of Warrant Dilutive Issuances that occurred prior to such Warrant Dilutive Issuance,
will equal the price per share of Common Stock in such Warrant Dilutive Issuance, (each such adjustment, a “Warrant
Dilution Adjustment”, and such shares, the “Additional Warrant Shares”). The Additional
Warrant Shares to be issued in a Warrant Dilution Adjustment shall be issued by the Company to the Purchasers who held the applicable
issued Warrant Shares on the date of the applicable Warrant Dilutive Issuance (in proportion to the number of such issued Warrant
Shares held by such Purchasers on the date of such Warrant Dilutive Issuance). Such Warrant Dilution Adjustment shall be made successively
whenever such an issuance is made. Such Additional Warrant Shares must be delivered to the applicable Purchasers not later than
the date the Warrant Dilutive Issuance occurs.


 






    	26



    	 



    

 





6.13.3Notwithstanding
the foregoing, this Section 6.13 shall not apply in respect of an Exempt Issuance. No adjustment shall be made hereunder which
would require the Purchaser to surrender any shares to the Company. The holder of outstanding Additional Shares and Additional
Warrant Shares is granted the same rights and benefits as a holder of outstanding Shares pursuant to the Transaction Documents,
except the rights and benefits of this Section 6.13 and except that such rights and benefits shall not apply to a holder of outstanding
Additional Shares or Additional Warrant Shares after such outstanding Additional
Share or Additional Warrant Share has been irrevocably sold pursuant to an effective registration statement under the Securities
Act or pursuant to Rule 144 without further restrictions or conditions to transfer pursuant to Rule 144.


  


6.14Indemnification
of Purchasers. Subject to the provisions of this Section 6.16, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (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 such Purchaser (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 “Purchaser 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 such Purchaser
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 Purchaser
Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate
of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action
is based upon a breach of such Purchaser’s Party’s representations, warranties or covenants under the Transaction Documents
or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser
Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful
misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser 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 the Purchaser Party. Any Purchaser 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 such Purchaser 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 such Purchaser 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 Purchaser Party
under this Agreement (y) for any settlement by a Purchaser 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 Purchaser Party’s breach of its representations, warranties or covenants under the Transaction Documents
or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser
Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful
misconduct or malfeasance. The indemnification required by this Section 6.16 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 however, each Purchaser Party
who receives such interim payment agrees to reimburse the Company for any such payment made by the Company to such Purchaser Party
if it is finally determined in such action or proceeding that such Purchaser Party is not entitled to indemnification pursuant
to this Section 6.16. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of
any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.


 






    	27



    	 



    

 





6.15Reservation
and Listing of Securities.


 





6.15.1The Company
shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in
such amount as may then be required to fulfill its obligations in full under the Transaction Documents, but not less than the Required
Minimum.


 


6.15.2If, on
any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum
on such date, then the Board of Directors shall amend the Company’s certificate or articles of incorporation to increase
the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon as possible
and in any event not later than the 60th day after such date.


 


6.15.3The Company
hereby agrees to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and
concurrently with each Closing, the Company shall apply to list or quote all of the Shares and Warrant Shares at least equal to
the Required Minimum on such Trading Market and promptly secure the listing of all of the Shares and Warrant Shares at least equal
to the Required Minimum on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded
on any other Trading Market, it will then include in such application all of the Shares and Warrant Shares at least equal to the
Required Minimum, and will take such other action as is necessary to cause all of the Shares and Warrant Shares at least equal
to the Required Minimum to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take
all action necessary to continue the listing or quotation and trading of its Common Stock on a Trading Market until the later of
(i) at least five years after the Closing Date, and (ii) for so long as the Warrants are outstanding, and will comply in all respects
with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market at least until
five years after the Closing Date and for so long as the Warrants are outstanding. In the event the aforedescribed listing is not
continuously maintained for five years after the Closing Date (a “Listing Default”), then in addition
to any other rights the Purchasers may have hereunder or under applicable law, on the first day of a Listing Default and on each
monthly anniversary of each such Listing Default date (if the applicable Listing Default shall not have been cured by such date)
until the applicable Listing Default is cured, the Company shall pay to each Purchaser an amount in cash, as partial liquidated
damages and not as a penalty, equal to 2% of the aggregate Purchase Price and purchase price of Warrant Shares held by such Purchaser
on the day of a Listing Default and on every thirtieth day (pro-rated for periods less than thirty days) thereafter until the date
such Listing Default is cured. If the Company fails to pay any liquidated damages pursuant to this Section in a timely manner,
the Company will pay interest thereon at a rate of 1.5% per month (pro-rated for partial months) to the Purchaser.


 






    	28



    	 



    

 





6.16Subsequent Equity
Sales. Without prior written approval from Holder, from the date hereof until such time as the Common Stock and Warrants are
no longer outstanding, the Company will not, without the consent of the Purchasers, enter into any Equity Line of Credit or similar
agreement, nor issue nor agree to issue any common stock, floating or Variable Priced Equity Linked Instruments nor any of the
foregoing or equity with price reset rights (subject to adjustment for stock splits, distributions, dividends, recapitalizations
and the like) (collectively, the “Variable Rate Transaction”).   For purposes hereof,
“Equity Line of Credit” shall include any transaction involving a written agreement between the Company
and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter
over an agreed period of time and at an agreed price or price formula, and “Variable Priced Equity Linked Instruments”
shall include: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right
to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt
or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date
at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s
Common Stock since date of initial issuance, and (B) any amortizing convertible security which amortizes prior to its maturity
date, where the Company is required or has the option to (or any investor in such transaction has the option to require the Company
to) make such amortization payments in shares of Common Stock which are valued at a price that is based upon and/or varies with
the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security (whether
or not such payments in stock are subject to certain equity conditions).  For purposes of determining the total consideration
for a convertible instrument (including a right to purchase equity of the Company) issued, subject to an original issue or similar
discount or which principal amount is directly or indirectly increased after issuance, the consideration will be deemed to be the
actual cash amount received by the Company in consideration of the original issuance of such convertible instrument. Until twenty-four
(24) months after the Effective Date, the Company will not issue any Common Stock or Common Stock Equivalents to those individuals
listed on Schedule 6.23  nor will the Company issue any replacement shares of Surrendered Shares except in the amounts and
on the terms set forth on Schedule 6.16.


 





6.17Capital Changes.
Until the one year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock split or reclassification
of the Common Stock without 10 days prior written notice to the Purchasers, unless such reverse split is made in conjunction with
the listing of the Common Stock on a national securities exchange.


 






    	29



    	 



    

 


6.18Reimbursement.
If any Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is a stockholder of the Company
(except as a result of sales, pledges, margin sales and similar transactions by such Purchaser to or with any current stockholder),
solely as a result of such Purchaser’s acquisition of the Securities under this Agreement, the Company will reimburse such
Purchaser for its reasonable legal and other expenses (including the cost of any investigation preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred. The reimbursement obligations of the Company under
this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and
conditions to any Affiliates of the Purchasers who are actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may be, of the Purchasers and any such Affiliate, and
shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company,
the Purchasers and any such Affiliate and any such Person. The Company also agrees that neither the Purchasers nor any such Affiliates,
partners, directors, agents, employees or controlling persons shall have any liability to the Company or any Person asserting
claims on behalf of or in right of the Company solely as a result of acquiring the Securities under this Agreement.


 





6.19DTC Program.
At all times that Warrants are outstanding, the Company will employ as the transfer agent for the Common Stock and Warrant Shares
a participant in the Depository Trust Company Automated Securities Transfer Program and cause the Common Stock to be transferable
pursuant to such program.


 



    	30



    	 



    

 


6.20Purchaser’s
Exercise Limitations. The Company shall not effect any exercise of the option granted to each Purchaser in Section 2.2 of this
Agreement, and a Purchaser shall not have the right to exercise any portion of such option, pursuant to Section 2.2 or otherwise,
to the extent that after giving effect to such issuance after exercise as set forth on the applicable Exercise Notice, the Purchaser
(together with the Purchaser’s Affiliates, and any other Persons acting as a group together with the Purchaser or any of
the Purchaser’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). 
For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Purchaser and its Affiliates
shall include the number of shares of Common Stock issuable upon exercise of the option with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining,
nonexercised portion of the option beneficially owned by the Purchaser or any of its Affiliates and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common
Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially
owned by the Purchaser or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section
6.22, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder, it being acknowledged by the Purchaser that the Company is not representing to the Purchaser that such
calculation is in compliance with Section 13(d) of the Exchange Act and the Purchaser is solely responsible for any schedules required
to be filed in accordance therewith. To the extent that the limitation contained in this Section 6.22 applies, the determination
of whether the option is exercisable (in relation to other securities owned by the Purchaser together with any Affiliates) and
of which portion of the option is exercisable shall be in the sole discretion of the Purchaser, and the submission of an Exercise
Notice shall be deemed to be the Purchaser’s determination of whether the option is exercisable (in relation to other securities
owned by the Purchaser together with any Affiliates) and of which portion of the option is exercisable, in each case subject to
the Beneficial Ownership Limitation. To ensure compliance with this restriction, a Purchaser will be deemed to represent to the
Company when it delivers an Exercise Notice that such Exercise Notice has not violated the restrictions set forth in this paragraph,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. For purposes of this Section 6.22, in determining the number of outstanding shares of Common
Stock, a Purchaser may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or
(C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. 
Upon the written or oral request of a Purchaser, the Company shall within two Trading Days confirm orally and in writing to the
Purchaser the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the Warrants,
by the Purchaser or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The
“Beneficial Ownership Limitation” shall be 4.99%, unless a Purchaser elects on its signature page hereto
a different amount for its own Beneficial Ownership Limitation (which shall also apply to and supercede the corresponding Beneficial
Ownership Limitation as same relates to the Warrants issued to such electing Purchaser) of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of the option. The
Purchaser, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 6.22, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares
of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of the
option held by the Purchaser and the provisions of this Section 6.22 shall continue to apply. Any such increase or decrease will
not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6.22 to correct
this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation
herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of the option right.


 






    	31



    	 



    

 


7.MISCELLANEOUS.


 


7.1Governing Law;
Submission to Jurisdiction; Waiver of Trial by Jury. This Agreement shall be governed in all respects by the laws of the State
of New York without regard to the conflict of laws principles of the State of New York or any other jurisdiction. No suit,
action or proceeding with respect to this Agreement or any of the Transaction Documents may be brought in any court or before any
similar authority other than in a court of competent jurisdiction in the State of New York and the parties hereby submit to the
exclusive jurisdiction of such courts for the purpose of such suit, proceeding or judgment. Each of the parties hereto hereby irrevocably
waives any right which it may have had to bring such an action in any other court, domestic or foreign, or before any similar domestic
or foreign authority and agrees not to claim or plead the same. Each of the parties hereto hereby irrevocably and unconditionally
waives trial by jury in any legal action or proceeding in relation to this Agreement or any of the Transaction Documents and for
any counterclaim therein.


 


7.2Survival of Representations
and Warranties. The representations and warranties made by the Company and the Purchasers herein at each Closing shall survive
such Closing. All statements contained in any certificate or other instrument delivered by or on behalf of any party to this Agreement,
pursuant to or in connection with the transactions contemplated by this Agreement or any of the other Transaction Documents shall
be deemed to be representations and warranties made by such party as of the date of such certificate or other instrument.


 






    	32



    	 



    

 


7.3Successors and
Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of each other party. Notwithstanding the foregoing (a) any Purchaser may assign or transfer,
in whole or, from time to time, in part, the right to purchase all or any portion of the Securities to one or more of its Affiliates
(subject to Affiliate qualification as an Accredited Investor) and (b) any Purchaser may assign or transfer any of its rights or
obligations under this Agreement, in whole or from time to time in part, to the Company or any other Purchaser or any Affiliate
of any other Purchaser. As a condition of any transfer pursuant to this Section 7.3, the transferee must agree in writing for the
benefit of all parties to this Agreement (which writing shall be in form and substance reasonably acceptable to all parties to
this Agreement) to be bound by the terms and conditions of this Agreement and all other Transaction Documents with respect to any
Shares being transferred hereunder.


 


7.4Entire Agreement.
This Agreement, the Exhibits and Schedules hereto, the other Transaction Documents and each of the Exhibits delivered pursuant
thereto constitute the full and entire understanding and agreement between the parties hereto with regard to the subject matter
hereof and thereof and no party hereto shall be liable or bound to any other party hereto in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein and therein.


 


7.5Severability.
If any provision of the Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.


 


7.6Amendment and Waiver.
Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed
by the Company and the Purchasers (and, to the extent of any assignment under Section 7.3 hereof, their respective permitted assigns
and any permitted assigns thereof) holding a majority of the voting power of the then outstanding Shares and Warrant Shares purchased
under this Agreement held by such holders, with each outstanding Share having one vote and each outstanding Warrant Share having
one vote and which majority must include Alpha Capital Anstalt for so long as Alpha Capital Anstalt holds $100,000 of Shares purchased
in the Offering.


 


7.7Delays or Omissions.
No delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by
another party under this Agreement, the other Transaction Documents, shall impair any such right, power or remedy, nor shall it
be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar
breach, default or noncompliance thereafter occurring. Any waiver or approval of any kind or character on any Purchaser’s
part of any breach, default or noncompliance under this Agreement, the other Transaction Documents or any waiver on such party’s
part of any provisions or conditions of the Agreement, the other Transaction Documents, must be in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies, either under this Agreement, the other Transaction Documents,
or otherwise afforded to any party, shall be cumulative and not alternative.


 


7.8Notices. All
notices, requests, demands and other communications given or made in accordance with the provisions of this Agreement shall be
addressed (i) if to a Purchaser, at such Purchaser’s address, fax number or email address, as furnished to the Company on
the signature page below or as otherwise furnished to the Company by the Purchaser in writing, or (ii) if to the Company, to the
attention of the President at such address, fax number or email address furnished to the Purchasers on the signature page below
or as otherwise furnished by the Company in writing, and shall be made or sent by a personal delivery or overnight courier, by
registered, certified or first class mail, postage prepaid, or by facsimile or electronic mail with confirmation of receipt, and
shall be deemed to be given on the date of delivery when made by personal delivery or overnight courier, 48 hours after being deposited
in the U.S. mail, or upon confirmation of receipt when sent by facsimile or electronic mail. Any party may, by written notice to
the other, alter its address, number or respondent, and such notice shall be considered to have been given three (3) days after
the overnight delivery, airmailing, faxing or sending via e-mail thereof.


 






    	33



    	 



    

 


7.9Expenses. The
Company shall pay all costs and expenses that it incurs with respect to the preparation, negotiation, execution, delivery
and performance of this Agreement, including, without limitation, any costs and expenses of its counsel. The Company shall pay
the reasonable fees and expenses of independent counsel for the Purchaser with respect to the negotiation and execution of this
Agreement and the other Transaction Documents in accordance with the terms of the Company’s agreement with the Purchaser.


 


7.10Titles and Subtitles.
The titles of the sections and subsections of the Agreement are for convenience of reference only and are not to be considered
in construing this Agreement.


 


7.11Counterparts;
Execution by Facsimile Signature. This Agreement may be executed in any number of counterparts (including execution by facsimile),
each of which shall be an original, but all of which together shall constitute one instrument. This Agreement may be executed by
facsimile signature(s) which shall be binding on the party delivering same, to be followed by delivery of originally executed signature
pages.


 


7.12Acknowledgment.
Any investigation or other examination that may have been made at any time by or on behalf of a party to whom representations and
warranties are made in this Agreement or in any other Transaction Documents shall not limit, diminish, supersede, act as a waiver
of, or in any other way affect the representations, warranties and indemnities contained in this Agreement and the other Transaction
Documents, and the respective parties may rely on the representations, warranties and indemnities made to them in this Agreement
and the other Transaction Documents irrespective of and notwithstanding any information obtained by them in the course of any investigation,
examination or otherwise, whether before or after any Closing.


 


7.13Publicity.
Except as otherwise required by law or applicable stock exchange rules, no announcement or other disclosure, public or otherwise,
concerning the transactions contemplated by this Agreement shall be made, either directly or indirectly, by any party hereto which
mentions another party (or parties) hereto without the prior written consent of such other party (or parties), which consent shall
not be unreasonably withheld, delayed or conditioned.


 


7.14No Third Party
Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer on any person other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations or Liabilities under or by reason of this Agreement.


 


7.15Pronouns.
All pronouns contained herein, and any variations thereof, shall be deemed to refer to the masculine, feminine or neutral, singular
or plural, as to the identity of the parties hereto may require.


 


7.16Rescission and
Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any
similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided,
then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the
case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock
subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid
to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s
Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).


 






    	34



    	 



    

 


7.17Replacement of
Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon surrender and 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, destruction, or mutilation, and of the ownership
of such Security.  The applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity and bonds) associated with the issuance of such replacement
Securities.


 


7.18Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery
of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. 
The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any
such obligation the defense that a remedy at law would be adequate.


 


7.19Payment Set Aside.
To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.


 


7.20Independent Nature
of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way
for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing
contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereof or thereto, shall be
deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall
not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.  Each Purchaser
has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents.  For reasons
of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through
G&M.  G&M does not represent all of the Purchasers.  The Company has elected to provide all Purchasers with the
same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by
any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each
other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively
and not between and among the Purchasers.


 






    	35



    	 



    

 


7.21Liquidated 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 due thereunder 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.


 


7.22Saturdays, 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.


 


7.23Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity
to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be
subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.


 


7.24Usury. To
the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and
will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any
time hereafter in force, in connection with any claim, action or proceeding that may be brought by any Purchaser in order to enforce
any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction
Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments
in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”),
and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated
with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such
Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents
is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract
rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the Initial Closing Date
thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess
of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by such Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the Company,
the manner of handling such excess to be at such Purchaser’s election.


 


7.25WAIVER
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.


 


7.26Equitable
Adjustment. Trading volume amounts, price/volume amounts and similar figures in the Transaction Documents shall be equitably
adjusted (but without duplication) to offset the effect of stock splits, similar events and as otherwise described in this Agreement
and Warrants.


 






    	36



    	 



    

 


8.DEFINITIONS.


 


As used in this Agreement,
the following terms shall have the meanings herein specified:


 


8.1“Affiliate”
shall mean, with respect to any Person specified: (i) any Person that directly or indirectly through one or more intermediaries
controls, is controlled by or under common control with the Person specified; (ii) any director, officer, or Subsidiary of the
Person specified; and (iii) the spouse, parents, children, siblings, mothers-in-law, fathers-in law, sons-in-law, daughters-in-law,
brothers-in-law, and sisters-in-law of the Person specified, whether arising by blood, marriage or adoption, and any Person who
resides in the specified Person’s home. For any director, officer, or Subsidiary of the Person specified. For purposes of
this definition and without limitation to the previous sentence, (x) “control” (including, with correlative meanings,
the terms “controlled by” and “under common control with”) of a Person means the power, direct or indirect,
to direct or cause the direction of management and policies of such Person, whether through ownership of voting securities, by
contract or otherwise, and (y) any Person beneficially owning, directly or indirectly, more than ten percent (10%) or more of any
class of voting securities or similar interests of another Person shall be deemed to be an Affiliate of that Person.


 


8.2“Agreement”
shall have the meaning set forth in the preamble to this Agreement.


 


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


 


8.4“Budget”
shall have the meaning set forth in Section 3.18.


 


8.5“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.


 


8.6“Certificate”
shall have the meaning set forth in Section 5.1.11.


 


8.7“Closing”
shall mean the Initial Closing or the Subsequent Closing, as applicable.


 


8.8“Closing
Date” shall mean the Initial Closing Date or the Subsequent Closing Date, as applicable.


 


8.9“Code”
shall have the meaning set forth in Section 3.13.2.


 


8.10“Collaborators” shall have the meaning set forth in Section 3.17.1.


 


8.11“Company”
shall have the meaning set forth in the preamble to this Agreement.


 


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


 


8.13“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.


 


8.14“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.


 






    	37



    	 



    

 


8.15“Company
Counsel” means, Robinson Brog Leinwand Greene Genovese & Gluck P.C., with offices at 875 Third Avenue, 9th
Floor, New York, New York 10022, Attn: David E. Danovitch, facsimile: (212) 956-2164.


 


8.16“Company
Intellectual Property” shall mean shall mean all Copyrights, Patents, Trademarks, technology, trade secrets, know-how,
inventions, methods, techniques and other intellectual property


 


8.17“Consents”
shall mean any consents, waivers, approvals, authorizations, or certifications from any Person or under any Contract, Organizational
Document or Requirement of Law, as applicable.


 


8.18“Contracts”
shall mean any indentures, indebtedness, contracts, leases, agreements, instruments, licenses, undertakings and other commitments,
whether written or oral.


 


8.19“Copyrights”
shall mean all copyrights, copyrightable works, mask works and databases, including, without limitation, any computer software
(object code and source code), Internet web-sites and the content thereof, and any other works of authorship, whether statutory
or common law, registered or unregistered, and registrations for and pending applications to register the same including all reissues,
extensions and renewals thereto, and all moral rights thereto under the laws of any jurisdiction.


 


8.20“Effective
Date” means the earliest of the date that (a) the Initial Registration Statement, as defined in the Registration
Rights Agreement, has been declared effective by the Commission, or (b) all of the Shares and Warrant Shares have been sold pursuant
to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public
information requirement under Rule 144 and without volume or manner-of-sale restrictions and Company counsel has delivered to the
Transfer Agent and such holders a standing written unqualified opinion that resales may then be made by such holders of the Shares
and Warrant Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.


 


8.21“Employee”
shall have the meaning set forth in Section 3.14.1.


 


8.22“Employee
Benefit Plans” shall have the meaning set forth in Section 3.15.1.


 


8.23“Encumbrances”
shall mean any Securities interests, liens, encumbrances, pledges, mortgages, conditional or installment sales Contracts, title
retention Contracts, transferability restrictions and other claims or burdens of any nature whatsoever.


 


8.24 “Equity
Line of Credit” shall have the meaning ascribed to such term in Section 6.18.


 


8.25“ERISA”
shall have the meaning set forth in Section 3.15.1.


 


8.26“Escrow
Agreement” shall have the meaning set forth in Section 5.1.11.


 


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


 






    	38



    	 



    

 


8.28“Exempt
Issuance” means the issuance of (a) shares of Common Stock and options to officers, employees, or directors of the
Company prior to and after the Closing Date pursuant to any (i) current stock or option plan previously adopted or (ii) any future
stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority
of the members of a committee of non-employee directors established for such purpose in the amounts and on the terms set forth
on Schedule 8.28, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder, and/or
other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date
of this Agreement, provided that such securities and any term thereof have not been amended since the date of this Agreement to
increase the number of such securities or to decrease the issue price, exercise price, exchange price or conversion price of such
securities and which securities and the principal terms thereof are set forth on Schedule 3.3.2, and described in the SEC
Reports filed not later than ten (10) days before the Closing Date, (c) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be
to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner
of an asset in a business synergistic with the business of the Company and shall be intended to provide to the Company substantial
additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, and
(d) securities issued or issuable pursuant to this Agreement, or the Warrants, including, without limitation, Section 6.14, or
upon exercise or conversion of any such securities.


 


8.29“Exercise
Notice” shall have the meaning set forth in Section 6.12.


 


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


 


8.31“Final
Termination Date” shall have the meaning set forth in Section 2.2.


 


8.32“Financial
Statements” shall have the meaning set forth in Section 3.5.


 


8.33“GAAP”
shall have the meaning ascribed to such term in Section 3.5.


 


8.34“G&M”
shall mean Grushko & Mittman, P.C., with offices located at 515 Rockaway Avenue, Valley Stream, New York 11581, Fax: 212-697-3575.


 


8.35“Governmental
or Regulatory Authority” shall mean any court, tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the government of the United States or of any foreign country, any state or any political subdivision of any
such government (whether state, provincial, county, city, municipal or otherwise).


 


8.36“Hazardous
Substances” shall mean oil and petroleum products, asbestos, polychlorinated biphenyls, urea formaldehyde and any
other materials classified as hazardous or toxic under any Environmental Laws.


 


8.37“Indebtedness”
shall have the meaning set forth in Section 3.45.


 


8.38“Indemnified
Losses” shall mean all losses, Liabilities, obligations, claims, demands, damages, penalties, settlements, causes
of action, costs and expenses arising out of any third party claim or action against an Indemnified Party, including, without limitation,
the actual costs paid in connection with an Indemnified Party’s investigation and evaluation of any claim or right asserted
against such Indemnified Party and all reasonable attorneys’, experts’ and accountants’ fees, expenses and disbursements
and court costs including, without limitation, those incurred in connection with the Indemnified Party’s enforcement of the
indemnification provisions of Section Error! Reference source not found. of this Agreement.


 






    	39



    	 



    

 


8.39“Initial
Closing” shall have the meaning set forth in Section 2.1.


 


8.40“Initial
Closing Date” shall have the meaning set forth in Section 2.1.


 


8.41“Initial
Securities” shall have the meaning set forth in Section 2.1.


 


8.42“Leased
Real Property” shall have the meaning set forth in Section 3.17.


 


8.43“Legal
Proceeding” shall mean any action, suit, arbitration, claim or investigation by or before any Governmental or Regulatory
Authority, any arbitration or alternative dispute resolution panel, or any other legal, administrative or other proceeding.


 


8.44“Liabilities”
shall mean all obligations and liabilities including, without limitation, direct or indirect indebtedness, guaranties, endorsements,
claims, losses, damages, deficiencies, costs, expenses, or responsibilities, in any of the foregoing cases, whether fixed or unfixed,
known or unknown, asserted or unasserted, choate or inchoate, liquidated or unliquidated, or secured or unsecured.


 


8.45“Licensed
Intellectual Property” shall mean all Copyrights, Patents, Trademarks, technology rights and licenses, trade secrets,
know-how, inventions, methods, techniques and other intellectual property the Company has or has the right to use in connection
with its business, as applicable, pursuant to license, sublicense, agreement or permission.


 


8.46“Material
Adverse Effect” shall have the meaning set forth in Section 3.1.


 


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


 


8.48“Order”
shall mean any judgment, order, writ, decree, stipulation, injunction or other determination whatsoever of any Governmental or
Regulatory Authority, arbitrator or any other Person whose finding, ruling or holding is legally binding or is enforceable as a
matter of right (in any case, whether preliminary or final and whether voluntarily imposed or consented to).


 


8.49“Organizational
Documents” shall mean, with respect to any Person, such Person’s articles or certificate of incorporation,
by-laws or other governing or constitutive documents, if any.


 


8.50“Owned
Intellectual Property” shall mean all Copyrights, Patents, Trademarks, technology, trade secrets, know-how, inventions,
methods, techniques and other intellectual property owned by the Company or any of its Subsidiaries.


 


8.51 “Participation
in Future Financing” shall have the meaning ascribed to such term in Section 6.25.


 


8.52“Patents”
shall mean patents and patent applications (including, without limitation, provisional applications, utility applications and design
applications), including, without limitation, reissues, patents of addition, continuations, continuations-in-part, substitutions,
additions, divisionals, renewals, registrations, confirmations, re-examinations, certificates of inventorship, extensions and the
like, any foreign or international equivalent of any of the foregoing, and any domestic or foreign patents or patent applications
claiming priority to any of the above.


 






    	40



    	 



    

 


8.53“Permits”
shall mean all licenses, permits, certificates of authority, authorizations, approvals, registrations, franchises, rights, Orders,
qualifications and similar rights or approvals granted or issued by any Governmental or Regulatory Authority relating to the Business.


 


8.54“Per
Securities Purchase Price” shall have the meaning set forth in Section 1.2.


 


8.55“Person”
shall mean any individual, corporation, partnership, firm, joint venture, association, limited liability company, limited liability
partnership, joint-stock company, trust, unincorporated organization or Governmental or Regulatory Authority.


 


8.56“Placement
Agent” shall mean Garden State Securities, Inc.


 


8.57“Premises”
shall have the meaning set forth in Section 3.20.


 


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


 


8.59“Protection
Period” shall have the meaning ascribed to such term in Section 6.13.


 


8.60“Public
Information Failure” shall have the meaning ascribed to such term in Section 6.10.


 


8.61“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 6.10.


 


8.62“Purchase
Price” shall mean the “Total Purchase Price Amount” set forth in Exhibit A for each respective
Purchaser.


 


8.63“Purchasers”
and “Purchaser” shall have the meaning set forth in the preamble to this Agreement.


 


8.64“Real
Property Leases” shall have the meaning set forth in Section 3.17.


 


8.65"Registration
Rights Agreement” shall have the meaning set forth in Section 5.1.5.


 


8.66 “Regulatory
Approvals” shall mean all Consents from all Governmental or Regulatory Authorities.


 


8.67“Removal
Date” means the date that all of the issued Shares and Warrant Shares have been sold pursuant to Rule 144 or may
be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information requirements
under Rule 144 and without volume or manner-of-sale restrictions.


 


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


 






    	41



    	 



    

 


8.69“Requirement
of Law” shall mean any provision of law, statute, treaty, rule, regulation, ordinance or pronouncement having the
effect of law, and any Order.


 


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


 


8.71“Schedules”
shall have the meaning set forth in the preamble to Section 3.


 


8.72“SEC”
shall mean Securities and Exchange Commission.


 


8.73“SEC
Reports” shall have the meaning ascribed to such term in Section 3.5.


 


8.74“Securities”
shall have the meaning set forth in the preamble of this Agreement.


 


8.75“Securities
Act” shall have the meaning set forth in Section 3.21.


 


8.76“Securities
Laws” means the securities laws of the United States or any state thereof and the rules and regulations promulgated
thereunder.


 


8.77“Share
Dilution Adjustment” shall have the meaning ascribed to such term in Section 4.14.


 


8.78“Share
Dilutive Issuance” shall have the meaning ascribed to such term in Section 4.14.


 


8.79“Shares”
Reserved.


 


8.80“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).


 


8.81“Stock
Option Plan” means the Stock Option Plan of the Company in effect as the date of this Agreement, the principal
terms of which have been disclosed in the SEC Reports.


 


8.82“Subsequent
Closing” shall mean the funding which occurs on the Subsequent Closing Date.


 


8.83“Subsequent
Closing Date” shall have the meaning set forth in Section 2.2.


 


8.84“Subsequent
Closing Purchaser” shall have the meaning set forth in Section Error! Reference source not found..


 


8.85“Subsequent
Securities” shall have the meaning set forth in Section 2.2.


 






    	42



    	 



    

 


8.86“Subsidiaries”
and “Subsidiary” shall mean, with respect to any entity at any date, any direct
or indirect corporation, limited or general partnership, limited liability company, trust, estate, association, joint venture or
other business entity of which (A) more than 30% of (i) the outstanding capital stock having (in the absence of contingencies)
ordinary voting power to elect a majority of the board of directors or other managing body of such entity, (ii) in the case
of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability
company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such
trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly
through one or more intermediaries, by such entity, or (B) is under the actual control of the Company.


 


8.87“Suppliers”
shall have the meaning set forth in Section 3.17.2.


 


8.88“Surrendered
Shares” shall have the meaning set forth in Section 5.1.11.


 


8.89“Tax
Returns” shall mean any declaration, return, report, estimate, information return, schedule, statements or other
document filed or required to be filed in connection with the calculation, assessment or collection of any Taxes or, when none
is required to be filed with a taxing authority, the statement or other document issued by, a taxing authority.


 


8.90“Taxes”
shall mean (i) any tax, charge, fee, levy or other assessment including, without limitation, any net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, payroll, employment, social Securities, unemployment,
excise, estimated, stamp, occupancy, occupation, property or other similar taxes, including any interest or penalties thereon,
and additions to tax or additional amounts imposed by any federal, state, local or foreign Governmental or Regulatory Authority,
domestic or foreign or (ii) any Liability for the payment of any taxes, interest, penalty, addition to tax or like additional
amount resulting from the application of Treasury Regulation §1.1502-6 or comparable Requirement of Law.


 





8.91“Termination
Date” shall have the meaning ascribed to such term in Section 2.1.


 


8.92“Trademarks”
shall mean trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade
styles, uniform resource locators (URLs), domain names, trade dress, any other names and locators associated with the Internet,
other source of business identifiers, whether registered or unregistered and whether or not currently in use, and registrations,
applications to register and all of the goodwill of the business related to the foregoing.


 


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


 


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


 






    	43



    	 



    

 


8.95“Transaction
Documents” shall mean this Agreement, the Warrant, the Registration Rights Agreement and all other documents, certificates
and instruments executed and delivered at any Closing.


 


8.96“Transfer
Agent” means VStock Transfer, LLC, with offices located at 77 Spruce Street, Suite 201, Cedarhurst, New York 11516,
and any successor transfer agent of the Company.


 


8.97“Variable
Priced Equity Linked Instruments” shall have the meaning ascribed to such term in Section 6.18.


 


8.98“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 6.18.


 


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


 


8.100“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at any Closing in the form of Exhibit B
attached hereto.


 


8.101“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants,
provided that any share of Common Stock issued upon exercise of the Warrants shall not constitute an issued Warrant Share for purposes
of this Agreement after such share has been irrevocably sold pursuant to an effective registration statement under the Securities
Act or pursuant to Rule 144 without further restrictions or conditions to transfer pursuant to Rule 144.


 


[SIGNATURES
ON FOLLOWING PAGES]


 






    	44



    	 



    




 


IN WITNESS WHEREOF, the parties
hereto have executed this Securities Purchase Agreement as of June 12, 2014.


 





	COMPANY:

                                                                                                  

                                                                                                 NXT-ID,
                                         INC.

                                                                                                  
	
	By:
    		 
	Name:	Gino
                                         Pereira
	 
	Title:	Chief
                                         Executive Officer

        
	 
	Address:
	One
                                         Reservoir Corporate Centre
	 
	
	4
                                         Research Drive, Suite 402

        
	 
	

        
	Shelton,
                                         CT 06484.

        
	 
	Tel:	(203)
                                         242-3076

        
	 
	

        Fax:
	______________
	 
	email:	gino@nxt-id.com	 







 





[SIGNATURE PAGE OF PURCHASERS FOLLOWS]


 






    	45



    	 



    

 





[SIGNATURE
PAGE OF PURCHASERS TO SPA]


 





	Name
    of Purchaser:		 
	 	 	 
	Signature
    of Authorized Signatory of Purchaser:		 
	 	 	 
	Name
    of Authorized Signatory:		 
	 	 	 
	Title
    of Authorized Signatory:		 







 





			







    	46



    	 



    




 


EXHIBIT A



SCHEDULE OF PURCHASERS


 


Initial Closing


 


	Name
    of Purchaser	 	Warrants	 	Warrant
    Shares	 	Total
    Purchase

    Price Amount
	 	 	 	 	 	 	$
	
         
	 	 	 	 	 	TOTAL: $


 





Subsequent Closing



 





	Name of Subsequent Closing
    Purchaser	 	Warrants	 	Warrant Shares	 	Total Purchase

    Price Amount
	 	 	 	 	 	 	TOTAL: $


 



    	 



    	 



    

 


EXHIBIT B


 


Form
of Warrant