Exhibit 10.1


 


SECURITIES PURCHASE AGREEMENT


 


This Securities Purchase
Agreement (this “Agreement”) is dated as of November 23, 2015 between Applied DNA Sciences, Inc., a Delaware corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns,
a “Purchaser” and collectively the “Purchasers”).


 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to (i) one or more effective registration statements under the
Securities Act of 1933, as amended (the “Securities Act”), including a registration statement pursuant to Rule 462(b)
under the Securities Act and (ii) an exemption from the registration requirements of Section 5 of the Securities Act contained
in Section 4(a)(2) thereof and/or Regulation D thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.


 


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


 


Article
I

DEFINITIONS


 


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


 


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


 


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


 


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


 


“Applicable Time”
means 9:00 a.m. (New York time) on the date of this Agreement.


 


“Anti-Bribery
Laws” shall have the meaning ascribed to such term in Section 3.1(tt).


 


“Applicable Regulatory
Laws” shall have the meaning ascribed to such term in Section 3.1(bb).


 


“Audit Committee”
shall have the meaning ascribed to such term in Section 3.1(ii).


 


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


 


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


 


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


 


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


 


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


 


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


 




    	 	1	 



     

    

  


“Closing Date”
means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto,
and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Shares and the Warrants, in each case, have been satisfied or waived, but in no event later than the
third Trading Day following the date hereof.


 


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


 


“Common Stock”
means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities
may hereafter be reclassified or changed.


 


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


 


“Company Counsel”
means Pepper Hamilton, with offices located at 620 Eighth Avenue, 37th Floor, New York, New York 10018.


 


“Confidential
Information” shall have the meaning ascribed to such term in Section 3.1(dd).


 


“Critical Accounting
Policies” shall have the meaning ascribed to such term in Section 3.1(t).


 


“Debt Repayment
Triggering Event” shall have the meaning ascribed to such term in Section 3.1(i).


 


“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently herewith.


 


“Disqualification
Event” shall have the meaning ascribed to such term in Section 3.1(ggg).


 


“DVP” shall
have the meaning ascribed to such term in Section 2.1.


 


“DWAC”
shall have the meaning ascribed to such term in Section 2.2(a)(iii).


 


“Effective Date”
shall have the meaning ascribed to such term in Section 4.1(d).


 


“Effective Time”
of the Registration Statement relating to the Shares means the time of the first contract of sale for the Shares.


 


“8-K Filing”
shall have the meaning ascribed to such term in Section 4.4.


 


“Environmental
Law” shall have the meaning ascribed to such term in Section 3.1(zz).


 


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


 


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


 


“Exchange Act
Reports” shall have the meaning ascribed to such term in Section 3.1(d).


 


“Exchange Rules”
shall mean the listing rules of The Nasdaq Stock Exchange Inc.


 




    	 	2	 



     

    

  


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


 


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


 


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


 


“430B Information”
means information included in a prospectus then deemed to be a part of the Registration Statement pursuant to Rule 430B(e) or retroactively
deemed to be a part of the Registration Statement pursuant to Rule 430B(f).


 


“430C Information”
means information included in a prospectus then deemed to be a part of the Registration Statement pursuant to Rule 430C.


 


“General Disclosure
Package” shall have the meaning ascribed to such term in Section 3.1(d).


 


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


 


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


 


“Hazardous Materials”
shall have the meaning ascribed to such term in Section 3.1(zz).


 


“HSE” means
Harter Secrest & Emery LLP, counsel to the Placement Agent, with offices at 1600 Bausch and Lomb Place, Rochester, New York,
14604.


 


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


 


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


 


“Issuer Covered
Person” shall have the meaning ascribed to such term in Section 3.1(ggg).


 


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


 


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


 


“Lock-Up Securities”
shall have the meaning ascribed to such term in Section 4.12.


 


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


 


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


 


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


 


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


 




    	 	3	 



     

    

  


“Pending Patents”
shall have the meaning ascribed to such term in Section 3.1(ee).


 


“Per Share Purchase
Price” equals $3.50, 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.


 


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


 


“Placement Agent”
means Maxim Group LLC.


 


“Placement Agency
Agreement” means that certain placement agency agreement, of even date herewith, between the Company and the Placement Agent,
pursuant to which the Placement Agent will act as placement agent with respect to the offering of Securities.


 


“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.


 


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


 


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


 


“Registration
Statement” means the effective registration statement with Commission file No. 333-202432, (including any registration statement
on Form S-3 filed pursuant to Rule 462(b) of the Securities Act for purposes of registering additional Shares) which registers
the sale of the Shares to the Purchasers.


 


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


 


“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.


 


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


 


“Rules and Regulations”
means the rules and regulations of the Commission.


 


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


 


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


 


“Securities”
means the Shares, the Warrants and the Warrant Shares.


 


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


 


“Securities Laws”
means, collectively, the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”), the Securities Act, the Exchange
Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of “issuers”
(as defined in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board, the Exchange Rules and
applicable state securities laws and regulations.


 




    	 	4	 



     

    

  


“Shares”
means the shares of Common Stock issued to each Purchaser pursuant to this Agreement in the number as specified below such Purchaser’s
name on such Purchaser’s signature page of this Agreement and next to the heading “Shares.” For the avoidance
of doubt, the “Shares” shall not include any shares of Common Stock issuable upon exercise of the Warrants.


 


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


 


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


 


“Subsidiary”
means any subsidiary of the Company as set forth in the Disclosure Schedules and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof.


 


“Time of Sale
Prospectus” shall have the meaning ascribed to such term in Section 3.1(a).


 


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


 


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


 


“Transaction
Documents” means this Agreement, the Warrants and any other documents or agreements executed between the Company and the
Purchasers in connection with the transactions contemplated hereunder.


 


“Transfer Agent”
means American Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address of 6201 15th
Avenue, Brooklyn, New York 11219, and any successor transfer agent of the Company.


 


“Variable Rate
Transaction” shall have the meaning ascribed to such term in Section 4.12(b).


 


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


 


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


 


Article
II


PURCHASE
AND SALE


 


2.1         Closing.
On the Closing Date, on the basis of the representations, warranties and agreements contained herein and subject to the terms and
conditions set forth herein, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to
an aggregate of $2,500,000 of Shares and Warrants. Each Purchaser shall deliver to the Placement Agent, via wire transfer or a
certified check, immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the signature
page hereto executed by such Purchaser and the Company shall deliver to each Purchaser its respective Shares and a Warrant as determined
pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable
at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at
the offices of HSE or such other location as the parties shall mutually agree. Unless otherwise agreed upon by the Company and
the Placement Agent, settlement of the Shares shall occur via “Delivery Versus Payment” (“DVP”) pursuant
to which, on the Closing Date, the Company shall issue the Shares registered in the Purchasers’ names and addresses and released
by the Transfer Agent directly to the account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares,
the Placement Agent shall promptly electronically deliver such Shares to the applicable Purchaser, and payment therefor shall be
made by the Placement Agent (or its clearing firm) by wire transfer to the Company.


 




    	 	5	 



     

    

  


2.2         Deliveries.


 


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


 


(i)          this
Agreement duly executed by the Company;


 


(ii)         legal
opinions addressed to the Purchasers, each in a form reasonably satisfactory to such Purchasers, of (A) Company Counsel, (B) intellectual
property counsel to the Company, and (C) British Virgin Islands counsel to the Company.


 


(iii)        subject
to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent
to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”)
the number of Shares as specified below such Purchaser’s name on such Purchaser’s signature page of this Agreement
and next to the heading “Shares,” registered in the name of such Purchaser;


 


(iv)        a
Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 50% of such Purchaser’s
Shares, with an exercise price equal to $4.30 per share, subject to adjustment therein (such Warrant certificate may be delivered
within three Trading Days of the Closing Date); and


 


(v)         the
Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act) shall have been filed with the Commission
to cover the sale of the Shares hereunder in accordance with the Rules and Regulations. No stop order suspending the effectiveness
of the Registration Statement or of any respective part thereof shall have been issued and no Proceeding for that purpose shall
have been instituted or, to the knowledge of the Company or the Placement Agent, shall have been contemplated by the Commission.


 


(b)          As
of the Closing Date, the Placement Agent shall have received the following:


 


(i)          letters,
dated as of the Closing Date, of each of Marcum LLP and RBSM LLP in form and substance satisfactory to the Placement Agent, containing
statements and information of the type ordinarily included in accountants’ “comfort letters” to placement agents
with respect to the financial statements and certain financial information contained in the Registration Statement, the General
Disclosure Package and the Prospectus;


 


(ii)         a
certificate, dated as of the Closing Date, of the chief executive officer and chief financial officer of the Company to the effect
that: (i) the representations, warranties and agreements of the Company in this Agreement were true and correct when made and are
true and correct as of such Closing Date; (ii) the Company has performed in all material respects all covenants and agreements
and satisfied all conditions contained herein; (iii) they have carefully examined the Registration Statement, the Prospectus, the
General Disclosure Package, and any individual Issuer-Represented Free Writing Prospectus and, in their opinion (A) as of each
Closing Date, neither (i) the General Disclosure Package, nor (ii) any individual Issuer-Represented Free Writing Prospectus, when
considered together with the General Disclosure Package, included, any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (B) since the Effective Date no event has occurred which should have been set forth
in a supplement or otherwise required an amendment to the Registration Statement, the General Disclosure Package or the Prospectus;
(iv) no stop order suspending the effectiveness of the Registration Statement has been issued and, to their knowledge, no proceedings
for that purpose have been instituted or are pending under the Securities Act; and (v) there has not occurred any Material Adverse
Effect or any event that is likely to result in a Material Adverse Effect, whether or not arising from transactions in the ordinary
course of business; and


 




    	 	6	 



     

    

  


(iii)        such
other opinions, certificates, letters and documents as the Placement Agent reasonably requests. The Placement Agent may in its
sole discretion waive compliance with any conditions to the obligations of the Placement Agent hereunder.


 


(c)          On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company or the Placement Agent, as applicable,
the following:


 


(i)          this
Agreement duly executed by such Purchaser; and


 


(ii)         subject
to the last sentence of Section 2.1, to the Placement Agent, such Purchaser’s Subscription Amount by wire transfer to the
account directed by the Placement Agent.


 


2.3         Closing
Conditions.


 


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


 


(i)          the
accuracy when made and on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as
of a specific date therein in which case they shall be accurate as of such date);


 


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


 


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


 


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


 


(i)          the
accuracy when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they will be accurate as of such date);


 


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


 


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


 


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


 


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


 




    	 	7	 



     

    

  


Article
III


REPRESENTATIONS
AND WARRANTIES


 


3.1         Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules delivered by the Company to Purchaser
on the date of this Agreement or, where indicated, the SEC Reports, the Company hereby represents and warrants to the Purchasers
as of the date of this Agreement and as of the date of the Closing as set forth below:


 


(a)          Registration
Statements and Prospectuses. The Company has filed with the Commission the Registration Statement and such amendments to
such Registration Statement as may have been required to the date of this Agreement, covering the registration of the Shares under
the Securities Act, which has been declared effective by the Commission under the Securities Act. “Registration Statement”
at any particular time means such registration statement in the form then filed with the Commission, including any amendment thereto
and any registration statement filed for the purpose of registering additional shares pursuant to Rule 462(b) of the Securities
Act, any document incorporated by reference therein and all 430B Information and all 430C Information with respect to such registration
statement, that in any case has not been superseded or modified. For purposes of this definition, 430B Information shall be considered
to be included in the Registration Statement as of the time specified in Rule 430B. The Commission has not issued any order preventing
or suspending the use of any preliminary prospectus or the Prospectus or suspending the effectiveness of the Registration Statement
and no Proceedings or examination for such purpose are pending before or, to the knowledge of the Company, threatened by the Commission.
The prospectus in the form in which it appeared in the Registration Statement at the Effective Time is herein called the “Base
Prospectus.” Each preliminary prospectus supplement to the Base Prospectus (including the Base Prospectus as so supplemented)
that described the Shares and the offering thereof, that omitted the Rule 430B Information and that was distributed to investors
prior to the Applicable Time is herein called a “Time of Sale Prospectus.” Promptly after the execution and delivery
of this Agreement, the Company will prepare and file with the Commission a final prospectus supplement to the Base Prospectus relating
to the Shares and the offering thereof in accordance with the provisions of Rule 430B and Rule 424(b) of the Rules and Regulations.
Such final supplemental form of prospectus (including the Base Prospectus as so supplemented), in the form filed with the Commission
pursuant to Rule 424(b) under the Securities Act is herein called the “Prospectus.” Any reference herein to the Base
Prospectus, the Time of Sale Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein as of the date of such prospectus.


 


(b)          Compliance
with Registration Requirements. (i) (A) At the time the Registration Statement initially became effective, (B) at the time
of each amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether by post-effective
amendment, incorporated report or form of prospectus), (C) at the Effective Time relating to the Shares and (D) on the Closing
Date, the Registration Statement conformed and will conform in all material respects to the requirements of the Securities Act
and the Rules and Regulations and (ii) (A) on its date, (b) at the time of filing the Prospectus pursuant to Rule 424(b) and (C)
on the Closing Date, the Prospectus will conform in all respects to the requirements of the Securities Act and the Rules and Regulations.
The date of this Agreement is not more than three years subsequent to the initial effective time of the Registration Statement.


 


(c)          Ineligible
Issuer. (i) At the earliest time after the filing of the Registration Statement that the Company made a bona fide offer
(within the meaning of Rule 164(h)(2)) of the Shares and (ii) at the date of this Agreement, the Company was not an “ineligible
issuer”, except as may result from the non-timely filing of the Form 8-K/A required in connection with the filing of the
historical financial statements pertaining to the acquisition of Vandalia Research, Inc., as defined in Rule 405, including (x)
the Company or any other subsidiary in the preceding three years not having been convicted of a felony or misdemeanor or having
been made the subject of a judicial or administrative decree or order as described in Rule 405 and (y) the Company in the preceding
three years not having been the subject of a bankruptcy petition or insolvency or similar Proceeding, not having had a registration
statement be the subject of a Proceeding under Section 8 of the Securities Act and no being the subject of a Proceeding under Section
8A of the Securities Act in connection with the offering of the Offered Securities, all as described in Rule 405.


 




    	 	8	 



     

    

  


(d)          Accurate
Disclosure. As of the Applicable Time, neither the Time of Sale Prospectus, including any documents incorporated by reference
therein, nor the other information or materials distributed to prospective investors, if any, stated in Schedule B to this Agreement
to be included in the General Disclosure Package, all considered together (collectively, the “General Disclosure Package”)
included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements
in or omissions from the General Disclosure Package in reliance upon or in conformity with written information furnished to the
Company by the Placement Agent specifically for use therein. Each part of the General Disclosure Package, as of its issue date
and at all subsequent times through the completion of the public offer and sale of the Shares or until any earlier date that the
Company notified or notifies the Placement Agent as described in the next sentence, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement. If at
any time following the issuance of a part of the General Disclosure Package there occurred or occurs an event or development as
a result of which such part of the General Disclosure Package conflicted or would conflict with the information then contained
in the Registration Statement or as a result of which such part of the General Disclosure Package, if republished immediately following
such event or development, would include an untrue statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, (i)
the Company has promptly notified or will promptly notify the Placement Agent and (ii) the Company has promptly amended or will
promptly amend or supplement such part of the General Disclosure Package to eliminate or correct such conflict, untrue statement
or omission.


 


Any reference to the
General Disclosure Package or the Prospectus shall be deemed to refer to and include (i) the Company’s Annual Report on Form
10-K filed with the Commission on December 14, 2014, as amended on March 6, 2015 (the “Annual Report”), (ii) the Company’s
Proxy Statement on Schedule 14A filed with the Commission on May 6, 2015, (iii) the Company’s Quarterly Reports on Form 10-Q
filed February 9, 2015, May 11, 2015 and August 10, 2015 (the “Quarterly Reports”) and any other documents filed under
the Exchange Act and deemed to be incorporated by reference into the Registration Statement or the Prospectus or that so indicate
they are being incorporated by reference into the General Disclosure Package or the Prospectus, as the case may be, or that are
expressly incorporated by reference into the General Disclosure Package pursuant to the Prospectus, or any amendment or supplement
thereto. All documents filed under the Exchange Act and so deemed to be included in the General Disclosure Package or the Prospectus,
as the case may be, or any amendment or supplement thereto are hereinafter called the “Exchange Act Reports”. With
the exception of the Form 8-K/A required in connection with the filing of the historical financial statements pertaining to the
acquisition of Vandalia Research, Inc., the Exchange Act Reports, when they were or are filed with the Commission, conformed or
will conform in all material respects to the applicable requirements of the Exchange Act and the applicable rules and regulations
of the Commission thereunder.


 


(e)          Subsidiaries.
Except as set forth in the Disclosure Schedules or the SEC Reports, there are no direct or indirect subsidiaries of the Company.
The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear
of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.


 


(f)          Organization
and Qualification. The Company is an entity duly incorporated and validly existing under the laws of Delaware and of each
other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, with the
requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted as described
in the General Disclosure Package and the Prospectus, 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 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”) or except as set forth in the Disclosure Schedule. The Subsidiaries are entities
duly incorporated or otherwise organized and validly existing under the laws of the jurisdictions set forth in the Disclosure Schedule.
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 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.


 




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(g)          Dividends.
No Subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which
it is a party or is subject, from paying any dividends to its shareholders, from making any other distribution on such subsidiary’s
issued share capital, from repaying to the Company or any other Subsidiary of the Company any loans or advances to such subsidiary
from the Company or such other Subsidiary or from transferring any of such Subsidiary’s properties or assets to any of the
Company or other Subsidiary.


 


(h)          Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, assuming due authorization, execution and delivery by the other parties hereto, will
constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law. The General Disclosure Package and the Prospectus have been duly authorized by and on behalf
of the Company.


 


(i)           No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents
to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and the use of proceeds as described in the General Disclosure Package and the Prospectus, after giving effect, to the extent applicable,
to consents or waivers with respect thereto in full force and effect as of the Closing, will not result in a material breach or
violation of any of the terms and provisions of, or constitute and default or a Debt Repayment Triggering Event (as defined below)
under, or result in the imposition of any material lien, charge, encumbrance or defect upon any property or assets of any of the
Company or a Subsidiary, under (i) its charter, memorandum and articles of association, bylaws or equivalent organizational or
constitutive documents of any of the Company or a Subsidiary, (ii) any statute, rule, regulation or order of any Governmental Authority
having jurisdiction over any of the Company or a Subsidiary or any of their properties, (iii) to the Company’s knowledge,
any approval, consent, waiver, authorization, exemption, permission, endorsement or license granted by any Governmental Authority
in the British Virgin Islands, the United States or any other jurisdiction where the Company or any Subsidiary was incorporated
or operates, or (iv) any agreement or instrument (including each of the Transaction Documents) to which any of the Company or a
Subsidiary is a party or by which any of the Company or a Subsidiary is bound or to which any of the properties of any of the Company
or a Subsidiary is subject. A “Debt Repayment Triggering Event” means any event or condition that gives, or with the
giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of Indebtedness (or any Person
acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such
Indebtedness by any of the Company or a Subsidiary.


 




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(j)           Filings,
Consents and Approvals. Except as set forth in the Disclosure Schedules, the Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration with, any Governmental Authority or any
court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery
and performance by the Company of the Transaction Documents or the offer, issue and sale of the Securities, the issuance of Warrant
Shares, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of
the Prospectus and the Company’s additional registration statement on Form S-3 pursuant to Rule 462(b) under the Securities
Act, (iii) application(s) to each applicable Trading Market for the listing of the Shares for trading thereon in the time and manner
required thereby, (iv) the filing of Form D with the Commission and such notices and other filings as are required to be made under
applicable state securities and blue sky laws before or after the Closing, and (v) such consents, waivers and authorizations that
shall be obtained prior to the Closing (collectively, the “Required Approvals”).


 


(k)          Authorization
of the Securities; Registration. The Shares and Warrants to be sold by the Company and their issue and sale and the underlying
Shares and their issue 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 free and clear of all Liens imposed by the Company. No holder of any of the Securities
when issued and fully paid is or will be subject to any personal liability in respect of any liability of the Company by virtue
only of its holding of any such Securities; and except as set forth in the General Disclosure Package and Prospectus, there are
no limitations on the rights of holders of the Securities to hold or transfer their securities.


 


(l)           Stamp
Tax. To the Company’s knowledge, no stamp or other issuance or transfer taxes or duties are payable by or on behalf
of the Placement Agent or any investor to the government of the United States or any political subdivision or taxing authority
thereof or therein in connection with (i) the sale and delivery by the Company of the Securities to or for the account of any investor
and (ii) the execution and delivery of the Transaction Documents, in each case other than income tax that is imposed on the Placement
Agent or investor’s net income in the ordinary course of business and the New York state stamp tax.


 


(m)         Capitalization.
The Company has an issued and fully paid up capital as set forth in the Disclosure Schedules, and all of the issued share capital
of the Company has been duly and validly authorized and issued, is fully paid and conforms to the description of the Common Stock
contained in the General Disclosure Package and the Prospectus. All of the issued share capital of each Subsidiary have been duly
and validly authorized and issued, and are fully paid in accordance with its articles of incorporation, articles of association
or applicable foreign, federal, state and local laws, including, without limitation, the corporate law of the jurisdiction of the
Company’s incorporation, and are nonassessable, if applicable. Except as set forth in the Disclosure Schedules, all of the
issued share capital or equity interest, as the case may be, of each Subsidiary is owned directly or indirectly by the Company,
free and clear of all Liens, equities or claims. Except as set forth in the Disclosure Schedules, the holders of outstanding shares
of Common Stock are not entitled to preemptive or other rights to acquire the Securities. The Company has not issued any capital
stock since its most recently filed periodic report under the Exchange Act, other than (i) pursuant to the exercise of employee
stock options under the Company’s equity incentive plans, (ii) the issuance of shares of Common Stock to employees pursuant
to the Company’s employee stock purchase plans and (iii) pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the Exchange Act. Except as set forth in the Disclosure
Schedules, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents. Except as set forth in in the Disclosure Schedules and the SEC Reports,
there are no outstanding options (other than options issued pursuant to any employees or directors of the Company), warrants, scrip
rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or warrants, rights or options to purchase from the Company, or obligations of the Company
to issue, shares of Common Stock or any other class of share capital of the Company. There are no restrictions on subsequent transfers
of the Shares under the laws of the United States except as set forth in the General Disclosure Package and the Prospectus or giving
any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.
Except as set forth in the Disclosure Schedules, the issuance and sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding
shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance
in all material respects with all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any
stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. Except as set forth in the
Disclosure Schedules, there are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s
stockholders.


 




    	 	11	 



     

    

  


(n)          SEC
Reports. Except as set forth in the Disclosure Schedule, the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law
or regulation to file such material) (the foregoing materials, including the exhibits thereto, documents incorporated by reference
therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. Except as set forth in
the Disclosure Schedule, as of their respective dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, 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 the light of the circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. Without prejudice to the generality
of anything contained herein, all the operating information and data included in the General Disclosure Package and the Prospectus
were true and accurate in all material respects as of the respective issue date and will be true and accurate in all material respects
on the Closing Date. Any statistical, industry-related and market-related data included in the General Disclosure Package and the
Prospectus are based on or derived from sources that the Company believes to be reliable and accurate, and, to the Company’s
knowledge, the Company has obtained written consent for the use of such data from such sources to the extent required.


 


(o)          Termination
of Contracts. None of the Company or any Subsidiary has sent or received any communications regarding termination of, or
intent not to renew, any of the contracts or agreements referred to or described in the General Disclosure Package and the Prospectus,
and no such termination or non-renewal has been threatened by the Company or any Subsidiary or any other party to such contract
or agreement.


 


(p)          Financial
Statements. The financial statements included in the Registration Statement, the General Disclosure Package and the Prospectus,
together with the related notes, present fairly the financial position of the Company and its consolidated Subsidiaries at the
dates indicated and the statement of operations, shareholders’ equity and cash flows of the Company and its consolidated
Subsidiaries for the periods specified. Said financial statements have been prepared in conformity with GAAP applied on a consistent
basis throughout the periods involved except as may be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes required by GAAP.


 


(q)          Additional
Material Liabilities. Since the date of the latest audited financial statements included in the General Disclosure Package
and the Prospectus, neither the Company nor a Subsidiary has (i) except in the ordinary course of business, entered into or assumed
any contract, (ii) except in the ordinary course of business, incurred or agreed to incur any liability (including any contingent
liability) or other obligation, (iii) acquired or disposed of or agreed to acquire or dispose of any business or any other asset
or (iv) except in the ordinary course of business, assumed or acquired or agreed to assume or acquire any liabilities (including
contingent liabilities), that would, in any of clauses (i) through (iv) above, be material to the Company and/or a Subsidiary and
that are not otherwise described in the General Disclosure Package and Prospectus.


 


(r)           The
sections in the Annual Report and Quarterly Reports entitled “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in the General Disclosure Package and Prospectus is accurate in all material respects. The Company
does not have any off-balance sheet transactions, arrangements, and obligations, including, without limitation, relationships with
unconsolidated entities that are contractually limited to narrow activities that facilitate the transfer of or access to assets
by the Company or a Subsidiary, such as structured finance entities and special purpose entities that are reasonably likely to
have a material effect on the liquidity of the Company or any Subsidiary.


 




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(s)          The
sections in the Annual Report and Quarterly Reports under “Management’s Discussion and Analysis of Financial Condition
and Results of Operations—Critical Accounting Policies” in the General Disclosure Package and the Prospectus truly,
fairly and accurately in all material respects describes (i) accounting policies which the Company believes are the most important
in the portrayal of the Company’s financial condition and results of operations and which require management’s most
difficult, subjective or complex judgments (“Critical Accounting Policies”), (ii) judgments and uncertainties affecting
the application of Critical Accounting Policies and (iii) the likelihood that materially different amounts would be reported under
different conditions or using different assumptions; and the Company’s board of directors and management have reviewed and
agreed with the selection, application and disclosure of Critical Accounting Policies and have consulted with legal counsel and
independent accountants with regard to such disclosure.


 


(t)           The
statements set forth in the General Disclosure Package and the Prospectus under the captions “Descriptions of the Securities
We May Offer,” “Description of Common Stock,” “Indemnification For Securities Act Liabilities,” “Prospectus
Supplement Summary,” and “Risk Factors,” insofar as they purport to describe the provisions of the laws and documents
referred to therein, constitute accurate, complete and fair summaries regarding the matters described therein in all material respects.
The statements set forth in the Annual Report under the captions “Item 1. Business—Governmental and Environmental Regulation,”
“Item 6. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and
Capital Resources,” “Item 10. Directors, Executive Officers and Corporate Governance,” and “Item 11. Executive
Compensation,” insofar as such statements summarize legal matters, agreements, documents or Proceedings discussed therein,
are true and accurate summaries of such matters described therein in all material respects.


 


(u)          [Reserved.]


 


(v)          Use
of Proceeds. The application of the net proceeds from the offering of the Securities, as described in Section 4.7 or in
the General Disclosure Package and the Prospectus, will not contravene any provision of any current and applicable laws or the
applicable constituent documents of any of the Company or a Subsidiary or contravene the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement, note, lease or other agreement or instrument currently
binding upon any of the Company or a Subsidiary or any governmental or regulatory authorization applicable to any of the Company
or a Subsidiary.


 


(w)         Material
Changes; Undisclosed Events, Liabilities or Developments. None of the Company or its Subsidiaries has sustained, since
the date of the latest audited financial statements included in the General Disclosure Package and the Prospectus, any material
loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, except as set forth in the Disclosure Schedules. Since the
respective dates as of which information is given in the General Disclosure Package and the Prospectus, (i) there has been no event,
occurrence or development that has had or that would reasonably be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred
in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method
of accounting, (iv) there has not been any change in the capitalization or short-term or long-term debt of the Company or any Subsidiary,
other than repayments of debt in accordance with the terms thereof, and neither the Company nor any Subsidiary has declared or
made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to any officer, director
or Affiliate, except pursuant to existing Company stock incentive plans. Except as may be set forth in the Disclosure Schedules,
the Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance
of the Securities contemplated by this Agreement, there has been no material adverse change and no other event, liability, fact,
circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the
Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition, whether
or not arising in the ordinary course of business, that would be required to be disclosed by the Company under applicable Securities
Laws at the time this representation is made or deemed made that has not been publicly disclosed at least one Trading Day prior
to the date that this representation is made.


 




    	 	13	 



     

    

  


(x)           Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. To
the knowledge of the Company, neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject
of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.


 


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


 


(z)          Compliance.
None of the Company or any Subsidiary is (i) in material breach of or in default under any laws, regulations, rules, orders, decrees,
guidelines or notices of the United States or any other jurisdiction where it was incorporated or operates, (ii) in material breach
of or in default under any approval, consent, waiver, authorization, exemption, permission, endorsement or license granted by any
court or governmental agency or body or any stock exchange authorities (each a “Governmental Authority”) in the United
States or any other jurisdiction in which it was incorporated or operates, (iii) in violation of its constituent documents or (iv)
in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties
may be bound except, with respect to clause (iv), where any default would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.


 




    	 	14	 



     

    

  


(aa)        Regulatory
Matters. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, the Company
and each of its subsidiaries: (A) are and at all times have been in material compliance with all applicable statutes, rules and
regulations governing the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling,
promotion, sale, offer for sale, storage, import, export or disposal of any product sold, under development, manufactured or distributed
by the Company or any subsidiary (“Applicable Regulatory Laws”); (B) have not received any correspondence or written
notice from any other federal, state, local, national or foreign governmental or regulatory authority alleging or asserting material
noncompliance with any Applicable Regulatory Laws or any licenses, certificates, approvals, clearances, authorizations, permits
and supplements or amendments thereto required by any such Applicable Regulatory Laws (“Authorizations”); (C) possess
all material Authorizations and such Authorizations are valid and in full force and effect and neither the Company nor any subsidiary
is in material violation of any term of any such Authorizations; (D) have not received written notice of any Proceeding, hearing,
enforcement, investigation, arbitration or other action from any federal, state, local, national or foreign governmental or regulatory
authority or third party alleging that any product, operation or activity is in material violation of any Applicable Regulatory
Laws or Authorizations and has no knowledge that any federal, state, local, national or foreign governmental or regulatory authority
or third party is considering any such Proceeding; (E) have not received written notice that any federal, state, local, national
or foreign governmental or regulatory authority has taken, is taking or intends to take action to limit, suspend, modify or revoke
any material Authorizations and has no knowledge that any other federal, state, local, national or foreign governmental or regulatory
authority has threatened such action; and (F) have filed, obtained, maintained or submitted all reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments as required by any Applicable Regulatory Laws or Authorizations
except where the failure to file such reports, documents, forms, notices, applications, records, claims, submissions and supplements
or amendments would not result in a material adverse effect on the Company and its subsidiaries, taken as a whole, and that all
such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were materially
complete and correct on the date filed (or were corrected or supplemented by a subsequent submission).


 


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


 


(cc)        Intellectual
Property. The Company and each Subsidiary owns, possesses, licenses or has other rights to use the patents and patent applications,
copyrights, trademarks, service marks, trade names, Internet domain names, technology, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary rights) and other intellectual property necessary or used in any material respect to
conduct its business in the manner in which it is being conducted and in the manner in which it is contemplated as set forth in
the General Disclosure Package and the Prospectus (collectively, the “Intellectual Property”). To the knowledge of
the Company, none of the Intellectual Property is unenforceable or invalid; none of the Company or any Subsidiary has received
any notice of violation or conflict with (and none of the Company or a Subsidiary knows of any basis for violation or conflict
with) rights of others with respect to the Intellectual Property; there are no pending or, to the Company’s knowledge, threatened
Proceedings or claims by others that allege any of the Company or a Subsidiary is infringing any patent, trade secret, trademark,
service mark, copyright or other intellectual property or proprietary right. To the knowledge of the Company, the discoveries,
inventions, products or processes of the Company or a Subsidiary referenced in the General Disclosure Package and the Prospectus
do not violate or conflict with any intellectual property or proprietary right of any third Person, or any discovery, invention,
product or process that is the subject of a patent application filed by any third Person; no officer, director or employee of any
of the Company or a Subsidiary is in or has ever been in violation of any term of any patent non-disclosure agreement, invention
assignment agreement, or similar agreement relating to the protection, ownership, development use or transfer of the Intellectual
Property or, to the Company’s knowledge, any other intellectual property, except where any violation would not, individually
or in the aggregate, have a Material Adverse Effect. None of the Company or any Subsidiary are in breach of, and have complied
in all material respects with all terms of, any license or other agreement relating to the Intellectual Property. There are no
contracts or other documents related to the Intellectual Property required to be described in or filed as an exhibit to the General
Disclosure Package and the Prospectus other than those described in or filed as an exhibit to the General Disclosure Package and
the Prospectus. Except as disclosed in the General Disclosure Package and the Prospectus, none of the Company or a Subsidiary is
subject to any non-competition or other similar restrictions or arrangements relating to any business or service anywhere in the
world. The Company and each Subsidiary has taken all necessary and appropriate steps to protect and preserve the confidentiality
of applicable Intellectual Property (“Confidential Information”). All use or disclosure of Confidential Information
owned by the Company or a Subsidiary by or to a third party has been pursuant to a written agreement between the Company and/or
Subsidiary and such third party. All use or disclosure of Confidential Information not owned by the Company or a Subsidiary has
been pursuant to the terms of a written agreement between the Company and/or Subsidiary and the owner of such Confidential Information,
or is otherwise lawful.


 




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(dd)       Patents.
The pending patent applications set forth in the General Disclosure Package and the Prospectus (the “Pending Patents”)
are being diligently prosecuted by the Company and/or Subsidiaries. To the Company’s knowledge, there is no existing patent
or published patent application that would interfere, conflict with or otherwise adversely affect the validity, enforcement or
scope of the Pending Patents if claims of such Pending Patents were issued in substantially the same form as currently written.
No security interests or other Liens have been created with respect to the Pending Patents; and the Pending Patents have not been
exclusively licensed to another entity or Person.


 


(ee)        Insurance.
The Company and the Subsidiaries each maintain insurance covering their respective properties as the Company reasonably deems adequate.
Such insurance protects the Company and the Subsidiaries against such losses and risks and in such amounts as are reasonably prudent
and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors
and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business without a significant increase in cost. There is no material insurance claim made by or against
the Company or any Subsidiary pending, threatened or outstanding and no facts or circumstances exist which would reasonably be
expected to give rise to any such claim. All due premiums in respect of such insurance have been paid.


 


(ff)         Transactions
With Affiliates and Employees. Except as set forth in the General Disclosure Package and the Prospectus, none of the officers
or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any
Subsidiary (including his/her spouse, children, or any company or undertaking in which he/she holds a controlling interest) is
presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner,
in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement
for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock
incentive plan of the Company. There are no relationships or transactions between the Company and/or a Subsidiary on the one hand
and the Company’s affiliates, officers and directors or their shareholders, customers or suppliers on the other hand, which
are not disclosed as required in the General Disclosure Package and the Prospectus.


 


(gg)       Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in 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. Other than as set forth in the
SEC Reports, the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures
to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, except
for the Company’s obligation to file a Current Report on Form 8-K containing financial statements of Vandalia Research, Inc.
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 except in connection
with any non-timely filing of the Company’s required Current Report on Form 8-K containing financial statements of Vandalia
Research, Inc.


 




    	 	16	 



     

    

  


(hh)       A
member of the Audit Committee of the Company (the “Audit Committee”) has confirmed to the Chief Executive Officer or
Chief Financial Officer of the Company that the Audit Committee is not reviewing or investigating, and neither the Company’s
independent auditors nor its internal auditors have recommended that the Audit Committee review or investigate, (i) any matter
which could result in a restatement of the Company’s financial statements for any annual or interim period during the current
or prior three fiscal years; or (ii) any significant deficiency, material weakness, change in internal controls or fraud involving
management or other employees who have a significant role in internal controls other than as set forth in the SEC Reports.


 


(ii)          Certain
Fees. Except as set forth in the Prospectus, no brokerage or finder’s fees or commissions are or will be payable
by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank
or other Person with respect to the transactions contemplated by the Transaction Documents. To the knowledge of the Company, the
Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction
Documents.


 


(jj)          Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares and Warrants,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940,
as amended.


 


(kk)        Registration
Rights. Other than as set forth in the Disclosure Schedules, no Person has any right to cause the Company or any Subsidiary
to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.


 


(ll)          Except
as set forth in the Disclosure Schedules, Company has not sold, issued or distributed any shares during the six-month period preceding
the date hereof, including any sales pursuant to Rule 144A, Regulation D or Regulation S promulgated under the Securities Act,
other than shares issued pursuant to employee benefit plans, qualified share option plans or other employee compensation plans
or pursuant to outstanding options, rights or warrants.


 


(mm)      Securities
Exchange Act Registration; Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b)
or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification
that the Commission is contemplating terminating such registration. The Common Stock outstanding as of the date hereof is listed
on the NASDAQ Capital Market. Except as set forth in the General Disclosure Package and the Prospectus, the Company has not, in
the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed
or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all
such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository
Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust
Company (or such other established clearing corporation) in connection with such electronic transfer.


 




    	 	17	 



     

    

  


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


 


(oo)        Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed
in the Prospectus. 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 Disclosure
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. The press releases disseminated by the Company during the twelve months preceding the date
of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made and when made, not misleading. The Company acknowledges and agrees that 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 3.2 hereof.


 


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


 


(qq)        Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the 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. The Disclosure Schedules
set forth all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed
money or amounts owed in excess of $150,000 (other than trade accounts payable incurred in the ordinary course of business), (y)
all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are
or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $150,000 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	 



     

    

  


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


 


(ss)        Foreign
Corrupt Practices. The Company and each Subsidiary and, to their knowledge, their affiliates and each of their respective
officers, directors, supervisors, managers, agents and employees has not violated, its participation in the offering will not violate,
and it has instituted and maintains policies and procedures designed to (i) ensure continued compliance with anti-bribery laws,
including but not limited to, any applicable law, rule, or regulation of any locality, including but not limited to any law, rule,
or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions, signed December 17, 1997, the FCPA or any other applicable law, rule or regulation of similar purpose and scope or
(ii) prohibit (A) the use of corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating
to political activity, (B) the making of any direct or indirect unlawful payment to any government official or employee from corporate
funds or (C) the making of any bribe, rebate, payoff, influence payment, kickback or other unlawful payment (collectively, the
“Anti-Bribery Laws”). Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary,
any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made
by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material
respect any provision of the Anti-Bribery Laws.


 


(tt)          The
Company and each Subsidiary, and, to their knowledge, their affiliates and each of their respective officers, directors, supervisors,
managers, agents, and employees, has not violated, its participation in the offering will not violate, and it has instituted and
at all times has maintained policies and procedures designed to ensure continued compliance with the anti-money laundering laws,
regulations or government guidance regarding anti-money laundering, and international anti-money laundering principals or procedures
of the United States and any related or similar statutes, rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering Laws”), and no Proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering
Laws is pending or, to the best knowledge of the Company, threatened.


 


(uu)        Accountants.
The Company’s accounting firm is set forth in the General Disclosure Package and the Prospectus. To the knowledge and belief
of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall
express its opinion with respect to the financial statements to be included in the Company’s annual report for the fiscal
year ending September 30, 2015.


 


(vv)        Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is
acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice
given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the
transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further
represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents
has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.


 




    	 	19	 



     

    

  


(ww)       Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(h) and 4.14 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, presently
may have a “short” position in the Common Stock, and (iv) each Purchaser shall not be deemed to have any affiliation
with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands
and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities
are outstanding, including, without limitation, during the periods that the value of the 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.


 


(xx)         Regulation
M Compliance. The Company has not, and to its knowledge, no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities except to the extent otherwise permitted by law, (ii) sold, bid for, purchased, or,
paid any compensation for soliciting purchases of, any of the Securities, or (iii) since January 1, 2013, except as disclosed in
the Company’s SEC Reports, 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 Placement Agent in connection
with the placement of the Securities or as otherwise set forth in the Prospectus.


 


(yy)        The
Company and each Subsidiary and their respective properties, assets and operations are in compliance in all material respects with
and hold all permits, authorizations and approvals required under Environmental Laws (as defined below). There are no past, present
or reasonably anticipated future events, conditions, circumstances, activities, practices, actions, omissions or plans that could
reasonably be expected to give rise to any material costs or liabilities to the Company or any Subsidiary under, or to interfere
with or prevent compliance by any of the Company or a Subsidiary with, Environmental Laws. To the Company’s knowledge, none
of the Company or any Subsidiary (i) is the subject of any investigation, (ii) has received any written notice or claim, (iii)
is a party to or affected by any pending or threatened Proceeding, (iv) is bound by any judgment, decree or order or (v) has entered
into any agreement, in each case relating to any alleged violation of any Environmental Law or any actual or alleged release or
threatened release or cleanup at any location of any Hazardous Materials (as defined below), except where (i), (ii), (iii) and
(iv) would not, individually or in the aggregate, have a Material Adverse Effect. As used herein, “Environmental Law”
means any national, provincial, municipal or other local or foreign law, statute, ordinance, rule, regulation, order, notice, directive,
decree, judgment, injunction, permit, license, authorization or other binding requirement, or common law, relating to health, safety
or the protection, cleanup or restoration of the environment or natural resources, including those relating to the distribution,
processing, generation, treatment, storage, disposal, transportation, other handling or release or threatened release of Hazardous
Materials, and “Hazardous Materials” means any material (including, without limitation, pollutants, contaminants, hazardous
or toxic substances or wastes) that is regulated by or may give rise to liability under any Environmental Law.


 




    	 	20	 



     

    

  


(zz)         Office
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”). None of the Company or any Subsidiary, nor, to
the knowledge of any of the Company or a Subsidiary, any director, officer, agent, employee, affiliate or Person acting on behalf
of any of the Company or a Subsidiary (i) has been or is, or is controlled or owned by an individual or entity that has been or
is or is, subject to (A) any trade, economic or military sanctions administered by or issued against any nation by the United Nations
or any governmental or regulatory authority of the United States, United Kingdom, Australia, Germany, Hong Kong, Canada, France,
Switzerland and Italy, including the Office of Foreign Assets Control of the United States Treasury Department (including but not
limited to the designation as a “specially designated national or blocked person” thereunder), the United Nations Security
Council, Her Majesty’s Treasury of the United Kingdom or any other relevant sanctions authority, or any orders or licenses
publicly issued under the authority of any of the foregoing, or (B) any sanctions or requirements imposed by, or based upon the
obligations or authorizations set forth in, the United States Trading With the Enemy Act, the United States International Emergency
Economic Powers Act, the United States United Nations Participation Act, the United States Syria Accountability and Lebanese Sovereignty
Act, or the United States Iran Sanctions Act of 2006, all as amended, or any foreign assets control regulations of the United States
Treasury Department (including but not limited to 31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto (collectively, “Sanctions”), (ii) has been or is located, organized or resident in a country
or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan
and Syria) or (iii) has violated, will though its participation in the offering violate or failed to institute and maintain policies
and procedures designed to ensure continued compliance with Sanctions. To the knowledge of the Company, there have been no transactions
or connections between the Company or any Subsidiary, on the one hand, and any country, Person, or entity in countries subject
to Sanctions or who perform contracts in support of projects in or for the benefit of those countries, on the other hand other
than de minimis sales to customers in Iran in 2010.


 


(aaa)      None
of the Company nor any Subsidiary has entered into any memorandum of understanding, letter of intent, definitive agreement or any
similar agreements with respect to a merger or consolidation or a material acquisition or disposition of assets, technologies,
business units or businesses.


 


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


 


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


 


(ddd)     Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Warrants or the Warrant Shares issuable upon exercise thereof
by the Company to the Purchasers as contemplated hereby.


 


(eee)      No
Disqualification Events. Knowledge of the Company, with respect to the Warrant and Warrant Shares to be offered and sold
hereunder in reliance on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company participating in the offering hereunder, or, to any beneficial owner
(as that term is defined in Rule 13d 3 under the Exchange Act) of 20% or more of the Company’s outstanding voting
equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities
Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together,
“Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i)
to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule
506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification
Event.


 


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


 




    	 	21	 



     

    

  


(ggg)     No
Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and
the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents.


 


(hhh)     Notice
of Disqualification Events. The Company will notify the Purchasers and the Placement Agent in writing, prior to the Closing
Date, of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of
time, reasonably be expected to become a Disqualification Event relating to any Issuer Covered Person, in each case of which it
is aware.


 


(iii)         No
Oral Representations. Neither the Company nor any other Person on behalf of the Company has made or makes any oral representations
or warranties as to the accuracy or completeness of any information regarding the Company furnished or made available to any Purchaser
or its representatives or as to the future revenue, profitability or success of the Company, or any representation or warranty
arising from statute or otherwise in law.


 


(jjj)         Shell
Company Status. The Company is not, and has not been for the preceding five years, an issuer identified in, or subject
to, Rule 144(i).


 


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


 


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


 


(b)          No
Conflicts. The execution, delivery and performance by such Purchaser of the Transaction Documents to which it is a party
and the consummation by such Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of
the organizational documents, if any, of such Purchaser or (ii) result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws) applicable to such Purchaser, except for such violations which would not,
individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to
perform its obligations hereunder.


 


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


 




    	 	22	 



     

    

  


(d)          Independent
Investment Decision. Such Purchaser has independently evaluated the merits of its decision to purchase Securities pursuant
to the Transaction Documents, and such Purchaser confirms that it has not relied on the advice of any other Purchaser or party’s
business advisors and/or legal counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any
other materials presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Securities constitutes
legal, tax or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the Securities.


 


(e)          Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date
on which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2),
(a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a)
under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.
Such Purchaser has a substantive, pre-existing relationship with the Company and/or the Placement Agent.


 


(f)           Experience
of Such Purchaser; Holding of Securities. Such Purchaser, either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective
investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
The Purchaser understands that there is no established market for the Warrants or Warrant Shares, nor is any such market expected
to develop.


 


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


 


(h)          Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any
purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth
the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement. Other than to other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).
Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty,
or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow
in order to effect Short Sales or similar transactions in the future.


 




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(i)           No
General Solicitation. Such Purchaser is not purchasing the Warrants or the Warrant Shares as a result of the Registration
Statement or any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine
or similar media or broadcast over television or radio or presented at any seminar or, to such Purchaser’s knowledge, any
other general solicitation or general advertisement.


 


(j)           Beneficial
Ownership. Such Purchaser represents that neither such Purchaser nor any group of Purchasers (as identified in a public
filing made with the SEC) of which such Purchaser is a part in connection with the transactions contemplated hereby, acquired,
or obtained the right to acquire, 4.99% or more of the Common Stock (or securities convertible into or exercisable for Common Stock)
or the voting power of the Company on a post-transaction basis.


 


(k)          Such
Purchaser acknowledges and agrees that neither the Company nor any other Person has made any oral representation or warranty as
to the Company or this Agreement.


 


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


 


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


 


(n)          Residency.
If such Purchaser is an entity, such Purchaser’s principal executive offices are, and if such Purchaser is a natural person,
such Purchaser’s principal residence is, in the jurisdiction set forth immediately below such Purchaser’s name on such
Purchaser’s signature page hereto, and all communications between such Purchaser and the Company regarding the transactions
contemplated by this Agreement took place within or from the state of such principal executive offices or principal residence.


 


(o)          Disqualification
Events. No Purchaser that beneficially holds or will hold after the Closing 20% or more of the Company’s voting stock,
nor, to the extent it has them, any of such Purchaser’s shareholders, members, managers, general or limited partners, directors,
affiliates or executive officers, are subject to any Disqualification Event, except for a Disqualification Event covered by Rule
506(d)(2) or (d)(3). The purchase of the Securities by any Purchaser that beneficially holds or will hold after the Closing 20%
or more of the Company’s voting stock will not subject the Company to any Disqualification Event. “Disqualification
Event” shall mean any of the disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act.


 


(p)          Brokers
and Finders. Other than the Placement Agent, no broker or finder has acted for the Subscriber in connection with its purchase
of any Security and no broker or finder is entitled to any broker’s or finder’s fees or other commissions in connection
therewith based on agreements between the Subscriber and any broker or finder.


 




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


 


Article
IV


OTHER
AGREEMENTS OF THE PARTIES


 


4.1         Removal
of Legends.


 


(a)          The
Warrants and Warrant Shares may only be disposed of in compliance with state and federal securities laws. In connection with any
transfer of Warrants or Warrant Shares other than pursuant to an effective registration statement or Rule 144, to the Company or
to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the
form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not
require registration of such transferred Warrant or Warrant Shares under the Securities Act. The Company anticipates that as of
November 27, 2015, it will be unable to file the Form 8-K/A required in connection with the filing of the historical financial
statements pertaining to the acquisition of Vandalia Research, Inc. As a result, the Company anticipates that it will not be eligible
to register securities on Form S-3 from such date until at least December 1, 2016 (exclusive of any time necessary prior to the
effectiveness of any Form S-3 filed on or after such date of eligibility).


 


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


 


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


 


The Company acknowledges
and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Warrants or Warrant Shares to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and Rules and Regulations thereunder and, if required under
the terms of such arrangement, such Purchaser may transfer pledged or secured Warrants or Warrant Shares to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the
pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge.
Any such pledge will be conducted in compliance with the Securities Act and the Rules and Regulations thereunder. At the appropriate
Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of
Warrants and Warrant Shares may reasonably request in connection with a pledge or transfer of the Warrants or Warrant Shares.


 




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(c)          Certificates
evidencing the Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while
a registration statement covering the resale of such security is effective under the Securities Act (provided, however, that it
is acknowledged and agreed that no Purchaser is entitled to any registration rights with respect to, and the Company is not obligated
to prepare or file any registration statement for the resale of, any Warrant or Warrant Share), (ii) following any sale of such
Warrant Shares pursuant to Rule 144, (iii) if such 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 Warrant Shares and without
volume or manner-of-sale restrictions or (iv) if such legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of the Commission) (“Effective Date”). The
Company shall cause the Transfer Agent to remove the legend on the certificate evidencing the Warrant Shares promptly after the
Effective Date upon the request of a holder thereof. If all or any portion of a Warrant is exercised at a time when there is an
effective registration statement to cover the resale of the Warrant Shares, or if such Warrant Shares may be sold under Rule 144
and the Company is then in compliance with the current public information required under Rule 144, or if the Warrant Shares may
be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information required
under Rule 144 as to such Warrant Shares and without volume or manner-of-sale restrictions or if such legend is not otherwise required
under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff
of the Commission) then such Warrant Shares shall be issued free of all legends. The Company agrees that following the Effective
Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading Days
following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Warrant Shares, as applicable,
issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered
to such Purchaser a certificate representing such shares that is free from all restrictive and other legends. The Company may not
make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth
in this Section 4. Notwithstanding anything to the contrary contained herein, 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.


 


(d)          The
Shares shall be issued free of legends.


 


4.2         Furnishing
of Information.


 


(a)          Until
the earliest of the time that (i) no Purchaser (without giving effect to any assignments pursuant to Section 5.7 except to a Purchaser’s
Affiliate) owns Securities as shown on the stock records of the Company maintained by the Company’s transfer agent or, with
respect to the Warrants, as shown on the warrant registry maintained by the Company or its transfer agent or (ii) the Warrants
have expired, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange
Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required
to be filed by the Company after the date hereof pursuant to the Exchange Act, with the exception of the Form 8-K/A required in
connection with the filing of the historical financial statements pertaining to the acquisition of Vandalia Research, Inc., which
the Company believes will be filed after the required filing date of November 27, 2015.


 


(b)          During
the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Warrant Shares
may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or
limitation pursuant to Rule 144, such period not to exceed thirty-six (36) months from the date hereof, the Company shall use commercially
reasonably efforts to satisfy and remain in compliance with the current public information requirement under Rule 144(c).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.


 


(c)          The
Company will promptly advise the Placement Agent of any proposal to amend or supplement the Registration Statement at any time
and the Company will advise the Placement Agent promptly of (i) the filing of any such amendment or supplement; (ii) any request
by the Commission or its staff for any amendment to the Registration Statement or for any additional information; (iii) the institution
by the Commission of any stop order Proceedings in respect of the Registration Statement or the threatening of any Proceeding for
that purpose; and (iv) the receipt by the Company of any such notification with respect to the suspension of the qualification
of the Offered Securities in any jurisdiction or the institution or threatening of any Proceedings for that purpose. The Company
will use its best efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.


 




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4.3         Integration.
Except as required by this Agreement, 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
Warrants in a manner that would require registration under the Securities Act of the sale of the Warrants or that would be integrated
with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require
shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing
of such subsequent transaction.


 


4.4         Securities
Laws Disclosure; Publicity. The Company shall by 9:00 a.m. (New York City time) on the date hereof, (a) issue a press
release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including
the Transaction Documents (including the Disclosure Schedules) as exhibits thereto (the “8-K Filing”), with the Commission
no later than 9:00 a.m. on the date hereof. From and after the filing of the 8-K Filing, the Company represents to the Purchasers
that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or
any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and
agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company,
any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any
of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with
each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor
any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the
Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any
press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required
by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or
communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the
name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent
of such Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction Documents
with the Commission or any registration statement relating to the Warrants and (b) to the extent such disclosure is required by
law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure
permitted under this clause (b).


 


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


 


4.6         Public
Information. At any time during the period commencing from the six (6) month anniversary of the Closing Date and ending at
such time that all of the Securities, if a registration statement is not available for the resale of all of the Securities, may
be sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1),
if the Company shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1) or (ii) if the Company has ever been
an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition
set forth in Rule 144(i)(2) (a “Public Information Failure”) then, as partial relief for the damages to any holder
of Securities by reason of any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive
of any other remedies available at law or in equity), the Company shall pay to each such holder an amount in cash equal to one
and one-half percent (1.5%) of the aggregate purchase price of such holder's Securities on the day of a Public Information Failure
and on every thirtieth day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (i) the date
such Public Information Failure is cured and (ii) such time that such public information is no longer required pursuant to Rule
144. The payments to which a holder shall be entitled pursuant to this Section 4.6 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 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.


 




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


 


4.8         Furnishing of Prospectuses. The Company will furnish to
the Placement Agent copies of the Registration Statement, General Disclosure Package and Prospectus and all amendments and supplements
to such documents, in each case as soon as available and in such form and quantities as the Placement Agent reasonably request.
The Company will pay the expenses of the preparation, printing and distributing to the Placement Agent all such documents.


 


4.9         Use
of Proceeds. Except as set forth in the Disclosure Schedules, General Disclosure Package and the Prospectus, the Company
shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and shall not use such proceeds:
(a) for the redemption of any Common Stock or Common Stock Equivalents, (b) for the settlement of any outstanding litigation or
(c) in violation of FCPA or OFAC regulations.


 




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4.10       Indemnification
of Purchasers. Subject to the provisions of this Section 4.9, the Company will indemnify and hold each Purchaser and
its directors, officers, shareholders, members, partners, employees and agents (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, incur or become subject to insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (a) any untrue statement or alleged untrue statement of any material fact contained in any part
of the Registration Statement at any time, any Time of Sale Prospectus as of any time, General Disclosure Package, the Prospectus,
or arise out of or are based upon the omission or alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, (b) 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 (c) any action instituted against the 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 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) and will reimburse each Purchaser Party for reasonable legal or other expenses reasonably incurred by
such Purchaser Party in connection with defending against any loss, expense, damage, liability or Proceeding whatsoever. 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, but the failure to notify the Company shall not
relieve it from liability that it may have under this Section 4.9 except to the extent that it has been materially prejudiced (through
the forfeiture of substantive rights or defenses) by such failure. 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 Company has failed after a reasonable period of time to assume such defense
and to employ counsel or (ii) 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 shall not, without the prior written
consent of the Purchaser Party, which consent shall not be unreasonably withheld or delayed, effect any settlement of any pending
or threatened action in respect of which any Purchaser Party is or could have been a party and indemnity could have been sought
hereunder by such Purchaser Party unless such settlement (i) includes an unconditional release of such Purchaser Party from all
liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission
of, fault, culpability, or a failure to act by or on behalf of a Purchaser Party. 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 any of the representations, warranties, covenants or agreements
made by such Purchaser Party in this Agreement or in the other Transaction Documents 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 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; provided, however, that
no Purchaser shall be entitled to any double recovery of damages as a result of the exercise of any other such right.


 


4.11       Reservation
of Securities. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of 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.


 


4.12       Listing
of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock
on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote
all of the Shares on such Trading Market and promptly secure the listing of all of the Shares 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 will take such other action as is necessary to cause all of the Shares to be listed or quoted
on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the
listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of
the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including,
without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in
connection with such electronic transfer.


 




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4.13       Subsequent
Equity Sales.


 


(a)          From
the date hereof until the date that is 90 days following the Closing Date, the Company will not, directly or indirectly, take any
of the following actions with respect to its Common Stock or Common Stock Equivalents (the “Lock-Up Securities”): (i)
offer, sell, issue, contract to sell, pledge or otherwise dispose of the Lock-Up Securities; (ii) offer, sell, issue, contract
to sell, contract to purchase or grant any option, right or warrant to purchase Lock-Up Securities; (iii) enter into any swap,
hedge or any other agreement that transfers, in whole or in part, the economic consequences of ownership of Lock-Up Securities;
(iv) establish or increase a put equivalent position or liquidate or decrease a call equivalent position in Lock-Up Securities
within the meaning of Section 16 of the Exchange Act; or (v) file with the Commission a registration statement under the Securities
Act relating to Lock-Up Securities or publicly disclose the intention to take any such action, without the prior written consent
of the Placement Agent, except issuances of Lock-Up Securities pursuant to the conversion or exchange or convertible or exchangeable
securities or other exercise of warrants or options, in each case outstanding on the date hereof, grants of employee stock options
pursuant to the terms of a plan in effect on the date hereof, issuances of Lock-Up Securities pursuant to the exercise of such
options.


 


(b)          From
the date hereof until the date that is 180 days following the Closing Date, the Company shall be prohibited from effecting or entering
into an agreement to affect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
for cash consideration (or a combination of units hereof) involving a Variable Rate Transaction. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable
or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares
of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or
exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company
may sell securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company
to preclude any such issuance, which remedy shall be in addition to any right to collect damages.


 


(c)          Notwithstanding
the foregoing, this Section 4.12(a) shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction
shall be an Exempt Issuance.


 


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


 


4.15       Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that
neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales,
including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement
and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the 8-K Filing
as described in Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time
as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the 8-K Filing as described
in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction. Notwithstanding
the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the 8-K Filing as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any
transactions in any securities of the Company in accordance with applicable Securities Laws from and after the time that the transactions
contemplated by this Agreement are first publicly announced pursuant to the 8-K Filing as described in Section 4.4 and (iii) no
Purchaser shall have any duty of confidentiality to the Company or its Subsidiaries after the issuance of the 8-K Filing as described
in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge
of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant
set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment
decision to purchase the Securities covered by this Agreement.


 




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4.16       Compliance
with Warrant Provisions; Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants set forth
the totality of the procedures required of the Purchasers in order to exercise the Warrants. Without limiting the preceding sentences,
no ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise form be required 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 comply with the provisions of the
Warrants and 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.


 


4.17       Acknowledgment of Dilution. The Company acknowledges that
the issuance of the Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial
under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including,
without limitation, its obligation to issue the Shares and 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.


 


4.18       Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Warrant and Warrant Shares as required
under Regulation D and to provide a copy thereof, promptly upon written request of any Purchaser. The Company shall take such action
as the Company shall reasonably determine is necessary in order to comply with all required notice filings in respect of the Warrant
and Warrant Shares in connection with the sale to the Purchasers on or about 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.


 


4.19       FAST
Compliance. While any Warrants remain outstanding, the Company shall maintain a transfer agent that participates in
the DTC Fast Automated Securities Transfer Program.


 


Article
V


MISCELLANEOUS


 


5.1         Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder and the Company’s obligations
with respect to such Purchaser only and without any effect whatsoever on the obligations between the Company and the other Purchasers,
by written notice to the other parties, if the Closing has not been consummated on or before December 1, 2015; provided, however,
that no such termination will affect the right of any party to sue for any breach by any other party (or parties).


 


5.2         Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees
and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent
fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company
and any exercise notice delivered by a Purchaser), required stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchasers.


 


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


 




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


 


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


 


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


 


5.7         Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. The Purchaser may not assign this Agreement or any rights or obligations hereunder without the prior written consent of
each Purchaser (other than by merger).


 


5.8         No
Third-Party Beneficiaries. The Placement Agent shall be a third party beneficiary of the representations and warranties
of the Purchasers hereunder. This Agreement is intended for the benefit of the parties hereto and their respective successors and
permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise
set forth in this Section 5.8 and in Section 4.8.


 


5.9         Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof except New York General Obligations Law Section 5-1401. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any
other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New
York, Borough of Manhattan. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law.


 


5.10       Compliance
with Anti-Bribery Laws, Money Laundering Laws and Sanctions. The Company will not, and the Company will procure that
each of its Subsidiaries , any of their respective affiliates and any Person acting on its or their behalf will not, (i) violate
any of the Anti-Bribery Laws, Money Laundering Laws or Sanctions or (ii) directly or indirectly use the proceeds from the offering
of the Securities, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other
Person or entity, for the purpose of financing or facilitating the business or the activities of any Person, or in any country
or territory that, at the time of such financing or facilitation, is subject to any Sanctions, or in any other manner that will
result in a violation of Sanctions by any Person.


 




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5.11       Free
Writing Prospectus. The Company represents and agrees that, unless it obtains the prior consent of the Placement Agent,
and the Placement Agent represents and agrees that, unless it obtains the prior consent of the Company, it has not made and will
not make any offer relating to the Offered Securities that would constitute a “free writing prospectus” as defined
in Rule 405 of the Securities Act required to be filed with the Commission.


 


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


 


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


 


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


 


5.15       Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever 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 (including all applicable
grace or cure periods), 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 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).


 


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


 


5.17       Remedies.
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.


 




    	 	33	 



     

    

  


5.18       Payment
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.


 


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


 


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


 


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


 


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


 


(Signature Pages Follow)


 




    	 	34	 



     

    

  


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


 


	APPLIED DNA SCIENCES, INC.	 	Address for Notice:
	 	 	 
	By:	 	 	Fax:
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 
	With a copy to (which shall not constitute notice):
	 
	
        Pepper Hamilton LLP

        620 Eighth Avenue, 37th
        Floor

        New York, New York 10018-1405

        Attention:  Merrill
        Kraines, Esq.

        Fax: (212) 286-9806



 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 




    	 	35	 



     

    

  


PURCHASER SIGNATURE PAGES TO APPLIED DNA
SCIENCES, INC.


 


SECURITIES PURCHASE
AGREEMENT


 


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


 


	Name of Purchaser: 	 





	Signature of Authorized Signatory of Purchaser: 	 





	Name of Authorized Signatory: 	 





	Title of Authorized Signatory: 	 





	Email Address of Authorized Signatory:	 





	Facsimile Number of Authorized Signatory: 	 





	Address for Notice to Purchaser:	 


 


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


 


 


	Subscription Amount:	 	 


 


	Shares:	 	 


 


	Warrants:	 	 


 


	EIN Number:	 	 


 


 ̈
Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed
to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations
of the Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded,
(ii) the Closing shall occur on the third (3rd) Trading Day following the date of this Agreement
and (iii) any condition to Closing contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required
delivery by the Company or the above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable)
shall no longer be a condition and shall instead be an unconditional obligation of the Company or the above-signed (as applicable)
to deliver such agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing
Date.


 


[SIGNATURE PAGES CONTINUE]


 




    	 	36	 



     

    

 


[EXHIBIT A


 


Form of Warrant]