Exhibit 10.1


 


SECURITIES PURCHASE AGREEMENT


 


This SECURITIES
PURCHASE AGREEMENT (this “Agreement”) is dated as of June 23, 2016, among Research Solutions, Inc., a Nevada
corporation (the “Company”), and the investors listed on the Schedule of Investors attached hereto as Exhibit
A and identified on the signature pages hereto (each, an “Investor” and collectively, the “Investors”).


 


WHEREAS, subject
to the terms and conditions set forth in this Agreement and in reliance upon the applicable exemptions from securities registration
under the Securities Act (as defined below), the Company desires to issue and sell to each Investor, and each Investor, severally
and not jointly, desires to purchase from the Company certain 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 the Investors agree as follows:


 


ARTICLE
1.

DEFINITIONS


 


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


 


“Action”
as to any Person, means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a
deposition) or investigation pending or threatened in writing against or affecting such Person, any of such Person’s Subsidiaries
or any of such Person’s or such Subsidiaries’ respective properties, before or by any Governmental Body, arbitrator,
regulatory authority (federal, state, county, local or foreign), stock market, stock exchange or trading facility.


 


“Affiliate”
means, with respect to any specified Person: (i) if such Person is an individual, the spouse of that Person and, if deceased or
disabled, his heirs, executors, or legal representatives, if applicable, or any trusts for the benefit of such individual or such
individual’s spouse and/or lineal descendants, or (ii) otherwise, another Person that directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control with, the Person specified. As used in this definition,
“control” shall mean the possession, directly or indirectly, of the power to cause the direction of the management
and policies of a Person, whether through the ownership of voting securities or by contract or other written instrument.


 


“Business”
means the business conducted by the Company and/or its Subsidiaries.


 


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


 


“Commission”
means the Securities and Exchange Commission.


 




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


 


“Common Stock
Equivalents” means any securities of the Company or any Subsidiary which entitle the holder thereof to acquire Common
Stock at any time, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that
is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common Stock.


 


“Company Counsel”
means Stubbs Alderton & Markiles, LLP.


 


“Company’s
Knowledge” means the actual knowledge of Peter Derycz, Alan Urban, Janice Peterson, and Scott Ahlberg.


 


“Effective Date”
means the date that the Registration Statement required by Section 2(a) of the Registration Rights Agreement is first declared
effective by the Commission.


 


“Eligible Investors”
means Investors introduced to the Company by the Placement Agent.


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended.


 


“GAAP”
means U.S. generally accepted accounting principles.


 


“Governmental
Body” means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction
of any nature; (b) federal, state, local, municipal, foreign or other government; or (c) governmental or quasi-governmental authority
of any nature (including any governmental or administrative division, department, agency, commission, instrumentality, official,
organization, unit, body or entity) and any court or other tribunal.


 


“Investment
Amount” means, with respect to each Investor, the Investment Amount indicated on such Investor’s signature page
to this Agreement, which is also reflected on the Schedule of Investors attached hereto as Exhibit A.


 


“Intellectual
Property” means the Company’s patents, patent applications, provisional patents, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights, licenses, formulae, mask works, customer lists, internet
domain names, know-how and other intellectual property, including trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems, procedures or registrations or applications relating to the same.


 


“Investor”
means any person who purchases Units in the Offering pursuant to this Agreement.


 




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“Irrevocable
Transfer Agent Instructions” means the Irrevocable Transfer Agent Instructions, in the form of Exhibit B, executed
by the Company and delivered to and acknowledged in writing by the Transfer Agent.


 


“Legal Requirement”
means any federal state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution,
ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body (or under the authority of any national securities exchange
upon which the Common Stock is then listed or traded). Reference to any Legal Requirement means such Legal Requirement as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, and reference to any section or
other provision of any Legal Requirement means that provision of such Legal Requirement from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or reenactment of such section or other provision.


 


“Lien”
means any interest in Property securing an obligation owed to a Person whether such interest is based on the common law, statute
or contract, and including but not limited to a security interest arising from a mortgage, lien, title claim, assignment, encumbrance,
adverse claim, contract of sale, pledge, conditional sale or trust receipt or a lease, consignment or bailment for security purposes.
The term “Lien” includes but is not limited to mechanics’, materialmens’, warehousemens’ and carriers’
liens and other similar encumbrances. For the purposes hereof, a Person shall be deemed to be the owner of Property which it has
acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes.


 


“Maximum Amount”
means $5,200,000.


 


“Material Adverse
Effect” means any of (i) a material and adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material and adverse effect on the results of operations, assets, properties, business or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material and adverse impairment to the Company’s
ability to perform on a timely basis its obligations under any Transaction Document, provided, however, that any effect(s)
arising from or relating to any of the following shall not be deemed, either alone or in combination, to constitute, and shall
not be taken into account in determining whether there has been or will be, a Material Adverse Effect: (A) conditions affecting
the industries in which the Business operates (which effect(s), in each case, do not disproportionately affect the Business relative
to other companies conducting businesses similar to the Business); (B) general economic, financial market or geopolitical conditions
(which effect(s), in each case, do not disproportionately affect the Business relative to other companies conducting businesses
similar to the Business); (C) any failure to meet any projections or forecasts for the Business for any period ending (or for which
revenues or earnings are released) on or after the date hereof (provided that the underlying causes of any such failure (subject
to the other provisions of this definition) shall not be excluded); (D) any change in accounting rules (including GAAP), or the
enforcement, implementation or interpretation thereof, after the date hereof; or (E) any effect caused by, relating to or resulting
from the announcement or pendency of the transactions contemplated by this Agreement.


 




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“New York Courts”
means the state and federal courts sitting in the City of New York, Borough of Manhattan.


 


“Offering”
means the offering and sale of the Units pursuant to this Agreement.


 


“Outside Date”
means the 30th calendar day following the First Closing. If such calendar day is not a Trading Day, then the first Trading
Day following such calendar day.


 


“OTC Market”
means the OTCBB, the OTCQX and/or the OTCQB.


 


“OTCBB”
means the OTC Bulletin Board system.


 


“OTCQB”
means the OTCQB market operated by OTC Markets Group.


 


“OTCQX”
means the OTCQX market operated by OTC Markets Group.


 


“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 Wunderlich Securities, Inc.


 


“Placement Agent
Warrants” means the warrants to be issued to the Placement Agent
to purchase a number of shares of Common Stock derived by dividing an amount equal to 4.5% of the gross proceeds raised
from Eligible Investors at each Closing by $1.00.


 


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


 


“Proceeds”
means the amount raised by the Company from the Offering, which, net of expenses, will be utilized by the Company for general corporate
and working capital purposes.


 


“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding,
such as a deposition), whether commenced or, to the Company’s Knowledge, threatened.


 


“Property”
means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.


 


“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, among the Company and the Investors
in the form of Exhibit C hereto.


 


“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale by the Investors of the Registrable Securities as defined in the Registration Rights Agreement.


 




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


 


“Securities”
means the Units, the Shares, the Warrants, the Warrant Shares, the Placement Agent Warrants, and the Placement Agent Warrant Shares.


 


“Securities
Act” means the Securities Act of 1933, as amended.


 


“Shares”
means the shares of Common Stock included in the Units, the Warrant Shares, and the Placement Agent Warrants Shares.


 


“Short Sales”
include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange
Act and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements
(including on a total return basis), and sales and other transactions through non-US broker dealers or foreign regulated brokers.


 


“Subsidiary”
means any “significant subsidiary” as defined in Rule 1-02(w) of the Regulation S-X promulgated by the Commission under
the Exchange Act.


 


“Trading Day”
means: (i) a day on which the Common Stock is traded on a Trading Market (other than an OTC Market), or (ii) if the Common Stock
is not listed on a Trading Market (other than an OTC Market), a day on which the Common Stock is traded in the over the counter
market, as reported by OTCQB, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock
is quoted in the over the counter market as reported by the Pink Sheets LLC (or any similar organization or agency succeeding to
its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i),
(ii) and (iii) hereof, then Trading Day shall mean a Business Day.


 


“Trading Market”
means any of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital
Market, an OTC Market or any other market on which the Common Stock is listed or quoted for trading on the date in question.


 


“Transaction
Documents” means this Agreement, the Registration Rights Agreement, the Warrants and the Placement Agent Warrants and
any other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer”
means any sale, transfer, assignment, conveyance, charge, pledge, mortgage, encumbrance, hypothecation, security interest or other
disposition, or to make or effect any of the above.


 


“Transfer Agent”
means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company with a mailing address of 6201
15th Avenue, Brooklyn, NY 11219 and a facsimile number of (718) 765-8711, and any successor transfer agent of the Company.


 




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“Unit”
means a unit composed of one share of Common Stock (a “Common Share”) and a Warrant to purchase three-tenths
of one share of Common Stock.


 


“U.S. Investor”
means an Investor who is resident in the United States of America.


 


“Warrants”
means the Common Stock purchase warrants, in the form of Exhibit D, issuable to each Investor at a Closing to purchase a
number of shares of Common Stock equal to 30% of the number of Common Shares issued pursuant to the Units purchased by such Investor
at an exercise price of $1.25 per Warrant Share.


 


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


 


ARTICLE
2.

PURCHASE AND SALE


 


2.1.         Subscription
for Units by the Investors. Subject to the terms and conditions of this Agreement, on the Closing Date (as defined below),
each of the Investors shall severally, and not jointly, purchase, and the Company shall sell and issue to each Investor, Units
at a purchase price of $1.00 per Unit.


 


2.2.         Closing.


 


(a)          First
Closing. Subject to the terms and conditions set forth in this Agreement, the Company shall issue and sell to each Investor,
and each such Investor shall, severally and not jointly, purchase from the Company on or before June 24, 2016 (the “First
Closing Date”), such number of Units set forth on the respective signature pages attached hereto, which will be reflected
opposite such Investor’s name on Exhibit A (the “First Closing”).


 


(b)          Subsequent
Closing(s). In the event that the Maximum Amount is not raised at the First Closing, the Company and the Placement Agent may
mutually agree to have one or more subsequent Closings of the Offering (each, a “Subsequent Closing”) until
the first to occur of: (i) the Maximum Amount being raised and (ii) the Outside Date. At each Subsequent Closing, the Company agrees
to issue and sell to each Investor participating in such Subsequent Closing who executes a signature page hereto, and each such
Investor agrees, severally and not jointly, to purchase from the Company such number of Units set forth on such Investor’s
signature pages attached hereto. There may be more than one Subsequent Closing; provided, however, that the final
Subsequent Closing shall take place on or before the Outside Date. The date of any Subsequent Closing is hereinafter referred to
as a “Subsequent Closing Date”).


 


(c)          Closing.
The First Closing and any applicable Subsequent Closings are each referred to in this Agreement as a “Closing.”
The First Closing Date and any Subsequent Closing Date are sometimes referred to herein as a “Closing Date.”
The Closing at which the Maximum Amount is raised, or which is the last Closing prior to the Outside Date, is referred to as the
“Final Closing.” The date of the Final Closing is referred to as the “Final Closing Date.”
All Closings shall occur on or prior to the Outside Date at the offices of Company Counsel at 15260 Ventura Blvd., 20th
Floor, Sherman Oaks, CA 91403, or remotely via the exchange of documents and signatures.


 




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2.3.         Closing
Deliveries.


 


(a)          Subject
to the provisions of this Section 2.3, at each Closing, the Company shall deliver or cause to be delivered to each Investor participating
in such Closing, against the delivery by such Investor of the Investment Amount, the following (the “Company Deliverables”):


 


(i)          duly
executed Irrevocable Transfer Agent Instructions acknowledged in writing by the Transfer Agent for the requisite number of Shares
to be delivered to such Investor at such Closing;


 


(ii)         certificates
representing the Warrants included in the Units sold to such Investor at such Closing;


 


(iii)        a
certificate executed on behalf of the Company by its Chief Executive Officer or its Chief Financial Officer, dated as of the applicable
Closing Date, certifying to the fulfillment of the conditions specified in Article 5 (the “Company Officer Certificate”);


 


(iv)        a
certificate executed on behalf of the Company by its secretary dated as of the First Closing Date, certifying the resolutions adopted
by the board of directors of the Company approving the transactions contemplated by this Agreement and the other Transaction Documents
and the issuance of the Securities, and certifying as to the signatures and authority of persons signing the Transaction Documents
and related documents on behalf of the Company (the “Company Secretary Certificate”). The foregoing certificate
shall only be required to be delivered on the First Closing Date, unless any material information contained in the certificate
has changed;


 


(v)         the
legal opinion of Company Counsel, in agreed form, addressed to the Investors and the Placement Agent;


 


(vi)        this
Agreement, duly executed by the Company; and


 


(vii)       the
Registration Rights Agreement, duly executed by the Company.


 


(b)          At
each Closing, the Company shall deliver or cause to be delivered to the Placement Agent Placement Agent Warrants to purchase a
number of shares of Common Stock derived by dividing an amount equal to 4.5% of the gross proceeds raised from Eligible Investors
at such Closing by $1.00.


 


(c)          By
the applicable Closing, each Investor shall deliver or cause to be delivered the agreements specified in Section 5.2(d), each duly
signed by such Investor (collectively, the “Investor Deliverables”).


 




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(d)          At
each Closing, each Investor participating in such Closing shall deliver or cause to be delivered to the Company, its Investment
Amount, in United States dollars and in immediately available funds, by wire transfer to the account designated in writing by the
Company for such purpose.


 


2.4.         The
Warrants. The Warrants shall have the terms and conditions and be in the form attached hereto as Exhibit D.


 


2.5.         The
Registration Rights Agreement. The Registration Rights Agreement shall contain the terms and conditions and be in the form
attached hereto as Exhibit C.


 


2.6.         Use
of Proceeds. The Company hereby covenants and agrees that the Proceeds from the sale of Units shall be used for working capital
and general corporate purposes.


 


ARTICLE
3.

REPRESENTATIONS AND WARRANTIES


 


3.1.         Representations
and Warranties of the Company. Except as set forth in the corresponding section of the Disclosure Schedules delivered concurrently
herewith, the Company hereby makes the following representations and warranties as of the date hereof and as of the Closing Date
to each Investor:


 


(a)          Subsidiaries.
A true and correct organizational chart of the Company and its Subsidiaries is included as Schedule 3.1(a). 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, nonassessable
and free of preemptive and similar rights to subscribe for or purchase securities.


 


(b)          Subsidiary
Securities. There are no outstanding: (i) securities of the Company or any Subsidiary convertible into or exchangeable for
shares of capital stock or voting securities of any Subsidiary or (ii) options or other rights to acquire from the Company or any
Subsidiary, or other obligation of the Company or any Subsidiary to issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of any Subsidiary (the items in clauses (i) and (ii) being referred
to collectively as the “Subsidiary Securities”). There are no outstanding obligations of the Company or any
Subsidiary to repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities.


 


(c)          Organization
and Qualification. The Company and each Subsidiary are duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor
any Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. The Company and each Subsidiary are duly qualified to conduct its respective businesses and
are in good standing 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, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse Effect.


 




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(d)          Authorization;
Enforcement. The Company has the requisite corporate and other power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its obligations thereunder. The execution and delivery
of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been
duly authorized by all necessary action on the part of the Company, and no further action is required by the Company or any Subsidiary
in connection therewith. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and,
when delivered in accordance with its terms, will constitute the valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies
or by other equitable principles of general application.


 


(e)          No
Conflicts. Except as set forth on Schedule 3.1(e), the execution, delivery and performance of the Transaction Documents
by the Company and the consummation by the Company of the transactions contemplated thereby do not and will not (i) conflict with
or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property
or asset of the Company or a Subsidiary is bound or affected, or (iii) result in a violation of any Legal Requirement, order, judgment,
injunction, decree or other restriction of any Governmental Body to which the Company or a Subsidiary is subject (including federal
and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect.


 


(f)          Filings,
Consents and Approvals. Except as set forth on Schedule 3.1(f), neither the Company nor any Subsidiary is required to
obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any Governmental
Body or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other
than (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration
Rights Agreement, (ii) filings required by state securities laws, (iii) the filing of a Notice of Sale of Securities on Form D
with the Commission under Regulation D of the Securities Act, (iv) the filings required in accordance with Section 4.5 hereof,
(v) those that have been made or obtained prior to the date of this Agreement, and (vi) other post-closing securities filings or
notifications required to be made under federal or state securities laws.


 




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(g)          Issuance
of the Securities. The Units and the Shares and the Warrants included in the Units are duly authorized and, when issued and
paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and
clear of all Liens. The Placement Agent Warrants have been duly and validly authorized and upon the due exercise of the Warrants
and Placement Agent Warrants, the Warrant Shares and Placement Agent Warrant Shares will be validly issued, fully paid and non-assessable
free and clear of all Liens. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common
Stock issuable pursuant to this Agreement, the Warrants and the Placement Agent Warrants.


 


(h)          Capitalization.


 


(i)          Schedule
3.1(h) sets forth as of the date hereof and as of the First Closing Date (a) the authorized capital stock of the Company; (b)
the number and class of shares of capital stock issued and outstanding; (c) the number and class of shares of capital stock issuable
pursuant to the Company’s stock incentive plans or agreements; and (d) the number and class of shares of capital stock issuable
and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital
stock of the Company and a description of the number and rights of such securities.


 


(ii)         Except
as described on Schedule 3.1(h), all of the issued and outstanding shares of the Company’s capital stock have been
duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights and were issued in full compliance
with applicable state and federal securities law and any rights of third parties.


 


(iii)        Except
as described on Schedule 3.1(h), 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.


 


(iv)        Except
as described on Schedule 3.1(h), there are no outstanding (i) shares of capital stock or voting securities of the Company
or (ii) options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares
of capital stock or voting securities or securities convertible into or exchangeable for capital stock or voting securities of
the Company, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become
bound to issue additional shares of capital stock or voting securities of the Company, or securities or rights convertible or exchangeable
into shares of capital stock or voting securities of the Company (the items in clauses (i) and (ii) being referred to collectively
as the “Company Securities”). Except as described on Schedule 3.1(h), there are no outstanding obligations
of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any Company Securities.


 


(v)         Except
as described on Schedule 3.1(h), 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 Investors) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset price under such securities.


 




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(vi)        Except
as described on Schedule 3.1(h), there are no voting agreements, buy-sell agreements, option or right of first purchase
agreements or other agreements of any kind among the Company and any of the securities-holders of the Company relating to the securities
of the Company held by them.


 


(vii)       Except
as described on Schedule 3.1(h), no Person has the right to require the Company to register any securities of the Company
under the Securities Act, whether on a demand basis or in connection with the registration of securities of the Company for its
own account or for the account of any other Person.


 


(i)          SEC
Reports; Financial Statements. The Company was never a “shell” company as described in Rule 144(i)(1) under the
Securities Act. The Company has filed all reports, schedules, forms, statements and other documents
and registration statements required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the twelve months preceding the date hereof (or such shorter period as the Company was required by
law to file such reports) (the foregoing materials being collectively referred to herein as the “SEC Reports”
and, together with the Schedules to this Agreement (if any), the “Disclosure Materials”) on a timely basis or
has timely filed and received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the
SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
The financial statements of the Company and each Subsidiary included in the SEC Reports complied 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 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, immaterial year-end audit adjustments.
There is no transaction, arrangement, or other relationship between the Company or any Subsidiary and an unconsolidated or other
off balance sheet entity that is not disclosed in its financial statements that should be disclosed in accordance with GAAP and
that would be reasonably likely to have a Material Adverse Effect.


 


(j)          Press
Releases. The press releases (other than the industry data, research opinion or viewpoints contained therein that are derived
from third party sources) disseminated by the Company during the twelve months preceding the date of this Agreement, either individually
or 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. To the Company’s Knowledge, the industry data, research opinion or viewpoints derived from third party
sources contained in the press releases disseminated by the Company during the twelve months preceding the date of this Agreement,
are derived from valid and reputable sources without the need for consent and, either individually or 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.


 




    	 	11	 



     


    

 


(k)          Material
Changes. Except as described on Schedule 3.1 (k) or in the SEC Reports, since the date of the latest audited financial
statements included within the SEC Reports, the Company and its Subsidiaries have not:


 


(i)          There
has been no event or circumstance of any nature whatsoever that has resulted in, or could reasonably be expected to result in,
a Material Adverse Effect; or


 


(ii)         Except
for this Agreement and the other Transaction Documents, there has been no transaction, event, action, development, payment, or
other matter of any nature whatsoever entered into by the Company that requires disclosure in an SEC Document which has not been
so disclosed.


 


(l)          No
Undisclosed Material Liabilities. There are no liabilities of the Company or any Subsidiary of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in such a liability, other than:


 


(i)          liabilities
provided for in the audited consolidated balance sheet of the Company and the Subsidiaries as of June 30, 2015 or disclosed in
the notes thereto; and


 


(ii)         other
undisclosed liabilities which, individually or in the aggregate, have not resulted in or could reasonably be expected to result
in a Material Adverse Effect.


 


(m)          Litigation.
There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) except as disclosed in the SEC Reports, could, if there were an unfavorable decision, individually
or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary,
nor to the Company’s Knowledge, any director or officer thereof (in his or her capacity as such), 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, except as disclosed in the Disclosure Materials. There has not been, and to the Company’s Knowledge, 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
(in his or her capacity as such). 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.


 


(n)          Labor
Relations. Neither the Company nor any Subsidiary is a party to or bound by any collective bargaining agreements or other agreements
with labor organizations and, to the Company’s Knowledge, there are no attempts to organize the employees of the Company
or any of its Subsidiaries. Neither the Company nor any Subsidiary has violated in any material respect any laws, regulations,
orders or contract terms, affecting the collective bargaining rights of employees, labor organizations or any laws, regulations
or orders affecting employment discrimination, equal opportunity employment, or employees’ health, safety, welfare, wages
and hours. No material labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees
of the Company or any Subsidiary which could reasonably be expected to result in a Material Adverse Effect.


 




    	 	12	 



     


    

 


(o)          Compliance.
Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or
Governmental Body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except in each case as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse Effect. The Company is in compliance with all effective
requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder, that are applicable to it,
except where such noncompliance could not have or reasonably be expected to result in a Material Adverse Effect.


 


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


 


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


 


(r)          Material
Contracts. The Company has made available to the Investors copies (via the SEC’s EDGAR system) of the Material Contracts
(as defined below). Except as described in the SEC Reports, neither the Company nor any of its Subsidiaries has entered into any
oral contracts which, if written, would qualify as a Material Contract. Each of the Material Contracts is valid and in full force
and effect, is enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or similar laws affecting creditors’ rights generally and general principles of equity, and will continue
to be so immediately following the Closing Date. Except for the agreements, contracts, instruments and other exhibits filed as
part of and as required pursuant to the SEC Reports (such agreements, contracts or instruments, collectively, the “Material
Contracts”) or otherwise made available to the Investors, neither the Company nor any of its Subsidiaries is party or
subject to, or bound by:


 




    	 	13	 



     


    

 


(i)          any
agreements, contracts or commitments that call for prospective fixed and/or contingent payments or expenditures by or to the Company
or any of its Subsidiaries of more than $200,000, or which is otherwise material and not entered into in the ordinary course of
business;


 


(ii)         any
contract, lease or agreement involving payments in excess of $200,000, which is not cancelable by the Company or any of its Subsidiaries,
as applicable, without penalty on not less than 60 days’ notice;


 


(iii)        any
contract, including any distribution agreements, containing covenants directly or explicitly limiting the freedom of the Company
or any of its Subsidiaries to compete in any line of business or with any Person or to offer any of its products or services;


 


(iv)        any
material indenture, mortgage, promissory note, loan agreement, guaranty or other agreement or commitment for the borrowing of money
or pledging or granting a security interest in any assets;


 


(v)         any
employment contracts, non-competition agreements, invention assignments, severance or other agreements with officers, directors,
employees, stockholders or consultants of the Company or any of its Subsidiaries or Persons related to or affiliated with such
Persons;


 


(vi)        any
stock redemption or purchase agreements or other agreements affecting or relating to the capital stock of the Company or any of
its Subsidiaries, including, without limitation, any agreement with any stockholder of the Company or any of its Subsidiaries which
includes, without limitation, antidilution rights, voting arrangements or operating covenants;


 


(vii)       any
pension, profit sharing, retirement, stock option or stock ownership plans;


 


(viii)      any
royalty, dividend or similar arrangement based on the revenues or profits of the Company or any of its Subsidiaries or based on
the revenues or profits derived from any material contract;


 


(ix)         any
acquisition, merger, asset purchase or other similar agreement;


 


(x)          any
sales agreement which entitles any customer to a right of set-off, or right to a refund after acceptance thereof;


 


(xi)         any
agreement with any supplier or licensor containing any provision permitting such supplier or licensor to change the price or other
terms upon a breach or failure by the Company or any of its Subsidiaries, as applicable, to meet its obligations under such agreement;
or


 




    	 	14	 



     


    

 


(xii)        any
agreement under which the Company or any of its Subsidiaries has granted any Person registration rights for securities.


 


(s)          Actions
with Respect to Material Contracts.


 


(i)          Neither
the Company nor any of its Subsidiaries has violated or breached, or committed any default under, any Material Contract in any
material respect, and, to the Company’s Knowledge, no other Person has violated or breached, or committed any default under
any Material Contract, except for violations, breaches of defaults which would not have a Material Adverse Effect; and


 


(ii)         To
the Company’s Knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or
lapse of time) will, or would reasonably be expected to: (A) result in a material violation or breach of any of the provisions
of any Material Contract, (B) give any Person the right to declare a default or exercise any remedy under any Material Contract,
(C) give any Person the right to accelerate the maturity or performance of any Material Contract or (D) give any Person the right
to cancel, terminate or modify any Material Contract, except, in each case, as would not have a Material Adverse Effect.


 


(t)          Taxes.


 


(i)          The
Company and its Subsidiaries have timely and properly filed all tax returns required to be filed by them for all years and periods
(and portions thereof) for which any such tax returns were due. All such filed tax returns are accurate in all material respects.
The Company has timely paid all taxes due and payable (whether or not shown on filed tax returns). There are no pending assessments,
asserted deficiencies or claims for additional taxes that have not been paid. The reserves for taxes, if any, reflected in the
SEC Reports are adequate, and there are no Liens for taxes on any property or assets of the Company and any of its Subsidiaries
(other than Liens for taxes not yet due and payable). There have been no audits or examinations of any tax returns by any Governmental
Body, and the Company or its Subsidiaries have not received any notice that such audit or examination is pending or contemplated.
No claim has been made by any Governmental Body in a jurisdiction where the Company or any of its Subsidiaries does not file tax
returns that it is or may be subject to taxation by that jurisdiction. To the Company’s Knowledge, no state of facts exists
or has existed which would constitute grounds for the assessment of any penalty or any further tax liability beyond that shown
on the respective tax returns. There are no outstanding agreements or waivers extending the statutory period of limitation for
the assessment or collection of any tax. Neither the Company nor any of its Subsidiaries is a party to any tax-sharing agreement
or similar arrangement with any other Person.


 


(ii)         The
Company has made all necessary disclosures required by Treasury Regulation Section 1.6011-4. The Company has not been a participant
in a “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4(b).


 


(iii)        No
payment or benefit paid or provided, or to be paid or provided, to current or former employees, directors or other service providers
of the Company will fail to be deductible for federal income tax purposes under Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”).


 




    	 	15	 



     


    

 


(u)          Employees.


 


(i)          Except
as set forth in Schedule 3.1(u) or in the SEC Reports, the Company and its Subsidiaries have no policy, practice, plan or
program of paying severance pay or any form of severance compensation in connection with the termination of employment services.


 


(ii)         Each
Person who performs services for the Company or any of its Subsidiaries has been, and is, properly classified by the Company or
its Subsidiaries as an employee or an independent contractor.


 


(iii)        To
the Company’s Knowledge, no employee or advisor of the Company or any of its Subsidiaries is or is alleged to be in violation
of any term of any employment contract, disclosure agreement, proprietary information and inventions agreement or any other contract
or agreement or any restrictive covenant or any other common law obligation to a former employer relating to the right of any such
employee to be employed by the Company or any of its Subsidiaries because of the nature of the business conducted or to be conducted
by the Company or any of its Subsidiaries or to the use of trade secrets or proprietary information of others, and the employment
of the employees of the Company and its Subsidiaries does not subject the Company or the Company’s stockholders to any liability.
There is neither pending nor, to the Company’s Knowledge, threatened any actions, suits, proceedings or claims, or, to the
Company’s Knowledge, any basis therefor or threat thereof with respect to any contract, agreement, covenant or obligation
referred to in the preceding sentence.


 


(v)         Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar rights (collectively, the “Intellectual
Property Rights”) that are necessary or material for use in connection with the Business as described in the SEC Reports
and which the failure to so have could, individually or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used
by the Company or any Subsidiary violates or infringes upon the rights of any Person. Except as set forth in the SEC Reports, to
the Company’s Knowledge, all such Intellectual Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable steps to protect the
Company’s and its Subsidiaries’ rights in their Intellectual Property Rights and confidential information (the “Confidential
Information”). Each employee, consultant and contractor who has had access to Confidential Information which is necessary
for the conduct of the Business as currently conducted or as currently proposed to be conducted has executed an agreement to maintain
the confidentiality of such Confidential Information and has executed appropriate agreements that are substantially consistent
with the Company’s standard forms thereof. Except under confidentiality obligations, there has been no material disclosure
of any of the Company’s or its Subsidiaries’ Confidential Information to any third party.


 




    	 	16	 



     


    

 


(w)          Environmental
Matters. Neither the Company nor any Subsidiary: (i) is in violation of any statute, rule, regulation, decision or order of
any Governmental Body relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic substances or to animal waste (collectively, “Environmental
Laws”), (ii) owns, leases, has rights in or operates any real property contaminated with any substance that is subject
to any Environmental Laws, (iii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or (iv)
is subject to any claim relating to any Environmental Laws, and there is no pending or, to the Company’s Knowledge, threatened
investigation that might lead to such a claim.


 


(x)          Certain
Fees. Except for fees payable to the Placement Agent, no brokerage or finder’s fees or commissions are or will be payable
by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement. The Investors shall have no obligation with respect to any fees
or with respect to any claims (other than such fees or commissions owed by an Investor pursuant to written agreements executed
by such Investor which fees or commissions shall be the sole responsibility of such Investor) 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 this Agreement.


 


(y)          Investment
Company. The Company is not, and is not an Affiliate of, and immediately following the Closing will not have become, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.


 


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


 


(aa)         Consultation
with Auditors. The Company has consulted its independent auditors concerning the accounting treatment of the transactions contemplated
by the Transaction Documents, and in connection therewith has furnished such auditors complete copies of the Transaction Documents.


 


(bb)         Exemption
from Registration. Subject to the accuracy of the Investors’ representations and warranties set forth in this Section
3, except as required pursuant to the Registration Rights Agreement, the sale of Securities by the Company to the Investors will
not require registration under the Securities Act. The Company is issuing Securities in accordance with and in reliance upon the
exemption from securities registration afforded, inter alia, by Rule 506(b) under Regulation D as promulgated by the Commission
under the Securities Act.


 


(cc)         No
Integrated Offering. Other than in connection with this Offering, 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 securities or solicited any offers to
buy any securities, under circumstances that would cause this Offering to be integrated with prior offerings by the Company for
purposes of the Securities Act which would require the registration of any such securities under the Securities Act or any applicable
shareholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation
system on which any of the securities of the Company are listed or designated.


 




    	 	17	 



     


    

 


(dd)        No
General Solicitation. Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general
advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Securities.


 


(ee)         Questionable
Payments. Neither the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any of their
respective current or former stockholders, directors, officers, employees, agents or other Persons acting on behalf of the Company
or any Subsidiary, has on behalf of the Company or any Subsidiary or in connection with their respective businesses: (a) used any
corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (b)
made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; (c) established
or maintained any unlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful bribe, rebate, payoff, influence payment, kickback
or other unlawful payment of any nature.


 


(ff)         Solvency.
The Company has not (a) made a general assignment for the benefit of creditors; (b) filed any voluntary petition in bankruptcy
or suffered the filing of any involuntary petition by its creditors; (c) suffered the appointment of a receiver to take possession
of all, or substantially all, of its assets; (d) suffered the attachment or other judicial seizure of all, or substantially all,
of its assets; (e) admitted in writing its inability to pay its debts as they come due; or (f) made an offer of settlement, extension
or composition to its creditors generally.


 


(gg)        Related
Party Transactions. Except as set forth in the SEC Reports: (a) none of the Company or any of its Affiliates, officers, directors,
stockholders or employees, or any Affiliate of any of such Person, has any material interest in any property, real or personal,
tangible or intangible, including the Company’s Intellectual Property used in or pertaining to the business of the Company,
except for the normal rights of a stockholder, or, to the Company’s Knowledge, any supplier, distributor or customer of the
Company, (b) there are no agreements, understandings or proposed transactions between the Company and any of its officers, directors,
employees, Affiliates, or, to the Company’s Knowledge, any Affiliate thereof, (c) to the Company’s Knowledge, no employee,
officer or director of the Company or any of its Subsidiaries has any direct or indirect ownership interest in any firm or corporation
with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation that competes
with the Company; (d) to the Company’s Knowledge, no member of the immediate family of any officer or director of the Company
is directly or indirectly interested in any Material Contract or (e) there are no amounts owed (cash and stock) to officers, directors
and consultants (salary, bonuses or other forms of compensation).


 


(hh)        OFAC.
None of the Company or any of its Subsidiaries nor, to the Company’s Knowledge, any director, officer, agent, employee, Affiliate
or Person acting on behalf of the Company or any of its Subsidiaries, is currently subject to any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly
or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to
any of the Company’s Subsidiaries, joint venture partner or other Person or entity, towards any sales or operations in any
country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions
administered by OFAC.


 




    	 	18	 



     


    

 


(ii)         Money
Laundering Laws.  The operations of each of the Company or any of its Subsidiaries are and have been conducted at all times
in compliance with the money laundering statutes of applicable jurisdictions, the rules and regulations thereunder all applicable
Governmental Bodies and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental
Body (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any Governmental
Body or any arbitrator involving the Company and/or any Subsidiary with respect to the Money Laundering Laws is pending or, to
the Company’s Knowledge, threatened.


 


(jj)         Disclosure.
Neither the Company nor any Person acting on its behalf has provided any of the Investors or their agents or counsel with any information
that constitutes or might constitute material, non-public information, other than the terms of the transactions contemplated hereby.
The Company understands and confirms that the Investors will rely on the foregoing representation in effecting transactions in
securities of the Company. All disclosure provided to the Investors regarding the Company, the Subsidiaries or the Business and
the transactions contemplated hereby, furnished by or on behalf of the Company (including the Company’s representations and
warranties set forth in this Agreement and the disclosure set forth in any diligence report or business plan provided by the Company
or any Person acting on the Company’s behalf) are true and correct in all material aspects and do 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.


 


(kk)        Internal
Accounting and Disclosure Controls. Except as set forth in the SEC Reports, the Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (a) transactions are executed in accordance with management’s general
or specific authorization, (b) transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability, (c) access to assets is permitted only in accordance with management’s general
or specific authorization and (d) the recorded accountability for assets is compared with the existing assets at quarterly intervals
and appropriate action is taken with respect to any material differences. The Company maintains disclosure controls and procedures
(as such term is defined in Rule 13a-15 under the Exchange Act) that are effective in ensuring that information required to be
disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the rules and forms of the Commission, including, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer
or officers and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure.


 


3.2.         Representations
and Warranties of the Investors. Each Investor hereby, for itself and for no other Investor, makes the following representations
and warranties as of the date hereof and as of the Closing Date to the Company:


 




    	 	19	 



     


    

 


(a)          Organization;
Authority. If such Investor is a business entity, such Investor is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter
into and to consummate the transactions contemplated by the Transaction Documents to which it is a party or a signatory and otherwise
to carry out its obligations thereunder. The execution, delivery and performance by such Investor of the transactions contemplated
by this Agreement has been duly authorized by all necessary corporate or, if such Investor is not a corporation, such partnership,
limited liability company or other applicable like action, on the part of such Investor. Each Transaction Document executed by
such Investor has been duly executed by such Investor, and when delivered by such Investor in accordance with the terms hereof,
will constitute the valid and legally binding obligation of such Investor, enforceable against it in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles
of general application.


 


(b)          Investment
Intent. Such Investor is acquiring the Securities issuable to it under the Transaction Documents as principal for its own account
and not with a view to or for distributing or reselling such Securities or any part thereof, without prejudice, however, to such
Investor’s right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable
federal and state securities laws. Subject to the immediately preceding sentence, nothing contained herein shall be deemed a representation
or warranty by such Investor to hold the Securities for any period of time. Such Investor is acquiring the Securities hereunder
in the ordinary course of its business. Such Investor does not have any agreement or understanding, directly or indirectly, with
any Person to distribute any of the Securities.


 


(c)          Investor
Status. Such Investor is not a registered broker-dealer under Section 15 of the Exchange Act. Such Investor has such experience
in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Securities. Such
Investor acknowledges that an investment in the Securities is speculative and involves a high degree of risk. At the time such
Investor was offered the Securities, it was, and at the date hereof it is, an “accredited investor” as defined in Rule
501(a) under the Securities Act, and such Investor has completed and executed the Investor Questionnaire attached as Exhibit
E to this Agreement.


 


(d)          General
Solicitation. Such Investor is not purchasing the Securities as a result of any advertisement, article, notice, meeting, 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 any other general solicitation or general advertisement.


 


(e)          Access
to Information. Such Investor acknowledges that it has reviewed the Disclosure Materials 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 the Subsidiaries and their respective 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. Neither such inquiries nor any other investigation conducted by or on behalf
of such Investor or its representatives or counsel shall modify, amend or affect such Investor’s right to rely on the truth,
accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction
Documents.


 




    	 	20	 



     


    

 


(f)          Certain
Trading Activities. Such Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Investor, engaged in any transactions in the securities of the Company (including, without limitations,
any Short Sales involving the Company’s securities) since the earlier to occur of (1) the time that such Investor was first
contacted by the Company, the Placement Agent, or any other Person acting on behalf of the Company regarding an investment in the
Company and (2) the 30th day prior to the date of this Agreement. Such Investor covenants that neither it nor any Person
acting on its behalf or pursuant to any understanding with it will engage in any transactions in the securities of the Company
(including Short Sales) prior to the time that the transactions contemplated by this Agreement are publicly disclosed.


 


(g)          Independent
Investment Decision. Such Investor has independently evaluated the merits of its decision to purchase the Securities pursuant
to the Transaction Documents, and such Investor confirms that it has not relied on the advice of any other Investor’s business
and/or legal counsel in making such decision. Such Investor has not relied on the business or legal advice of the Placement Agent
or any of its agents, counsel or Affiliates in making its investment decision hereunder, and confirms that none of such Persons
has made any representations or warranties to such Investor in connection with the transactions contemplated by the Transaction
Documents.


 


(h)          Reliance
on Exemptions. The Investor understands that the Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and the Investor’s compliance with, the representations, warranties, agreements, acknowledgments and
understandings of the Investor set forth herein in order to determine the availability of such exemptions and the eligibility of
the Investor to acquire the Securities. All of the information which the Investor has provided to the Company is true, correct
and complete as of the date this Agreement is signed, and if there should be any change in such information prior to the Closing,
the Investor will immediately provide the Company with such information.


 


(i)          Acknowledgement
of Conflict of Interest. Each Investor acknowledges that (A) Chad Cooper is a managing director and registered representative
of the Placement Agent and Chad Cooper is also a director of the Company, (B) Chad Cooper led the Placement Agent’s efforts
in soliciting Investors and consummating the Offering, and (C) Chad Cooper acted on behalf of the Placement Agent in the Offering
and did not participate as a director of the Company at meetings of the board of directors of the Company or otherwise relating
to the Offering. Each Investor hereby waives the conflict of interest arising as a result of Chad Cooper’s directorship with
the Company and his employment and position with the Placement Agent.


 




    	 	21	 



     


    

 


The Company acknowledges and agrees that
no Investor has made or makes any representations or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in this Section 3.2.


 


ARTICLE
4.

OTHER AGREEMENTS OF THE PARTIES


 


4.1.         Transferability;
Certificate. (a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection
with any transfer of the Securities other than pursuant to an effective registration statement, to the Company, to an Affiliate
of an Investor 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, 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 Securities under
the Securities Act.


 


(b)          Certificates
evidencing Securities will contain the following legend or a substantially similar legend, until such time as they are not required
under Section 4.1(c):


 


THESE SECURITIES AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH
EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.


 


The Company acknowledges
and agrees that an Investor may from time to time pledge, and/or grant a security interest in some or all of the Securities pursuant
to a bona fide margin agreement in connection with a bona fide margin account and, if required under the terms of such agreement
or account, such Investor may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer
would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party
or pledgor shall be required in connection with the pledge, but such legal opinion may be required in connection with a subsequent
transfer following default by the Investor transferee of the pledge. No notice shall be required of such pledge. At the appropriate
Investor’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities
may reasonably request in connection with a pledge or transfer thereof including the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend
the list of selling stockholders thereunder. Except as otherwise provided in Section 4.1(c), any Securities subject to a pledge
or security interest as contemplated by this Section 4.1(b) shall continue to bear the legend set forth in this Section 4.1(b)
and be subject to the restrictions on transfer set forth in Section 4.1(a).


 




    	 	22	 



     


    

 


(c)          Certificates
representing Securities shall be eligible for removal of the restrictive legend (including the legend set forth in Section 4.1(b)):
(i) following any sale of such Securities pursuant to the plan of distribution in an effective registration statement (in compliance
with any prospectus delivery requirements) or (ii) following a sale or transfer of such Securities pursuant to Rule 144 (assuming
the transferee is not an Affiliate of the Company), or (iii) while such Securities are eligible for sale by the selling Investor
without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such
Securities and without volume or manner-of-sale restrictions. The Company agrees that following such time as legends are no longer
required to be set forth on certificates representing Securities under this Section 4.1(c), it will, no longer than three Trading
Days following the delivery by an Investor to the Company or the Transfer Agent of a certificate representing such Securities containing
a restrictive legend, deliver or instruct the Transfer Agent to deliver to such Investor, Securities which are free of all restrictive
and other legends. If the Company is then eligible, certificates for Securities subject to legend removal hereunder shall be transmitted
by the Transfer Agent to an Investor by crediting the prime brokerage account of such Investor with the Depository Trust Company
System as directed by such Investor. If an Investor shall make a sale or transfer of Securities either (x) pursuant to Rule 144
or (y) pursuant to a registration statement and in each case shall have delivered to the Company or the Company’s transfer
agent the certificate representing the applicable Securities containing a restrictive legend which are the subject of such sale
or transfer and a representation letter in customary form (the date of such sale or transfer and Securities delivery being the
“Securities Delivery Date”) and (1) the Company shall fail to deliver or cause to be delivered to such Investor
a certificate representing such Securities that is free from all restrictive or other legends by the third Trading Day following
the Securities Delivery Date and (2) following such third Trading Day after the Securities Delivery Date and prior to the time
such Securities are received free from restrictive legends, the Investor, or any third party on behalf of such Investor, purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Investor of such
Securities (a “Buy-In”), then, in addition to any other rights available to the Investor under the Transaction
Documents and applicable law, the Company shall pay in cash to the Investor (for costs incurred either directly by such Investor
or on behalf of a third party) the amount by which the total purchase price paid for Common Stock as a result of the Buy-In (including
brokerage commissions, if any) exceed the proceeds received by such Investor as a result of the sale to which such Buy-In relates.
The Investor shall provide the Company written notice indicating the amounts payable to the Investor in respect of the Buy-In.
The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section.


 




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4.2.          Furnishing
of Information. As long as any Investor or any transferee owns any Securities, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to the Exchange Act. As long as any Investor owns Securities, if the Company is not required to file
reports pursuant to such laws, it will prepare and furnish to the Investors and make publicly available in accordance with Rule
144(c) such information as is required for the Investors to sell the Securities under Rule 144. The Company further covenants
that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time
to time to enable such Person to sell the Securities without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144.


 


4.3.          Integration.
The Company shall not, and shall use its best efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would
be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act
of the sale of the Securities to the Investors, or that would be integrated with the offer or sale of the Securities for purposes
of the rules and regulations of any Trading Market on which the Common Stock then trades in a manner that would require stockholder
approval of the sale of the Securities to the Investors.


 


4.4.          Subsequent
Registrations. Other than pursuant to the Registration Rights Agreement, prior to the first to occur of (a) the Effective
Date of a Registration Statement resulting in all Registrable Securities (as defined in the Registration Rights Agreement) being
registered for resale pursuant to one or more effective Registration Statements or (b) such time as all Registrable Securities
may be sold by the Investors without volume restrictions pursuant to Rule 144, the Company may not file any registration statement
(other than on Form S-8) with the Commission with respect to any securities of the Company.


 


4.5.          Securities
Laws Disclosure; Publicity. By (i) 9:30 a.m. (New York time) on the Trading Day following the Closing Date, the Company shall
issue a press release, disclosing the transactions contemplated by the Transaction Documents and the Closing and by (ii) 5:30
p.m. (New York time) on the fourth Trading Day following the Closing Date, the Company will file a Current Report on Form 8-K,
disclosing the material terms of the Transaction Documents (and attach as exhibits thereto all existing Transaction Documents)
and the Closing. The Company covenants that following such disclosure, the Investors shall no longer be in possession of any material,
non-public information with respect to the Company or any Subsidiary. In addition, the Company will make such other filings and
notices in the manner and time required by the Commission and the Trading Market on which the Common Stock is quoted. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Investor, or include the name of any Investor in any filing
with the Commission (other than the Registration Statement and any exhibits to filings made in respect of this transaction in
accordance with periodic filing requirements under the Exchange Act) or any regulatory agency or Trading Market, without the prior
written consent of such Investor, except to the extent such disclosure is required by law or Trading Market regulations.


 




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4.6.          Limitation
on Issuance of Future Priced Securities. During the six months following the Closing Date, the Company shall not issue any
“Future Priced Securities” as such term is described by NASD IM-4350-1.


 


4.7.          Indemnification
of Investors. In addition to the indemnity provided in the Registration Rights Agreement, the Company will indemnify and hold
the Investors and their respective directors, officers, shareholders, partners, members, affiliates, employees and agents (each,
an “Investor 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 in respect thereof (collectively, “Losses”) that any such Investor Party may suffer or
incur as a result of or relating to any misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement
made by any of the Company in any Transaction Document or in any certificate or other instrument delivered by or on behalf of the
Company. In addition to the indemnity contained herein, the Company will reimburse each Investor Party for its reasonable legal
and other expenses (including the cost of any investigation, preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred. Except as otherwise set forth herein, the mechanics and procedures with respect to the
rights and obligations under this Section 4.7 shall be the same as those set forth in Section 5 of the Registration Rights Agreement.


 


4.8.          Non-Public
Information. The Company covenants and agrees that, except as specifically contemplated by the Transaction Documents, neither
it nor any other Person acting on its behalf will provide any Investor or its agents or counsel with any information that the Company
believes constitutes material non-public information, unless prior thereto such Investor shall have executed a written agreement
regarding the confidentiality and use of such information. The Company understands and confirms that each Investor shall be relying
on the foregoing representations in effecting transactions in securities of the Company.


 


4.9.          Listing
of Common Stock. The Company agrees, (i) if the Company applies to have the Common Stock traded on any other Trading Market,
it will include in such application the Shares, and will take such other action as is necessary or desirable to cause the Shares
to be listed on such other Trading Market as promptly as possible, and (ii) the Company will take all action reasonably necessary
to continue the listing and/or quotation and trading of its Common Stock on a Trading Market and will comply in all material respects
with the Company’s reporting, filing and other obligations under the bylaws or rules of each applicable Trading Market.


 


4.10.         Participation
in Future Financing.


 


(a)          From
the date hereof until the two year anniversary of the Final Closing Date, upon any issuance of securities by the Company or any
of its Subsidiaries (or any resulting Person due to any spin-outs) in an offering pursuant to which any of the foregoing raises
gross proceeds of at least $1,000,000 through the sale of Common Stock or Common Stock Equivalents (a “Subsequent Financing”),
each Investor shall have the right to purchase up to such Investor’s Proportionate Share (as defined below) of Common Stock
or Common Stock Equivalents sold in such Subsequent Financing on the same terms, conditions and price provided for in the Subsequent
Financing. For purposes of this Section 4.10, an Investor’s “Proportionate Share” means the percentage
of securities sold in such Subsequent Financing that is equal to such Investor’s percentage ownership interest in the Company
as of immediately after the Final Closing on a fully-diluted basis (assuming for this purpose the conversion, exercise or exchange
of all securities of the Company that are outstanding as of the Final Closing that are convertible into, or exercisable or exchangeable
for, Common Stock of the Company).


 




    	 	25	 



     


    

 


(b)          At
least 10 Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Investor a written notice
of its intention to effect a Subsequent Financing (a “Pre-Notice), which Pre-Notice shall ask such Investor if it
wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon
the request of an Investor, and only upon a request of such Investor made within one trading day following the receipt by the Investor
of the Pre-Notice, for a Subsequent Financing Notice, the Company shall promptly and no later than one Trading Day after such request,
deliver a Subsequent Financing Notice to such Investor. The Subsequent Financing Notice shall describe in reasonable detail the
proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the person or persons
through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating
thereto as an attachment.


 


(c)          Any
Investor desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30
p.m. (New York City time) on the 5th trading day after all of the Investors have received the Pre-Notice of what portion
of the Subsequent Financing the Investor is willing to purchase, which portion may not exceed the Investor’s Proportionate
Share of the Subsequent Financing, and that the Investor has such funds ready, willing, and available for investment on the terms
set forth in the Subsequent Financing Notice. If the Company receives no notice from an Investor as of such 5th trading
day, such Investor shall be deemed to have notified the Company that it does not elect to participate.


 


(d)          Notwithstanding
anything to the contrary contained in this Section 4.10, if the Board of Directors of the Company unanimously agrees (and memorializes
such agreement in written minutes of a meeting or a written consent) that providing advance notice to the Investors of a Subsequent
Financing and including the Investors in the initial closing of a Subsequent Financing may materially adversely affect the Company’s
ability to consummate the Subsequent Financing, then the Company may consummate a Subsequent Financing prior to the time that the
Company provides a Pre-Notice or Subsequent Financing Notice to Investors or sells securities to the Investors under this Section
4.10 in such Subsequent Financing so long as the Company is otherwise able to comply with this Section 4.10 and promptly provide
such Pre-Notice and, if applicable, Subsequent Notice, to Investors and consummate an additional closing of the Subsequent Financing
that includes the participating Investors; and, provided further, that the Company reserves the requisite number of securities
to be sold in such Subsequent Financing such that all Investors desiring to participate therein in accordance with this Section
4.10 may so participate.


 




    	 	26	 



     


    

 


(e)          The
Company must provide the Investors with a second Subsequent Financing Notice, and the Investors will again have the right of participation
set forth above in this Section 4.10, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated
for any reason on the terms set forth in such Subsequent Financing Notice within 30 trading days after the date of the initial
Subsequent Financing Notice.


 


ARTICLE
5.

CONDITIONS PRECEDENT TO CLOSING


 


5.1.          Conditions
Precedent to the Obligations of the Investors to Purchase Securities. The obligation of the Investors to acquire Securities
at the Closing is subject to the satisfaction or waiver by each Investor, at or before the Closing, of each of the following conditions:


 


(a)          Representations
and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing as though made on and as of such date;


 


(b)          Performance.
The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing;


 


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


 


(d)          Adverse
Changes. Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably could
have or result in a Material Adverse Effect or a material adverse change with respect to the Company or the Subsidiaries;


 


(e)          Company
Deliverables. The Company shall have delivered the Company Deliverables in accordance with Section 2.3(a);


 


(f)          Approvals.
The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for
consummation of the purchase and sale of the Securities and the consummation of the other transactions contemplated by the Transaction
Documents, all of which shall be in full force and effect;


 


(g)          Stop
Orders. No stop order or suspension of trading shall have been imposed by the Commission or any other governmental or regulatory
body having jurisdiction over the Company or the market(s) where the Common Stock is listed or quoted, with respect to public trading
in the Common Stock;


 


(h)          Termination.
This Agreement shall not have been terminated as to such Investor in accordance with Section 6.5.


 




    	 	27	 



     


    

 


5.2.          Conditions
Precedent to the Obligations of the Company to Sell Securities. The obligation of the Company to sell Securities at the Closing
is subject to the satisfaction or waiver by the Company, at or before the Closing, of each of the following conditions:


 


(a)          Representations
and Warranties. The representations and warranties of each Investor contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made on and as of such date;


 


(b)          Performance.
Each Investor shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by such Investor at or prior to the Closing;


 


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


 


(d)          Investor
Deliverables. Each Investor shall have delivered this Agreement and the Registration Rights Agreement, each duly executed by
such Investor and a completed Selling Holder Questionnaire (as defined in the Registration Rights Agreement) and Investor Questionnaire
in the form attached as Exhibit E to this Agreement.


 


(e)          Termination.
This Agreement shall not have been terminated as to such Investor in accordance with Section 6.5.


 


ARTICLE
6.

MISCELLANEOUS


 


6.1.          Fees
and Expenses. 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 the
Transaction Documents. The Company shall pay all stamp and other taxes and duties levied in connection with the sale of the Securities.


 


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


 


6.3.          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 (i) facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the facsimile number
specified in this Section or (ii) electronic mail (i.e., Email) prior to 6:30 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 (i) facsimile at the facsimile
number specified in this Section or (ii) electronic mail (i.e., Email) on a day that is not a Trading Day or later than 6:30 p.m.
(New York City time) on any Trading Day, or (c) the 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, if sent by any
means other than facsimile or Email transmission. The address for such notices and communications shall be as follows:


 




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	If to the Company:	Research Solutions, Inc.
	 	5435 Balboa Blvd.
	 	Suite 202
	 	Encino, CA 91316
	 	Attention: Chief Financial Officer
	 	Fax: 818-646-2199
	 	Email: legal@reprintsdesk.com
	 	 
	With a copy to:	Stubbs Alderton & Markiles, LLP
	 	15260 Ventura Blvd.
	 	20th Floor
	 	Sherman Oaks, CA 91403
	 	Attention: Louis Wharton
	 	Fax: (818) 444-6309
	 	Email: lwharton@stubbsalderton.com
	 	 
	If to the Investor:	To the Investor’s address as specified on Investor’s Signature Page.


 


or such other address as may be designated
in writing hereafter, in the same manner, by such Person.


 


6.4.         Amendments;
Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment,
by the Company and the holders of a majority of the Shares sold to Investors under this Agreement or, in the case of a waiver,
by the party against whom enforcement of any such waiver is sought (and if such party is the Investors, then by the holders of
a majority of the Shares sold to Investors under this Agreement). 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 either party to exercise
any right hereunder in any manner impair the exercise of any such right.


 


6.5.         Termination.
This Agreement may be terminated prior to Closing:


 


(a)          by
written agreement of the Investors holding a majority of the Shares sold to Investors under this Agreement and the Company; and


 




    	 	29	 



     


    

 


(b)          by
the Company or an Investor (as to itself but no other Investor) upon written notice to the other, if the Closing shall not have
taken place by 6:30 p.m. Eastern time on or before June 30, 2016; provided, that the right to terminate this Agreement under this
Section 6.5(b) shall not be available to any Person whose failure to comply with its obligations under this Agreement has been
the cause of or resulted in the failure of the Closing to occur on or before such time; provided however that such termination
will not affect the right of any party to sue for any breach by any other party (or parties).


 


In the event of a termination
pursuant to this Section, the Company shall promptly notify all non-terminating Investors.


 


6.6.          Construction.
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. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as
if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue
of the authorship of any provisions of this Agreement or any of the Transaction Documents.


 


6.7.          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of
the Investors. Any Investor may assign any or all of its rights under this Agreement to any Person to whom such Investor assigns
or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities,
by the provisions hereof that apply to the “Investors.”


 


6.8.          No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Section 4.7 (as to each Investor Party) and any provision expressly relating to the Placement Agent, which is an intended
third party beneficiary of this Agreement.


 


6.9.          Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of
conflicts of law thereof. Each party agrees that all 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, employees or agents) shall be commenced exclusively in the New York Courts. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts 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 the any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject
to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum.
Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such 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 manner
permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right
to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
If either party shall commence a Proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such Proceeding.


 




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6.10.         Survival.
The representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Securities
for 18 months following the Closing Date.


 


6.11.         Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile or e-mail
transmission, 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 e-mail signature page were an original thereof.


 


6.12.         Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Agreement.


 


6.13.         Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
the Transaction Documents, whenever any Investor exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Investor 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.


 


6.14.         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, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under
such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities.
If a replacement certificate or instrument evidencing any Securities is requested due to a mutilation thereof, the Company may
require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.


 




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6.15.         Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Investors 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 described in the
foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.


 


6.16.         Payment
Set Aside. To the extent that the Company makes a payment or payments to any Investor pursuant to any Transaction Document
or an Investor 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.


 


6.17.         Independent
Nature of Investors’ Obligations and Rights. The obligations of each Investor under any Transaction Document are several
and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance
of the obligations of any other Investor under any Transaction Document. The decision of each Investor to purchase Securities
pursuant to the Transaction Documents has been made by such Investor independently of any other Investor. Nothing contained herein
or in any Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors
as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors 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 Investor acknowledges that no other Investor has acted as agent for such Investor in connection with making its
investment hereunder and that no Investor will be acting as agent of such Investor in connection with monitoring its investment
in the Securities or enforcing its rights under the Transaction Documents. Each Investor 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 Investor to be joined as an additional party in any proceeding for such
purpose. The Company acknowledges that each of the Investors has been provided with the same Transaction Documents for the purpose
of closing a transaction with multiple Investors and not because it was required or requested to do so by any Investor.


 


6.18.         Limitation
of Liability. Notwithstanding anything herein to the contrary, the Company acknowledges and agrees that the liability of an
Investor arising directly or indirectly, under any Transaction Document of any and every nature whatsoever shall be satisfied solely
out of the assets of such Investor, and that no trustee, officer, other investment vehicle or any other Affiliate of such Investor
or any investor, shareholder or holder of shares of beneficial interest of such an Investor shall be personally liable for any
liabilities of such Investor.


 




    	 	32	 



     


    

 


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.


 


	 	COMPANY:
	 	 
	 	RESEARCH SOLUTIONS, INC. 
	 	 	 
	 	By:	/s/ Peter Derycz
	 	 	Name: Peter Derycz
	 	 	Title: Chief Executive Officer
	 	 	 
	 	INVESTORS:
	 	 
	 	The Investors executing the Signature Page in the form attached hereto as Annex
    A and delivering the same to the Company or its agents shall be deemed to have executed this Agreement and agreed to the
    terms hereof.


 




     


     


    

 


Annex A


 


Securities Purchase Agreement


Investor Counterpart Signature Page


 


The undersigned, desiring
to: (i) enter into this Securities Purchase Agreement, dated as of June 23, 2016 (the “Agreement”), between
the undersigned, Research Solutions, Inc., a Nevada corporation (the “Company”), and the other parties thereto,
in or substantially in the form furnished to the undersigned and (ii) purchase the securities of the Company appearing below, hereby
agrees to purchase such securities from the Company as of the Closing and further agrees to join the Agreement as a party thereto,
with all the rights and privileges appertaining thereto, and to be bound in all respects by the terms and conditions thereof.


 


IN WITNESS WHEREOF,
the undersigned has executed the Agreement as of June 23, 2016.


 


	 	Name and Address, Fax No. and Social Security No./EIN of Investor:
	 	 
	 	 
	 	 
	 	 


 


	 	Fax No.: 	 
	 	 	 
	 	Soc. Sec. No./EIN:	 


 


	 	If a partnership, corporation, trust or other business entity:
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


	 	If an individual:	 
	 	 	 
	 	Signature: 	 
	 	 	 
	 	Investment Amount: 	 
	 	 	 
	 	Amount of Units to be Purchased:	 


 


	 	Account Registration Type (check one)
	 	 
	 	 ̈ Individual Account
	 	 
	 	 ̈ Joint Account
	 	 
	 	 ̈ Individual Retirement Accout
	 	 
	 	 ̈ Corporation/Pratnership/Other
	 	 
	 	
         ̈ Trust

        



 




     


     


    

 


EXHIBIT A


 


SCHEDULE OF INVESTORS


 


	Name	 	Investment
 Amount	 	 	Number of
 Shares	 	 	Number of
 Warrants	 
	12 West Capital Fund LP	 	$	2,935,000	 	 	 	2,935,000	 	 	 	880,500	 
	12 West Capital Offshore Fund LP	 	$	2,065,000	 	 	 	2,065,000	 	 	 	619,500	 
	John Regazzi	 	$	75,000	 	 	 	75,000	 	 	 	22,500	 
	Chad Cooper	 	$	50,000	 	 	 	50,000	 	 	 	15,000	 
	Merrill McPeak	 	$	25,000	 	 	 	25,000	 	 	 	7,500	 
	Peter Derycz	 	$	20,000	 	 	 	20,000	 	 	 	6,000	 
	Marc Nissan	 	$	10,000	 	 	 	10,000	 	 	 	3,000	 
	Alan Urban	 	$	6,000	 	 	 	6,000	 	 	 	1,800	 
	Ian Palmer	 	$	5,000	 	 	 	5,000	 	 	 	1,500	 
	Scott Ahlberg	 	$	5,000	 	 	 	5,000	 	 	 	1,500	 
	Janice Peterson	 	$	4,000	 	 	 	4,000	 	 	 	1,200	 
	TOTALS	 	$	5,200,000	 	 	 	5,200,000	 	 	 	1,560,000	 



 




     


     


    

 


EXHIBIT B


 


IRREVOCABLE TRANSFER AGENT INSTRUCTIONS


 


(Omitted)


 




     


     


    

 


EXHIBIT C


 


REGISTRATION RIGHTS AGREEMENT


 


(Omitted and Filed as Exhibit 10.2 to
Form 8-K)


 




     


     


    

 


EXHIBIT D


 


FORM OF WARRANT


 


(Omitted and Filed as Exhibit 10.3 to
Form 8-K)


 




     


     


    

 


EXHIBIT E


 


INVESTOR QUESTIONNAIRE


 


(Omitted)