Exhibit 10.1


 


SECURITIES PURCHASE AGREEMENT


 


This Securities Purchase
Agreement (this “Agreement”) is dated as of August 15, 2019, between Conversion Labs, Inc., a Delaware corporation
and includes any successor Company thereto (the “Company”), and each purchaser identified on the signature pages
hereto (each, including its successors and permitted assigns, a “Purchaser” and collectively, the “Purchasers”).


 


WHEREAS, the Company
and Purchasers desire to enter into this Agreement, pursuant to which the Purchasers are to be granted the right to acquire securities
of the Company as set forth herein and


 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser,
and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described
in this Agreement (the “Offering”).


 


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


 


ARTICLE I.

DEFINITIONS


 


1.1 Definitions. In addition to the
terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the meanings given
to such terms in the Notes (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1:


 


“Accredited Investor” shall have
the meaning ascribed to such term in Section 3.2(c).


 


“Acquiring Person” shall have the
meaning ascribed to such term in Section 4.7.


 


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


 


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


 


“Applicable
Law” shall mean any law, rule or regulation of any governmental authority or jurisdiction applicable to any party to
this Agreement and Subsidiaries, as the case may be.


 


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


 


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


 


“Buy-In”
shall have the meaning ascribed to such term in Section 4.1(h).


 


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


 




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


 


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


 


“Common Stock”
means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such securities
may hereafter be reclassified or changed.


 


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


 


“Company Counsel”
means, Lucosky Brookman, 101 Wood Avenue South, Woodbridge, NJ 08830, Attn: Lawrence Metelitsa, Esq., facsimile: (732) 395-4401.


 


“Conversion
Price” shall have the meaning ascribed to such term in the Notes.


 


“DGCL” means the Delaware General
Corporation Law.


 


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


 


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


 


“Effective Date”
means the earliest of the date that (a) a Registration Statement has been declared effective by the Commission with respect to
all of the Underlying Shares (as defined herein) and has been continuously effective for not less than sixty (60) calendar days,
or (b) (i) all of the Underlying Shares have been sold pursuant to Rule 144, or (ii) may be sold by the holders thereof pursuant
to Rule 144 without the requirement for the Company to be in compliance with the current public information requirements of Rule
144 and without volume or manner-of-sale restrictions, and (c) Company counsel has delivered to the Transfer Agent and Purchasers
a standing written unqualified opinion acceptable to the Transfer Agent that resales may then be made by such holders of the Underlying
Shares pursuant to an effective Registration Statement or the exemption described in (b)(ii) above, which opinion shall be in form
and substance reasonably acceptable to such Purchasers.


 


“Escrow Agent”
means G&M.


 


“Escrow Agreement”
means the escrow agreement to be employed in connection with the sale of the Securities, a copy of which is annexed hereto as Exhibit
C.


 


“Equity Line
of Credit” shall have the meaning ascribed to such term in Section 4.13.


 


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


 


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


 




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“Exempt Issuance”
means the issuance of (a) shares of Common Stock and options to officers, directors, or employees of the Company after the Closing
Date up to the amounts and on the terms set forth on Schedule 3.1(g) consistent with past practices pursuant to the Stock
Option Plan, (b) securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on
the date of this Agreement, provided that such securities and any term thereof have not been amended since the date of this Agreement
to increase the number of such securities or to decrease the issue price, exercise price, exchange price or conversion price of
such securities and which securities and the principal terms thereof are set forth on Schedule 3.1(g), and described in
the SEC Reports, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested
directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which
is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business
of the Company and shall be intended to provide to the Company substantial additional benefits in addition to the investment of
funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital
or to an entity whose primary business is investing in securities, (d) as set forth on Schedule 3.1(g), and (e) securities
issued or issuable to the Purchasers and their assigns pursuant to this Agreement, the Notes or the Warrants and other Transaction
Documents including without limitation, Section 4.17 and Section 4.23 herein, or upon exercise, conversion or exchange of any such
securities.


 


“Exercise Price”
shall have the meaning ascribed to such term in the Warrants.


 


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


 


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


 


“FDA Product”
shall have the meaning ascribed to such term in Section 3.1(nn).


 


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


 


“Form 8-K”
shall have the meaning ascribed to such term in Section 4.6.


 


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


 


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


 


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


 


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


 


“Investor Questionnaire”
means the form of Accredited Investor Questionnaire annexed hereto as Exhibit E.


 


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


 


“Legal Opinion”
shall have the meaning ascribed to such term in Section 2.2(a)(ii).


 


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


 




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


 


“Listing Default”
shall have the meaning ascribed to such term in Section 4.11(b).


 


“Lockup Agreement”
means the form of Lockup Agreement annexed hereto as Exhibit G.


 


“Majority in
Interest” shall have the meaning ascribed to such term in Section 5.5.


 


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


 


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


 


“Maximum Rate”
shall have the meaning ascribed to such term in Section 5.17.


 


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


 


“Notes”
means the senior secured convertible notes issuable pursuant to this Agreement, in the form of Exhibit A hereto.


 


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


 


“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.17(a).


 


“Permitted Indebtedness”
means (a) any liabilities for borrowed money or amounts owed not in excess of $100,000 in the aggregate (other than trade accounts
payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect
of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet
(or the notes thereto) not affecting more than $100,000 in the aggregate, except guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of business; (c) the present value of any lease payments
not in excess of $100,000 due under leases required to be capitalized in accordance with GAAP; and (d) any liabilities for borrowed
money that are junior to the Note pursuant to an intercreditor agreement acceptable to Purchasers, and the holders of which are
not granted any security interest, including a credit line of up to $1,000,000 with a financial institution engaged in providing
credit whose business does not generally include equity investing.


 


“Permitted Lien”
means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges
or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and
by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been
established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien,
and (c) Liens in connection with Permitted Indebtedness under clauses (a), and (b) thereunder, and Liens incurred in connection
with Permitted Indebtedness under clause (c) thereunder, provided that such Liens are not secured by assets of the Company or its
Subsidiaries other than the assets so acquired or leased.


 




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“Person”
means an individual, corporation or company, 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.


 


“Prior Notes”
means the secured convertible promissory notes issued in the Prior Offering.


 


“Prior Offering”
means the offer and sale by the Company of Prior Notes and Prior Warrants to some or all of the Purchasers hereunder pursuant to
a securities purchase agreement dated May 29, 2018, which offering was consummated on May 29, 2018.


 


“Prior Purchasers”
means the purchasers who acquired Prior Notes and Prior Warrants under the Prior Offering and their successors, and assigns, if
any.


 


“Prior Warrants”
means the Common Stock purchase warrants issued in the Prior Offering.


 


“Pre-Notice” shall have the meaning ascribed
to such term in Section 4.17(b).


 


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


 


“Pro-Rata Portion”
shall have the meaning ascribed to such term in Section 4.17(e).


 


“Public Information
Failure” shall have the meaning ascribed to such term in Section 4.3(b).


 


“Public Information
Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).


 


“Purchaser Party”
shall have the meaning ascribed to such term in Section 4.10.


 


“Registration
Statement” means an effective registration statement filed with the Commission and covering the resale of all of the
Underlying Shares held or issuable to each Purchaser pursuant to or in connection with the Transaction Documents.


 


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


 


“Required Minimum”
means, as of any date, 125% of the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the
future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants or
conversion in full of all Notes, ignoring any conversion or exercise limits set forth therein, and assuming that any previously
unconverted Notes will be held until the third anniversary of the issue date of such Notes.


 


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


 


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


 




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“Securities”
means the Notes, the Warrants, and the Underlying Shares.


 


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


 


“Short Sales”
means “short sales” as defined in Rule 200 of 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)
whether such transactions are made through U.S. or non-U.S. broker dealers or foreign regulated brokers.


 


“Stock Option
Plans” means the terms governing the issuance of stock options including but not limited to Service-Based Stock Options
and Performance-Based Stock Options as described in the SEC Reports.


 


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


 


“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.17(a).


 


“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.17(b).


 


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


 


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


 


“Trading Day”
means a day on which the principal Trading Market is open for trading for three or more hours, and if the Company has no Trading
Market, shall mean a Business Day.


 


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


 


“Transaction
Documents” means this Agreement, the Notes, the Warrants, Lockup Agreements, the Escrow Agreement, all exhibits and schedules
thereto and hereto and any other documents or agreements executed by any party hereto in connection with the transactions contemplated
hereunder.


 




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“Transfer Agent”
means Worldwide Stock Transfer LLC, located at One University Plaza, Hackensack, NJ 07601 and any successor transfer agent of the
Company.


 


“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Notes and upon exercise of the Warrants
and issued and issuable in lieu of the cash payment of interest on the Notes in accordance with the terms of the Notes and any
other shares of Common Stock issued or issuable to a Purchaser in connection with or pursuant to the Securities or Transaction
Documents.


 


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


 


“Variable Priced
Equity Linked Instruments” shall have the meaning ascribed to such term in Section 4.13.


 


“Variable Rate
Transaction” shall have the meaning ascribed to such term in Section 4.13.


 


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


 


“Warrants”
means the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof in
the form of Exhibit B attached hereto.


 


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


 


ARTICLE II.


PURCHASE AND SALE


 


2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, an aggregate of up to $1,350,000 principal amount of Notes together with Warrants as determined pursuant to
Section 2.2(a) (such purchase and sale being a “Closing”). Each Purchaser shall deliver to the Escrow Agent
such Purchaser’s Subscription Amount, and the Company shall deliver to each Purchaser its respective Note and Warrants, as
determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2
deliverable at a Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, each Closing shall
occur at the offices of G&M or such other location as the parties shall mutually agree. Notwithstanding anything herein to
the contrary, the initial Closing Date shall occur on or before August 1, 2019. The Closing Date for the final Closing shall occur
on or before August 15, 2019 (the “Termination Date”). With respect to any Closing not held on or before the
Termination Date, the Escrow Agent shall cause (i) all subscription documents executed by the Company or a Purchaser to be returned
to the Company or such Purchaser, as applicable, and (ii) each Subscription Amount to be returned, without interest or deduction
to the Purchaser who delivered such Subscription Amount. Notwithstanding of the date of any Closing subsequent to the initial Closing,
all time effective clauses in the Transaction Documents shall commence on the initial Closing Date and Transaction Documents will
be deemed modified Mutatis Mutandum in connection with such subsequent Closings, if any, that take place after the initial
Closing. The Maturity Date of the Notes issued at all Closings subsequent to the initial Closing and the exercise period of the
Warrants issued at such Closings shall be the same as the Maturity Date of the Notes issued at the initial Closing and be co-terminous
with the exercise period of the Warrants issued at the initial Closing.


 




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NO MINIMUM AMOUNT
OF NOTES MUST BE SOLD IN ORDER FOR THE COMPANY TO ACCEPT ANY SUBSCRIPTIONS, AND ALL NET PROCEEDS OF THE OFFERING WILL BE IMMEDIATELY
AVAILABLE FOR COMPANY PURPOSES UPON CLOSING.


 


2.2 Deliveries.


 


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


 


(i) this Agreement
duly executed by the Company;


 


(ii) a legal
opinion of Company Counsel, substantially in the form of Exhibit D attached hereto;


 


(iii) a Note
with a principal amount of $1.20 for each $1.00 of Subscription Amount paid by each Purchaser, registered in the name of such Purchaser,
as set forth on the signature pages hereto;


 


(iv) Warrants
registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100% of such Purchaser’s
Subscription Amount divided by the Conversion Price in effect on the Closing Date, having a per share Exercise Price as set forth
therein, subject to adjustment as provided herein and therein;


 


(v) the Escrow
Agreement duly executed by the Company and Escrow Agent;


 


(vi) the Lockup
Agreement signed by each of the holders of the Company’s securities identified on Schedule 2.2(a)(vii);


 


(vii) a certificate
executed on behalf of the Company by its Principal Executive Officer or Chief Executive Officer (each as defined in the Exchange
Act) of the Company, dated as of the Closing Date, in which such officer shall certify that the conditions set forth in Section
2.3(b) have been fulfilled; and


 


(viii) a certificate
executed on behalf of the Company by its Secretary containing (i) copies of the text of the resolutions by which the corporate
action on the part of the Company necessary to approve this Agreement and the other Transaction Documents and the transactions
and actions contemplated hereby and thereby, which shall be accompanied by a certificate of the corporate secretary or assistant
corporate secretary of the Company dated as of the Closing Date certifying to the Purchasers that such resolutions were duly adopted
and have not been amended or rescinded, (ii) an incumbency certificate dated as of the Closing Date executed on behalf of the Company
by its corporate secretary or one of its assistant corporate secretaries certifying the office of each officer of the Company executing
this Agreement, or any other agreement, certificate or other instrument executed pursuant hereto, and (iii) copies of (A) the Company’s
Certificate of Incorporation and bylaws in effect on the Closing Date, and (B) the certificate evidencing the good standing of
Company as of a day within five (5) Business Days prior to the Closing Date.


 




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


 


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


 


(ii) such Purchaser’s
Subscription Amount by wire transfer or as otherwise permitted under the Escrow Agreement, to the Escrow Agent (except that the
payment of the due diligence described on Schedule 3.1(s) will be deemed to have been received by the Company upon the occurrence
of the first Closing and the Escrow Agent is instructed to deem such amount to have been paid and delivered to the Company; and


 


(iii) Accredited
Investor Questionnaire duly executed by each Purchaser.


 


(c) Anything to the contrary
herein notwithstanding, any Purchaser may elect to bypass the escrow arrangement described herein and arrange for its Closing directly
with the Company without employing the Escrow Agent as an intermediary.


 


2.3 Closing Conditions.


 


(a) The obligations of
the Company hereunder to effect the Closing, unless waived by the Company, are subject to the following conditions being met:


 


(i) the accuracy
in all material respects (determined without regard to any materiality, Material Adverse Effect or other similar qualifiers therein)
on the date of this Agreement and the Closing Date of the representations and warranties of the Purchasers contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);


 


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


 


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


 


(iv) the Escrow
Agent shall have received executed signature pages to this Agreement and the Escrow Agreement from at least one Purchaser showing
an agreement to purchase a Note and Warrants hereunder and the Escrow Agent shall have received the corresponding Subscription
Amount from such Purchaser, in cash.


 




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(b) The respective obligations
of a Purchaser hereunder to effect the Closing, unless waived by such Purchaser, are subject to the following conditions being
met:


 


(i) the accuracy
in all material respects (determined without regard to any materiality, Material Adverse Effect or other similar qualifiers therein)
on the date of this Agreement and Closing Date of the representations and warranties of the Company contained herein (unless as
of a specific date therein in which case they shall be accurate as of such date);


 


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


 


(iii) the Escrow
Agent shall have received executed signature pages to this Agreement from at least one Purchaser showing an agreement to purchase
a Note and Warrants hereunder for not less than $600,000 of Subscription Amount (inclusive of due diligence fees payable in connection
therewith as described in Section 3.1(s)) and the Escrow Agent shall have received the corresponding Subscription Amount from such
Purchaser in cash;


 


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


 


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


 


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


 


2.4 Purchaser’s
Right To Terminate. Anything in any of the Transaction Documents to the contrary notwithstanding, each Purchaser has the right
to demand and receive from the Escrow Agent such Purchaser’s Subscription Amount and other items delivered by such Purchaser
to the Escrow Agent in connection therewith, at any time until a Closing takes place in connection with such Subscription Amount.
The Company and each Purchaser acknowledges that the Escrow Agent is acting as agent and representative for the Purchaser with
respect to the Purchaser’s Subscription Amount and at no time is or will be holding any funds on behalf of the Company until
a Closing actually occurs.


 


ARTICLE III.


REPRESENTATIONS AND WARRANTIES


 


3.1 Representations
and Warranties of the Company. Except as set forth in the SEC Reports or the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof and shall qualify any representation made herein only to the extent of the disclosure contained in
the corresponding or cross-referenced section of the Disclosure Schedules, the Company hereby makes the following representations
and warranties to each Purchaser:


 




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(a) Subsidiaries.
All of the direct and indirect Subsidiaries of the Company and the Company’s ownership interests therein are set forth on
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, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.


 


(b) Organization and
Qualification. The Company and each Subsidiary is an entity duly incorporated or otherwise organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority
to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary
is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and each Subsidiary is duly qualified to conduct business and is in good
standing as a foreign Person or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be,
would not reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, or condition (financial or
otherwise) of the Company and each Subsidiary, taken as a whole, or (iii) a material adverse effect on the Company’s ability
to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse Effect”) and, no Proceeding has been instituted in any such jurisdiction revoking, limiting
or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 


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


 


(d) No Conflicts.
The execution, delivery and performance by the Company and all Persons other than the Purchasers of this Agreement and the other
Transaction Documents, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby to which it is a party do not and will not: (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s or such other Person’s certificate or articles of incorporation, bylaws or other organizational or charter
documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default)
under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others
any rights of termination, amendment, acceleration, adjustment, exchange, reset, exercise or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt, equity or other instrument (evidencing Company or Subsidiary equity,
debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of
the Company or any Subsidiary is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary
or such other Person 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 this clause (iii), would not have or result in a Material
Adverse Effect.


 




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(e) Filings, Consents
and Approvals. The Company and each Subsidiary is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other provincial or foreign, domestic federal, state, local
or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than: (i) the filings required pursuant to Section 4.6 of this Agreement, (ii) the notice and/or application(s)
to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Underlying Shares for trading
thereon in the time and manner required thereby, all of which shall have been effectuated prior to the Closing, and (iii) the filing
of a Form D with the Commission (collectively, the “Required Approvals”).


 


(f) Issuance of the
Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other
than restrictions on transfer arising pursuant to applicable securities laws. The Notes and Warrants are duly authorized and, when
issued and delivered in accordance with the applicable Transaction Documents, will be enforceable in accordance with their terms.
The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying
Shares at least equal to the Required Minimum on the date hereof.


 


(g) Capitalization.
The capitalization of the Company is as set forth on Schedule 3.1(g). The Company has not issued any capital stock since
its most recently filed periodic report. Except as set forth on Schedule 3.1(g), no Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction
Documents. Except as disclosed on Schedule 3.1(g), there are no outstanding options, employee or incentive stock option
plans, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights
or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire
any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is
or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. Except as set forth on Schedule
3.1(g), the issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities
to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities nor trigger any other rights of any Person. All of the outstanding
shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in material
compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive
rights or similar rights to subscribe for or purchase securities. Except as contemplated by Section 3.1(e), no further approval
or authorization of any stockholder, the Board of Directors or other Person or governmental or quasi-governmental entity is required
for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements
with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between
or among any of the Company’s stockholders. The Company is not a party to any Variable Rate Transaction and as of Closing,
there will not be outstanding any Equity Line of Credit nor Variable Priced Equity Linked Instruments as of the Closing.


 




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(h) SEC Reports;
Financial Statements. The Company is subject to the reporting requirements under Sections 12(g), and 13(a) or 15(d) under
the Exchange Act. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by
the Company under the Securities Act and the Exchange Act, including pursuant to Sections 12(b), 12(g), 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein filed not later
than ten (10) days prior to the date hereof, being collectively referred to herein as the “SEC Reports”) on
a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”)
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
included in the SEC Reports may not contain all footnotes required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
The Company is, and has no reason to believe that it will not in the foreseeable future continue to be in compliance with all
its reporting requirements under the Securities Act and Exchange Act.


 


(i) Material Changes;
Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within
the SEC Reports, except as specifically disclosed in a subsequent SEC Report or on Schedule 3.1(i): (i) there has been no
event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse Effect, (ii)
the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v)
the Company has not issued any equity securities to any officer, director or Affiliate except pursuant to the Stock Option Plan.
The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance
of the Securities contemplated by this Agreement, or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance,
occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its
Subsidiaries or their respective businesses, properties, operations, assets or financial condition, that would be required to be
disclosed by the Company under Applicable Law at the time this representation is made or deemed made that has not been publicly
disclosed at least two Trading Days prior to the date that this representation is made.


 




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


 


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


 


(l) Compliance.
To the Company’s knowledge, neither the Company nor any Subsidiary, (i) is in default under or in violation of (and no event
has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it
or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment,
decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule,
ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws
relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor
matters, except in each case as would not reasonably be expected to result in a Material Adverse Effect.


 


(m) Regulatory Permits.
The Company and each Subsidiary 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 and as
actually conducted, except where the failure to possess such permits would not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.


 




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


 


(o) Intellectual
Property. All of the Company’s and Subsidiary’s material Intellectual Property Rights are disclosed as required
by Applicable Law in the SEC Reports.


 


(i) The term “Intellectual
Property Rights” means:


 


		1.	the name of the Company and each Subsidiary, all fictional
business names, trading names, registered and unregistered trademarks, service marks, and applications of the Company and each
Subsidiary (collectively, “Marks”);



 


		2.	all patents and patent applications of the Company and
each Subsidiary (collectively, “Patents”);



 


		3.	all copyrights in both published works and unpublished
works of the Company and each Subsidiary (collectively, “Copyrights”);



 


		4.	all rights in mask works of the Company and each Subsidiary
(collectively, “Rights in Mask Works”); and



 


		5.	all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process technology, plans, drawings, and blue prints (collectively, “Trade
Secrets”); owned, used, or licensed by the Company and each Subsidiary as licensee or licensor.



 


(ii) Agreements.
Except as set forth in the SEC Reports, there are no outstanding and, to Company’s knowledge, no threatened disputes or disagreements
with respect to any agreements relating to any Intellectual Property Rights to which the Company is a party or by which the Company
is bound.


 


(iii) Know-How
Necessary for the Business. Except as set forth in the SEC Reports, the Intellectual Property Rights are all those necessary
for the operation of the Company’s and Subsidiaries’ businesses as currently conducted or as represented to the Purchaser
to be conducted. Each of the Company and each Subsidiary is the owner of all right, title, and interest in and to each of their
respective Intellectual Property Rights, free and clear of all Liens, and adverse claims, and has the right to use all of the Intellectual
Property Rights. To the Company’s knowledge, no employee of the Company or any Subsidiary has entered into any contract that
restricts or limits in any way the scope or type of work in which the employee may be engaged or requires the employee to transfer,
assign, or disclose information concerning his work to anyone other than the Company or a Subsidiary.


 




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(iv) Patents.
Except as set forth in the SEC Reports, the Company and each Subsidiary is the owner of all right, title and interest in and to
each of the Patents, free and clear of all Liens and adverse claims. All of the issued Patents are currently in compliance with
formal legal requirements (including payment of filing, examination, and maintenance fees and proofs of working or use), are valid
and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after the Closing
Date. No Patent has been or is now involved in any interference, reissue, reexamination, or opposition proceeding. Except as set
forth in the SEC Reports, to the Company’s knowledge: (1) there is no potentially interfering patent or patent application
of any third party, and (2) no Patent is infringed or has been challenged or threatened in any way. To the Company’s knowledge,
none of the products manufactured and sold, nor any process or know-how used, by the Company or any Subsidiary infringes or is
alleged to infringe any patent or other proprietary right of any other Person.


 


(v) Trademarks.
The Company and each Subsidiary is the owner of all right, title, and interest in and to each of the Marks, free and clear of all
Liens and adverse claims. All Marks that have been registered with the United States Patent and Trademark Office are currently
in compliance with all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability
and renewal applications), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due
within ninety days after the Closing Date. No Mark has been or is now involved in any opposition, invalidation, or cancellation
and, to the Company’s knowledge, no such action is threatened with respect to any of the Marks. To the Company’s knowledge:
(1) there is no potentially interfering trademark or trademark application of any third party, and (2) no Mark is infringed or
has been challenged or threatened in any way. To the Company’s knowledge, none of the Marks used by the Company and each
Subsidiary infringes or is alleged to infringe any trade name, trademark, or service mark of any third party.


 


(vi) Copyrights.
The Company and each Subsidiary is the owner of all right, title, and interest in and to each of the Copyrights, free and clear
of all Liens and adverse claims. All the Copyrights have been registered and are currently in compliance with formal requirements,
are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after
the Closing Date. To the Company’s knowledge, no Copyright is infringed or has been challenged or threatened in any way.
To the Company’s knowledge, none of the subject matter of any of the Copyrights infringes or is alleged to infringe any copyright
of any third party or is a derivative work based on the work of a third party. All works encompassed by the Copyrights have been
marked with the proper copyright notice.


 


(vii) Trade
Secrets. With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate, and sufficient
in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge or memory
of any individual. The Company has taken all reasonable precautions to protect the secrecy, confidentiality, and value of its Trade
Secrets. The Company and each Subsidiary has good title and an absolute (but not necessarily exclusive) right to use the Trade
Secrets. The Trade Secrets are not part of the public knowledge or literature, and, to the Company’s knowledge, have not
been used, divulged, or appropriated either for the benefit of any Person (other the Company and each Subsidiary) or to the detriment
of the Company and each Subsidiary. No Trade Secret is subject to any adverse claim or has been challenged or threatened in any
way.


 




    	 16



     


    

 


(p) Insurance.
The Company and each Subsidiary are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company and each Subsidiary are engaged, including,
but not limited to, directors and officers insurance coverage and all insurance required by Applicable Law. Neither the Company
nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant
increase in cost.


 


(q)
Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of
the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is
presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner,
in each case in excess of $100,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement
for expenses incurred on behalf of the Company or any Subsidiary, and (iii) other employee benefits, including stock option agreements
under the Stock Option Plan or any other plan of the Company except as disclosed on Schedule 3.1(g). 


 


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


 




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(s) Certain Fees.
Except as set forth on Schedule 3.1(s), no brokerage, finder’s fees, commissions or due diligence fees are or will
be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have
no obligation with respect to any such fees or with respect to any claims made by or on behalf of other Persons for fees of a type
contemplated in this Section 3.1(s) that may be due in connection with the transactions contemplated by the Transaction Documents.
The cash due diligence fee payable to the due diligence fee recipient identified on Schedule 3.1(s) shall be applied by
such recipient as payment of a Subscription Amount, pani passu with the other Purchasers and such recipient shall be deemed
a Purchaser with respect to such Subscription Amount entitled to all of the benefits and rights of a Purchaser with respect thereto,
including but not limited to the issuance of Warrants and registration rights.


 


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


 


(u) Registration Rights.
Except for the Prior Purchasers and Purchasers, no Person has any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any Subsidiary.


 


(v) Reporting Company/Shell
Company. The Company is a publicly-held company subject to reporting obligations pursuant to Sections 12(g), 13 and 15(d) of
the Exchange Act. Pursuant to the provisions of the Exchange Act, the Company has timely filed all reports and other materials
required to be filed by the Company thereunder with the SEC during the twelve months preceding the date of this Agreement. The
Company has no reason to believe that it will not in the year following the Closing continue to be in compliance with all listing
and reporting requirements applicable to the Company as of the Closing Date and thereafter. As of the date of this Agreement and
the Closing Date, the Company is not a “shell company” nor a former “shell company” (as defined in Rule
405 of the Securities Act) and has never been a “shell company”.


 


(w) Application of
Takeover Protections. The Company and the Board of Directors has taken all necessary action in order to render inapplicable
any control share acquisition, business combination (as defined in the DGCL), poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter
documents) or the laws of Delaware, including under Section 203(a)(1) of the DGCL that are or could become applicable to the Purchasers
as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents,
including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership
of the Securities.


 




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(x) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information. The Company understands
and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.
All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, when taken
together as a whole, is true and correct and does not contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do
not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading.
The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2 hereof.


 


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


 


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


 




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


 


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


 


(cc) Accountants and
Lawyers. The Company’s independent auditing firm is set forth on Schedule 3.1(cc) of the Disclosure Schedules.
To the knowledge and belief of the Company, such auditing firm: (i) is a registered public accounting firm as required by the Exchange
Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report
for the fiscal year ending December 31, 2019. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the auditors, accountants and lawyers formerly or presently employed by the Company
and the Company is current with respect to any fees owed to its auditors, accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the Transaction Documents.


 


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


 


(ee) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Section 4.16 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked
by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the
Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified
term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short
Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties
in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently have a “short”
position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y) one
or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, including,
without limitation, during the periods that the value of the Underlying Shares deliverable with respect to Securities are being
determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders equity interests in the
Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned
hedging activities do not constitute a breach of any of the Transaction Documents. The Company acknowledges that anything to the
contrary in the Transaction Documents notwithstanding, Purchaser may sell long any Underlying Shares it anticipates receiving after
conversion of any part of a Note or exercise of a Warrant.


 




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


 


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


 


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


 


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


 


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


 


(kk) No General Solicitation.
Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities by any form of general
solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act.


 




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(ll) Indebtedness
and Seniority. As of the date hereof, all Indebtedness and Liens of the Company and the principal terms thereof are set forth
in the SEC Reports. Except as set forth on Schedule 3.1(ll), as of the Closing Date, no Indebtedness or other equity of
the Company is or will be pani passu or senior to the Notes in right of payment, whether with respect to interest or upon
liquidation or dissolution, or otherwise, other than indebtedness secured by purchase money security interests (which is senior
only as to underlying assets covered thereby) and capital lease obligations (which is senior only as to the property covered thereby).


 


(mm) Listing and Maintenance
Requirements. The Common Stock is listed on the OTCQB under the symbol CVLB. There are no proceedings pending or, to the Company’s
knowledge, threatened against the Company relating to the continued listing of the Company Common Stock on the OTCQB and the Company
has not received any currently pending notice of the delisting of the Common Stock from OTCQB.


 


(nn) FDA. As
to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company’s
knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge,
complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries
has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests
the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging
of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of,
requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials
relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of
its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to
enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any
violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the
aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company have been and are being
conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not
been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed
to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing
any product being developed or proposed to be developed by the Company.


 


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


 




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(pp) Regulatory Matters.
The Company and its Subsidiaries have complied in all material respects with all statutes and regulations related to the research,
manufacture and sale of its products to the extent applicable to the Company’s and its Subsidiaries’ activities. Items
manufactured or under investigation by the Company and its Subsidiaries comply with all applicable manufacturing practices regulations
and other requirements established by government regulators in the jurisdictions in which the Company or its Subsidiaries manufacture
or sell their products. Except as disclosed in the SEC Reports, the Company is not and its Subsidiaries are not the subject of
any investigation by any competent authority with respect to the development, testing, manufacturing and distribution of their
products, nor has any investigation, prosecution, or other enforcement action been threatened by any regulatory agency. Except
as disclosed in the SEC Reports, neither the Company nor any of its Subsidiaries has received from any regulatory agency any letter
or other document asserting that the Company or any Subsidiary has violated any statute or regulation enforced by that agency with
respect to the development, testing, manufacturing and distribution of their products. To the Company’s knowledge, research
conducted by or for the Company and its Subsidiaries has complied in all material respects with all applicable legal requirements.
To the Company’s knowledge, research involving human subjects conducted by or for the Company and its Subsidiaries has been
conducted in compliance in all respects with all applicable statutes and regulations governing the protection of human subjects
and not involved any investigator who has been disqualified as a clinical investigator by any regulatory agency or has been found
by any agency with jurisdiction to have engaged in scientific misconduct.


 


(qq) Other Covered
Persons. Except as set forth on Schedule 3.1(s) or to attorneys for legal services, the Company is not aware of any
person that has been or will be paid (directly or indirectly) remuneration in connection with the sale of any Regulation D Securities
pursuant to this Agreement.


 


(rr) No Outstanding
Variable Priced Equity Linked Instruments. As of the Closing Date and for so long as Notes or Warrants are outstanding, the
Company will not have outstanding nor issuable any Variable Priced Equity Linked Instruments, nor any debt or equity with anti-dilution,
ratchet or reset rights except for the Securities, Prior Notes and Prior Warrants.


 


(ss) Survival. The foregoing representations
and warranties shall survive the Closing.


 


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


 


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


 




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


 


(c) Purchaser Status.
At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises
any Warrants or converts any Notes it will be either: (i) an accredited investor as defined in Rule 501(a)(1), (a)(2), (a)(3),
(a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under
the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act (“Accredited
Investor”). Such Purchaser has the authority and is duly and legally qualified to purchase and own the Securities. Such
Purchaser is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof. Such Purchaser
has provided the information in the Accredited Investor Questionnaire attached hereto as Exhibit E (the “Investor
Questionnaire”). The information set forth on the signature pages hereto and the Investor Questionnaire regarding such
Purchaser is true and complete in all respects as of the date of this Agreement. Except as disclosed in the Investor Questionnaire,
such Purchaser has had no position, office or other material relationship within the past three years with the Company or Persons
(as defined below) known to such Purchaser to be affiliates of the Company, and is not a member of the Financial Industry Regulatory
Authority or an “associated person” (as such term is defined under the FINRA Membership and Registration Rules Section
1011).


 


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


 


(e) Information on
Company. Such Purchaser has been furnished with or has had access to the SEC Reports. Such Purchaser is not deemed to have
any knowledge of any information not included in the SEC Reports unless such information is delivered in the manner described in
the next sentence. In addition, such Purchaser may have received in writing from the Company such other information concerning
its operations, financial condition and other matters as such Purchaser has requested, identified thereon as OTHER WRITTEN INFORMATION
(such other information is collectively, the “Other Written Information”), and considered all factors such Purchaser
deems material in deciding on the advisability of investing in the Securities. Such Purchaser was afforded (i) the opportunity
to ask such questions as such Purchaser deemed necessary of, and to receive answers from, representatives of the Company concerning
the merits and risks of acquiring the Securities; (ii) the right of access to information about the Company and its financial condition,
results of operations, business, properties, management and prospects sufficient to enable such Purchaser to evaluate the Securities;
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 acquiring the Securities.


 




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(f) Compliance
with Securities Act; Reliance on Exemptions. Such Purchaser understands and agrees that the Securities have not been registered
under the Securities Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require
registration under the Securities Act, and that such Securities must be held indefinitely unless a subsequent disposition is registered
under the Securities Act or any applicable state securities laws or is exempt from such registration. Such Purchaser understands
and agrees that the Securities are being offered and sold to such Purchaser in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and regulations and that the Company is relying in part upon the
truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility
of such Purchaser to acquire the Securities.


 


(g) Communication
of Offer. Such Purchaser is not purchasing the Securities as a result of any “general solicitation” or “general
advertising,” as such terms are defined in Regulation D, which includes, but is not limited to, any advertisement, article,
notice or other communication regarding the Securities published in any newspaper, magazine or similar media or on the internet
or broadcast over television, radio or the internet or presented at any seminar or any other general solicitation or general advertisement.


 


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


 


(i) No Conflicts.
The execution, delivery and performance of this Agreement and performance under the other Transaction Documents and the consummation
by such Purchaser of the transactions contemplated hereby and thereby or relating hereto or thereto do not and will not (i) result
in a violation of such Purchaser’s charter documents, bylaws or other organizational documents, if applicable, (ii) conflict
with nor constitute a default (or an event which with notice or lapse of time or both would become a default) under any agreement
to which such Purchaser is a party, nor (iii) result in a violation of any law, rule, or regulation, or any order, judgment or
decree of any court or governmental agency applicable to such Purchaser or its properties (except for such conflicts, defaults
and violations as would not, individually or in the aggregate, have a material adverse effect on such Purchaser). Such Purchaser
is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations under this Agreement or perform under the other Transaction
Documents nor to purchase the Securities in accordance with the terms hereof, provided that for purposes of the representation
made in this sentence, such Purchaser is assuming and relying upon the accuracy of the relevant representations and agreements
of the Company herein.


 




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(j) Certain Transactions
and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not directly or indirectly,
nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any purchases or sales, including
Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a
written term sheet from the Company or any other Person representing the Company setting forth the material terms of the transactions
contemplated hereby and ending immediately prior to the execution hereof.


 


(k) Limitation of
Representations. Anything to the contrary herein notwithstanding the Purchaser makes no representations or warranties with
regard to any laws, rules or regulation except with respect to the United States and its subdivisions and the jurisdiction of its
formation.


 


(l) Prior Offering.
To the extent the consent or approval from any Purchaser is required from such Purchaser pursuant to the Prior Offering, in order
for the Company to enter into and fulfill its obligations under the Transaction Documents, such consent and approval is hereby
granted by such Purchaser in its capacity as a purchaser in the Prior Offering, subject to the Company fulfilling all of its obligations
pursuant to the Prior Offering.


 


(m) Survival.
The foregoing representations and warranties shall survive the Closing.


 


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


 


ARTICLE IV.


OTHER AGREEMENTS OF THE PARTIES


 


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


 


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


 


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


 




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(c) Pledge. The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or
all of the Securities to a financial institution that is an Accredited Investor and who agrees to be bound by the provisions of
this Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledge or secure Securities to
the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion
of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be
required of such pledge. At the pledging Purchaser’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 of the Securities, including,
if the Securities are subject to registration pursuant to Section 4.26 of this Agreement, the preparation and filing of any required
prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately
amend the list of selling stockholders thereunder.


 


(d) Legend Removal.
Certificates evidencing the Underlying Shares shall not contain any legend (“Unlegended Shares”) (including
the legend set forth in Section 4.1(b) hereof): (i) while any registration statement covering the resale of such security is effective
under the Securities Act, (ii) following any sale of such Underlying Shares pursuant to Rule 144, (iii) if such Underlying Shares
are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information
required under Rule 144 as to such Underlying Shares and without volume or manner-of-sale restrictions or (iv) if such legend
is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued
by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after
the Effective Date or other counsel reasonably acceptable to Purchaser to effect the removal of the legend hereunder. If all or
any Notes are converted or any portion of a Warrant is exercised at a time when there is an effective registration statement to
cover the resale of the Underlying Shares, or if such Underlying Shares may be sold under Rule 144 or if such legend is not otherwise
required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by
the staff of the Commission) then such Underlying Shares shall be issued free of all legends. The Company agrees that following
such time as such legend is no longer required under this Section 4.1(c), it will, no later than two (2) Trading Days following
the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable,
issued with a restrictive legend (such second (2nd) Trading Day, the “Legend Removal Date”), deliver
or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other
legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions
on transfer set forth in this Section 4. Certificates for Underlying Shares subject to legend removal hereunder shall be transmitted
by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust
Company System as directed by such Purchaser.


 




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(e) Legend Removal
Default. In addition to such Purchaser’s other available remedies, provided the conditions for legend removal set forth
in Section 4.1(c) exist, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, for
each $1,000 of Underlying Shares (based on the higher of the actual purchase price or VWAP of the Common Stock on the date such
Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c),
$10 per Trading Day for each Trading Day commencing the first Trading Day after the Legend Removal Date (increasing to $20 per
Trading Day after such fifth Trading Day) until such certificate is delivered without a legend. Nothing herein shall limit such
Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities
as required by the Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief.


 


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


 


(g) Injunction.
In the event a Purchaser shall request delivery of Unlegended Shares as described in this Section 4.1 and the Company is required
to deliver such Unlegended Shares, the Company may not refuse to deliver Unlegended Shares based on any claim that such Purchaser
or anyone associated or affiliated with such Purchaser has not complied with Purchaser’s obligations under the Transaction
Documents, or for any other reason, unless, an injunction or temporary restraining order from a court, on notice, restraining and
or enjoining delivery of such Unlegended Shares shall have been sought and obtained by the Company and the Company has posted a
surety bond for the benefit of such Purchaser in the amount of the greater of (i) 120% of the amount of the aggregate purchase
price of the Underlying Shares to be subject to the injunction or temporary restraining order, or (ii) the VWAP of the Common Stock
on the trading day before the issue date of the injunction multiplied by the number of Unlegended Shares to be subject to the injunction,
which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall
be payable to such Purchaser to the extent Purchaser obtains judgment in Purchaser’s favor.


 


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


 




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(i) Plan of Distribution.
Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any
Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold
in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from
certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this
understanding.


 


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


 


4.3 Furnishing of
Information; Public Information.


 


(a) Until the earliest
of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants to file all periodic
reports with the Commission pursuant to the Exchange Act and maintain the registration of the Common Stock under Section 12(b)
or 12(g) of the Exchange Act after such time as the Company initially becomes subject to such requirements and to timely file (or
obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company
after the date hereof pursuant to the Exchange Act and timely file all reports that would be required to be filed by an issuer
subject to Section 12(b) or 12(g) of the Exchange Act even if the Company is not then subject to the reporting requirements of
the Exchange Act.


 


(b) At any time commencing
on the Closing Date and ending at such time that all of the Securities may be sold without the requirement for the Company to be
in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company shall fail
for any reason to satisfy the current public information requirement under Rule 144(c) (a “Public Information Failure”)
then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, by reason of any such delay in or impairment of its ability to sell the Securities, an
amount in cash equal to 2.0% of the aggregate principal amount of Notes and accrued interest thereon, and aggregate Exercise Price
of Warrant Shares held by such Purchaser on the day of a Public Information Failure and on every thirtieth (30th) day (pro-rated
for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured
and (b) such time that such public information is no longer required for the Purchasers to transfer the Underlying Shares pursuant
to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public
Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of
the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after
the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public
Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5%
per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual
damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief.


 




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


 


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


 


4.6 Securities
Laws Disclosure; Publicity. The Company shall on or before the third Trading Day following the Closing Date, file a Current
Report on Form 8-K including the Transaction Documents as exhibits thereto with the Commission (“Form 8-K”).
A form of the Form 8-K is annexed hereto as Exhibit F. Such Exhibit F will be identical to the Form 8-K which will
be filed with the Commission except for the omission of signatures thereto by the Company. From and after the filing of the Form
8-K, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered
to any of the Purchasers by the Company or any Subsidiary, or any of their respective officers, directors, employees or agents
in connection with the transactions contemplated by the Transaction Documents. The Company and each Purchaser shall consult with
each other in issuing any press releases with respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any press release nor otherwise make any such public statement without the prior consent of the Company,
with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press
release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser
in any filing with the Commission or any regulatory agency or Trading Market unless the name of such Purchaser is already included
in the body of the Transaction Documents, without the prior written consent of such Purchaser, except: (a) as required by federal
securities law in connection with the filing of final Transaction Documents with the Commission and any registration statement
pursuant to Section 4.26 of this Agreement, and (b) to the extent such disclosure is required by law or Trading Market regulations,
in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b). The
Company may file a Form 10-Q in lieu of the Form 8-K provided such filing contains the content required to be included in the
Form 8-K and the Form 10-Q is filed not later than the first Trading Day after the Closing Date.


 


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


 




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


 


4.9 Use of Proceeds.
The Company shall use the net proceeds from the sale of the Securities hereunder substantially for the purposes set forth on Schedule
4.9 hereto and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt except as disclosed
on Schedule 4.9 (other than payment of trade payables in the ordinary course of the Company’s business and consistent
with prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding
litigation or (d) in violation of FCPA or OFAC regulations.


 


4.10 Indemnification
of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against Purchaser
Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate
of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action
is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents
or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser
Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful
misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right
to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue
between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for
the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party
under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability
is attributable to any Purchaser Party’s breach of its material representations, warranties or covenants under the Transaction
Documents. The indemnification required by this Section 4.10 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities
the Company may be subject to pursuant to law.


 




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4.11 Reservation and Listing of Securities.


 


(a) As of the date hereof,
the Company, ignoring any conversion or exercise, has reserved for each Purchaser and the Company shall continue to reserve and
keep available at all times, the “Required Minimum”, free of preemptive rights. If, on any date, the number of authorized
but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum on such date (an “Authorized
Share Failure”), then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate
of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum plus
such other amount as may be required for the Company’s other purposes, and reserve the Required Minimum on behalf of the
Purchaser, as soon as possible and in any event not later than the 60th day after such date. Without limiting the generality
of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event
later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company
shall provide each stockholder with a proxy statement and shall use its commercially reasonable efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders
that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is
able to obtain the written consent of a majority of the shares of its issued and outstanding Common Stock to approve the increase
in the number of authorized shares of Common Stock without soliciting its stockholders, the Company may satisfy this obligation
by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C.


 


(b) The Company shall
prior to the Closing: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading Market
an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on
the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or
quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing or quotation
and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date
on such Trading Market or another Trading Market. The Company will take all action necessary to continue the listing or quotation
and trading of its Common Stock on a Trading Market until the later of (i) at least five (5) years after the Closing Date, and
(ii) for so long as the Notes or Warrants are outstanding, and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading Market. In the event the aforedescribed listing is not continuously
maintained for five (5) years after the Closing Date and for so long as Notes or Warrants are outstanding (a “Listing
Default”), then in addition to any other rights the Purchasers may have hereunder or under Applicable Law, on the first
day of a Listing Default and on each monthly anniversary of each such Listing Default date (if the applicable Listing Default shall
not have been cured by such date) until the applicable Listing Default is cured, the Company shall pay to each Purchaser an amount
in cash, as partial liquidated damages and not as a penalty, equal to 2% of the aggregate outstanding Note principal and accrued
interest, conversion price of Conversion Shares and purchase price of Warrant Shares held by such Purchaser or which may be acquired
upon exercise of Warrants on the day of a Listing Default and on every thirtieth day (pro-rated for periods less than thirty days)
thereafter until the date such Listing Default is cured. If the Company fails to pay any liquidated damages pursuant to this Section
in a timely manner, the Company will pay interest thereon at a rate of 1.5% per month (pro-rated for partial months) to the Purchaser.


 




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4.12 Form D; Blue
Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to
provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at a Closing
under Applicable Law, including “Blue Sky” laws of the states of the United States, and shall provide evidence of such
actions promptly upon request of any Purchaser.


 


4.13 Subsequent
Equity Sales. From the date hereof until the later of (i) such time as either Notes and Warrants are no longer outstanding,
or (ii) one year after the Effective Date, the Company will not, without the consent of a Majority in Interest, have outstanding
nor enter into any Equity Line of Credit or similar agreement, issue or agree to issue floating or Variable Priced Equity Linked
Instruments nor issue or agree to issue any of the foregoing or equity with price reset rights (subject to adjustment for stock
splits, distributions, dividends, recapitalizations and the like) (collectively, a “Variable Rate Transaction”).
For purposes hereof, “Equity Line of Credit” shall include any transaction involving a written agreement between
the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor
or underwriter over an agreed period of time and at an agreed price or price formula, and “Variable Priced Equity Linked
Instruments” shall include: (A) any debt or equity securities which are convertible into, exercisable or exchangeable
for, or carry the right to receive additional shares of Common Stock or Common Stock Equivalents or any of the foregoing at a price
that can be reduced either (1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with
the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security, or
(2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date at any time after the
initial issuance of such debt or equity security due to a change in the market price of the Company’s Common Stock since
date of initial issuance, or upon the issuance of any debt, equity or Common Stock Equivalent, and (B) any amortizing convertible
security which amortizes prior to its maturity date, where the Company is required or has the option to (or any investor in such
transaction has the option to require the Company to) make such amortization payments in shares of Common Stock which are valued
at a price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial
issuance of such debt or equity security (whether or not such payments in stock are subject to certain equity conditions). For
purposes of determining the total consideration for a convertible instrument (including a right to purchase equity of the Company)
issued, subject to an original issue or similar discount or which principal amount is directly or indirectly increased after issuance,
the consideration will be deemed to be the actual net cash amount received by the Company in consideration of the original issuance
of such convertible instrument. For so long as the Notes or Warrants are outstanding, the Company will not, without the consent
of a Majority in Interest, issue any Common Stock or Common Stock Equivalents to officers, directors, and employees of the Company
unless such issuance is an Exempt Issuance or in the amounts and on the terms set forth on Schedule 4.13. For so long as
any Notes and Warrants are outstanding, the Company will not issue or amend the terms of any securities or Common Stock Equivalents
or of any agreement outstanding or in effect as of the date of this Agreement pursuant to which same were or may be acquired without
the consent of a Majority in Interest, if the result of such issuance or amendment would be at an effective price per share of
Common Stock less than the higher of the Conversion Price or Exercise Price in effect at the time of such issuance or amendment.
The restrictions and limitations in this Section 4.13 are in addition to and shall apply whether or not a Purchaser exercises its
rights pursuant to Section 4.17 and Section 4.23.


 




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


 


4.15 Capital Changes.
Until the one (1) year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock split or reclassification
of the Common Stock without ten (10) days prior written notice to the Purchasers. Within one hundred and twenty (120) days after
the initial Closing Date, the Company will increase the authorized shares of its Common Stock from 100,000,000 Shares to 150,000,000
Shares and undertakes to complete a 1 for 5 reverse split of its Common Stock. In no event will the Company reduce the par value
of the Common Stock to an amount less than the lesser of (i) the Conversion Price, or (ii) Exercise Price, then in effect.


 


4.16 Certain Transactions
and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it, nor any
Affiliate acting on such Purchaser’s behalf or pursuant to any understanding with such Purchaser will execute any purchases
or sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of this
Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to
a press release or Form 8-K as described in Section 4.6. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to a press
release or Form 8-K as described in Section 4.6, such Purchaser will maintain the confidentiality of the existence and terms of
this transaction and the information included in the Transaction Documents and the Disclosure Schedules. Notwithstanding the foregoing,
and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i)
no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities
of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to a press
release or Form 8-K as described in Section 4.6, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions
in any securities of the Company in accordance with Applicable Law from and after the time that the transactions contemplated by
this Agreement are first publicly announced pursuant to a press release or Form 8-K, and (iii) no Purchaser shall have any duty
of confidentiality to the Company or its Subsidiaries after the filing of the Form 8-K. Notwithstanding the foregoing, in the case
of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such
Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to
the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by
this Agreement.


 


4.17 Participation in Future Financing.


 


(a) Until the later of
(i) no Note is outstanding and (ii) one (1) year after the Closing Date upon any proposed issuance by the Company or any of its
Subsidiaries of Common Stock, Common Stock Equivalents for cash consideration, Indebtedness or a combination thereof, other than
(i) a rights offering to all holders of Common Stock (which may include extending such rights offering to holders of Notes), or
(ii) an Exempt Issuance (each a “Subsequent Financing”), the Purchasers shall have the right to participate
in up to an amount of the Subsequent Financing equal to one hundred percent (100%) of the Subsequent Financing (the “Participation
Maximum”) pro rata to each other in proportion to their Subscription Amounts on the same terms, conditions and price
provided for in the Subsequent Financing, unless the Subsequent Financing is an underwritten public offering, in which case the
Company shall notify each Purchaser of such public offering when it is lawful for the Company to do so, but no Purchaser shall
be entitled to purchase any particular amount of such public offering without the approval of the lead underwriter of such underwritten
public offering.


 




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(b) At least ten (10)
Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written notice of
its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser if
it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The
requesting Purchaser shall be deemed to have acknowledged that the Subsequent Financing Notice may contain material non-public
information. 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 Purchaser 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 tenth (10th) Trading Day after all of the Purchasers have received the Pre-Notice that the Purchaser is
willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation, and representing and warranting
that such Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing
Notice. If the Company receives no such notice from a Purchaser as of such tenth (10th) Trading Day, such Purchaser
shall be deemed to have notified the Company that it does not elect to participate.


 


(d) If by 5:30 p.m.
(New York City time) on the tenth (10th) Trading Day after all of the Purchasers have received the Pre-Notice, notifications
by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to participate)
is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may affect the remaining portion
of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice and the Purchasers
shall simultaneously affect their portion of such Subsequent Financing as set forth in their notifications to the Company consistent
with the terms set forth in the Subsequent Financing Notice.


 


(e) If by 5:30 p.m. (New
York City time) on the fifteenth (15th) Trading Day after all of the Purchasers have received the Pre-Notice, the Company
receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation
Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation Maximum.
“Pro Rata Portion” means the ratio of (x) the principal amount of Notes purchased hereunder by a Purchaser participating
under this Section 4.17 and (y) the sum of the aggregate principal amounts of Notes purchased hereunder by all Purchasers participating
under this Section 4.17.


 


(f) The Company must
provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of participation
set forth above in this Section 4.18, 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 sixty (60) Trading Days after the date of the
initial Subsequent Financing Notice.


 




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(g) The Company and each
Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents related to the
Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required to agree to any restrictions
on trading as to any of the Securities purchased hereunder (for avoidance of doubt, the securities purchased in the Subsequent
Financing shall not be considered securities purchased hereunder) or be required to consent to any amendment to or termination
of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of
such Purchaser.


 


(h) Notwithstanding anything
to the contrary in this Section 4.17 and unless otherwise agreed to by such Purchaser, the Company shall either confirm in writing
to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its
intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser will not
be in possession of any material, non-public information, by the seventeenth (17th) Trading Day following delivery of
the Subsequent Financing Notice. If by such seventeenth (17th) Trading Day, no public disclosure regarding a transaction
with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received
by such Purchaser, such transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession
of any material, non-public information with respect to the Company or any of its Subsidiaries.


 


4.18 Purchaser’s
Exercise Limitations. The Company shall not effect exercise of the rights granted in Sections 4.17 and 4.23 of this Agreement,
and a Purchaser shall not have the right to exercise any portion of such rights granted in Sections 4.17 and 4.23 only to the extent
that after giving effect to such exercise, the Purchaser, would beneficially own in excess of the Beneficial Ownership Limitation
(as defined in the Note), applied in the manner set forth in the Note. In such event the right by Purchaser to benefit from such
rights or receive shares in excess of the Beneficial Ownership Limitation shall be held in abeyance until such times as such excess
shares shall not exceed the Beneficial Ownership Limitation, provided the Purchaser complies with the Purchaser’s other obligations
in connection with the exercise by Purchaser of its rights pursuant to Sections 4.17 and 4.23.


 


4.19 Maintenance
of Property/Insurance. The Company shall and shall cause each Subsidiary to keep all of its property, which is necessary or
useful to the conduct of its business, in good working order and condition, ordinary wear and tear excepted and insured by insurers
of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary for the businesses
of the Company and Subsidiary. From and after the Closing Date and for so long as any Securities are held by a Purchaser, the Company
will maintain directors and officers insurance coverage at least equal to the aggregate principal amount of Notes issued pursuant
to this Agreement.


 


4.20 Preservation
of Corporate Existence. The Company shall preserve and maintain its corporate existence, rights, privileges and franchises
in the jurisdiction of its incorporation, and qualify and remain qualified, as a foreign entity in each jurisdiction in which such
qualification is necessary in view of its business or operations and where the failure to qualify or remain qualified might reasonably
have a Material Adverse Effect upon the financial condition, business or operations of the Company taken as a whole.


 


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


 




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


 


4.23 Most Favored
Nation Provision. From the date hereof and for so long as a Purchaser holds any Securities, in the event that the Company issues
or sells any Common Stock or Common Stock Equivalents, if a Purchaser then holding outstanding Securities reasonably believes that
any of the terms and conditions appurtenant to such issuance or sale are more favorable to such investors than are the terms and
conditions granted to the Purchasers hereunder, upon notice to the Company by such Purchaser within five (5) Trading Days after
disclosure of such issuance or sale, the Company shall promptly amend the terms of this transaction as to such Purchaser subject
to such Purchaser’s approval, only so as to give such Purchaser the benefit of such more favorable terms or conditions. The
Purchaser shall have the benefit of such more favorable terms regardless of, if and when the relevant Transaction Documents are
so amended. This Section 4.23 shall not apply with respect to an Exempt Issuance. The Company shall provide each Purchaser with
notice of any such issuance or sale not later than ten (10) Trading Days before such issuance or sale.


 


4.24 Indebtedness.
For so long as any Note is outstanding, the Company will not incur any Indebtedness other than Permitted Indebtedness, without
the consent of the Majority in Interest.


 


4.25 Notice of Disqualification
Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any Disqualification Event relating
to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating
to any Issuer Covered Person not otherwise disclosed herein or in the SEC Reports.


 




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4.26 Piggyback Registration
Rights. If at any time after the Closing Date there is not an effective registration statement covering all of the Underlying
Shares and the Company determines to prepare and file with the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act of any of its equity securities, but excluding Forms S-4 or S-8
and similar forms which do not permit such registration, then the Company shall send to each holder of any of the Securities written
notice of such determination and, if within ten (10) business days after receipt of such notice, any such holder shall so request
in writing, the Company shall include in such registration statement all or any part of the Underlying Shares such holder requests
to be registered and which inclusion of such Underlying Shares will be subject to customary underwriter cutbacks applicable to
all holders of registration rights and minimum cutbacks in accordance with guidance provided by the Commission (including, but
not limited to, Rule 415). The obligations of the Company under this Section may be waived by any holder of any of the Securities
entitled to registration rights under this Section 4.22. The holders whose Underlying Shares are included or required to be included
in such registration statement are granted the same rights, benefits, liquidated or other damages and indemnification granted to
other holders of securities included in such registration statement. In no event shall the liability of any holder of Securities
or permitted successor in connection with any Underlying Shares included in any such registration statement be greater in amount
than the dollar amount of the net proceeds actually received by such holder upon the sale of the Underlying Shares sold pursuant
to such registration or such lesser amount in proportion to all other holders of securities included in such registration statement.
All expenses incurred by the Company in complying with Section 4.22, including, without limitation, all registration and filing
fees, printing expenses (if required), fees and disbursements of counsel and independent public accountants for the Company, fees
and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or “blue sky”
laws, fees of the FINRA, transfer taxes, and fees of transfer agents and registrars, are called “Registration Expenses.”
All underwriting discounts and selling commissions applicable to the sale of Registrable Securities and legal expenses of such
holders are called “Selling Expenses.” The Company will pay all Registration Expenses in connection with the
registration statement under Section 4.22. Selling Expenses in connection with each registration statement under Section 4.22 shall
be borne by the holder and will be apportioned among such holders in proportion to the number of shares included therein for a
holder relative to all the securities included therein for all selling holders, or as all holders may agree. It shall be a condition
precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Underlying
Shares of a particular holder that such holder shall furnish to the Company in writing such information and representation letters,
including a completed form of a securityholder questionnaire, with respect to itself and the proposed distribution by it as the
Company may reasonably request to assure compliance with federal and applicable state securities laws.


 


4.27 Duration of
Undertakings. Unless otherwise stated in this Article IV, all of the Company’s undertakings, obligations and responsibilities
set forth in Article IV of this Agreement shall remain in effect for at least as long as any Securities remain outstanding.


 


ARTICLE V.


MISCELLANEOUS


 


5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the final
Closing has not been consummated on or before August 15, 2019; provided, however, that such termination will not
affect the right of any party to sue for any breach by any other party (or parties).


 


5.2 Fees and Expenses.
At the Closing, the Company has agreed to pay G&M for the legal fees in connection with G&M’s representation of Alpha
Capital Anstalt (and no other Purchasers except pursuant to the Escrow Agreement) in the amount of $15,000 (of which $5,000 has
been paid). Except as expressly set forth in the Transaction Documents and on Schedule 3.1(s), each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall reimburse Purchasers
for all expenses incurred in connection with UCC, lien, judgment, tax and similar searches conducted in connection with the Offering.
The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any
instruction letter delivered by the Company and any conversion or exercise notice delivered by a Purchaser), stamp taxes and other
taxes and duties levied in connection with the delivery of any Securities to the Purchasers. The Company shall be responsible for
all wire fees incurred by the Escrow Agent for the receipt and disbursement of Subscription Amounts. Such fees may be disbursed
by the Escrow Agent from any funds deliverable to or for the benefit of the Company. All of the Purchasers acknowledge that they
have been advised to seek the advice of their own attorneys.


 




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5.3 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 thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.


 


5.4 Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine,
at the address or number designated below (if delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Company, to: Conversion Labs, Inc., 800 Third Avenue, Suite 2800, New York, NY 10022,
Attn: Justin Schreiber, CEO, email: justin@conversionlabs.com, with a copy by fax only to: Lucosky Brookman, 101 Wood Avenue South,
Woodbridge, NJ 08830, Attn: Lawrence Metelitsa, Esq., fax: (732) 395-4401, and (ii) if to the Purchasers, to: the addresses and
fax numbers indicated on the signature pages hereto, with an additional copy by fax only to (which shall not constitute notice):
Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, fax: (212) 697-3575.


 


5.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Purchasers holding at least a majority in interest of the Securities then outstanding
(the “Majority in Interest”), or, in the case of a waiver, by the party against whom enforcement of any such
waived provision is sought. Whenever the term “consent of the Purchasers” or a similar term is employed herein, it
shall mean the consent of a Majority in Interest. No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder
in any manner impair the exercise of any such right.


 


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


 


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


 




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5.8 No Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth
in Section 4.10.


 


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


 


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


 


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


 


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


 




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5.14 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 (in the case of mutilation), or
in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.


 


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


 


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


 


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


 




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


 


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


 


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


 


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


 


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


 




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5.23 Equitable Adjustment.
Trading volume amounts, price/volume amounts, the amount of Warrants, the amount of shares of Common Stock identified in this Agreement,
Conversion Price, Exercise Price, Underlying Shares and similar figures in the Transaction Documents shall be equitably adjusted
(but without duplication) to offset the effect of stock splits, similar events and as otherwise described in this Agreement, Note
and Warrants.


 


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


 


(Signature Pages Follow)


 




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


 


	CONVERSION
    LABS, INC.	Address for Notice:
	 	 

        800 Third Avenue, Suite
        2800

        New York, NY 10022

        Email:
        justin@jlsventures.com



 


	By:	/s/ Justin Schreiber	 
	 	Name: Justin Schreiber	 
	 	Title: CEO	 


 


With a copy to (which shall not constitute notice):


 


Lucosky Brookman


101 Wood Avenue South


Woodbridge, NJ 08830


Attn: Lawrence Metelitsa, Esq.


Fax: (732) 395-4401


 


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