Exhibit 10.1


 


SUBSCRIPTION
AGREEMENT


 


This Subscription
Agreement (this “Agreement”) is being delivered to the purchaser identified on the signature page to this Agreement
(the “Subscriber”) in connection with its investment in the securities of Drone Aviation Holding Corp., a Nevada
corporation (the “Company”). The Company is conducting a private placement (the “Offering”)
of shares (the “Shares”) of the Company’s Series G Convertible Preferred Stock, par value $0.0001 per
share, which are convertible into shares of common stock, par value $0.0001 per share (the “Common Stock”)
(the “Conversion Shares”), with such rights and designations as set forth in the form of Certificate of Designation
of Preferences, Rights and Limitations of Series G Convertible Preferred Stock, attached hereto as Exhibit A, (the “Series
G Certificate of Designation”) for a purchase price of $0.25 per Share (the “Purchase Price”). For
purposes of this Agreement, the term “Securities” shall refer to the Shares and the Conversion Shares.


 


IMPORTANT INVESTOR NOTICES


 


NO OFFERING LITERATURE OR ADVERTISEMENT
IN ANY FORM MAY BE RELIED UPON IN THE OFFERING OF THESE SECURITIES EXCEPT FOR THIS SUBSCRIPTION AGREEMENT AND ANY SUPPLEMENTS
HERETO, AND NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATIONS EXCEPT THOSE CONTAINED HEREIN.


 


THIS AGREEMENT IS CONFIDENTIAL AND
THE CONTENTS HEREOF MAY NOT BE REPRODUCED, DISTRIBUTED OR DIVULGED BY OR TO ANY PERSONS OTHER THAN THE RECIPIENT OR ITS REPRESENTATIVE,
ACCOUNTANT OR LEGAL COUNSEL, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY. EACH PERSON WHO ACCEPTS DELIVERY OF THIS AGREEMENT,
ACKNOWLEDGES AND AGREES TO THE FOREGOING RESTRICTIONS.


 


THIS AGREEMENT DOES NOT PURPORT TO
BE ALL-INCLUSIVE OR TO CONTAIN ALL OF THE INFORMATION THAT YOU MAY DESIRE IN EVALUATING THE COMPANY, OR AN INVESTMENT IN THE OFFERING.
THIS AGREEMENT DOES NOT CONTAIN ALL OF THE INFORMATION THAT WOULD NORMALLY APPEAR IN A PROSPECTUS FOR AN OFFERING REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). YOU MUST CONDUCT AND RELY ON YOUR OWN EVALUATION OF
THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED, IN DECIDING WHETHER TO INVEST IN THE OFFERING.


 


THIS AGREEMENT DOES NOT CONSTITUTE
AN OFFER OR SOLICITATION OF AN OFFER TO ANY PERSON OR IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION IS UNLAWFUL OR NOT
AUTHORIZED. EACH PERSON WHO ACCEPTS DELIVERY OF THIS AGREEMENT AGREES TO RETURN IT AND ALL RELATED DOCUMENTS IF SUCH PERSON DOES
NOT PURCHASE ANY OF THE SECURITIES DESCRIBED HEREIN.


 


NEITHER THE DELIVERY OF THIS AGREEMENT
AT ANY TIME NOR ANY SALE OF SECURITIES HEREUNDER SHALL IMPLY THAT INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO ITS DATE. THE COMPANY WILL EXTEND TO EACH PROSPECTIVE SUBSCRIBER (AND TO ITS REPRESENTATIVE, ACCOUNTANT OR LEGAL COUNSEL, IF
ANY) THE OPPORTUNITY, PRIOR TO ITS PURCHASE OF SHARES TO ASK QUESTIONS OF AND RECEIVE ANSWERS FROM THE COMPANY CONCERNING THE
OFFERING AND TO OBTAIN ADDITIONAL INFORMATION, TO THE EXTENT THE COMPANY POSSESSES THE SAME OR CAN ACQUIRE IT WITHOUT UNREASONABLE
EFFORT OR EXPENSE, IN ORDER TO VERIFY THE ACCURACY OF THE INFORMATION SET FORTH HEREIN. ALL SUCH ADDITIONAL INFORMATION SHALL
ONLY BE PROVIDED IN WRITING AND IDENTIFIED AS SUCH BY THE COMPANY THROUGH ITS DULY AUTHORIZED OFFICERS AND/OR DIRECTORS ALONE;
NO ORAL INFORMATION OR INFORMATION PROVIDED BY ANY BROKER OR THIRD PARTY MAY BE RELIED UPON.


 


NO REPRESENTATIONS, WARRANTIES OR ASSURANCES
OF ANY KIND ARE MADE OR SHOULD BE INFERRED WITH RESPECT TO THE ECONOMIC RETURN, IF ANY, THAT MAY ACCRUE TO AN INVESTOR IN THE
COMPANY.


 






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THIS AGREEMENT CONTAINS FORWARD-LOOKING
STATEMENTS REGARDING THE COMPANY’S PERFORMANCE, STRATEGY, PLANS, OBJECTIVES, EXPECTATIONS, BELIEFS AND INTENTIONS. THE OUTCOME
OF THE EVENTS DESCRIBED IN THESE FORWARD-LOOKING STATEMENTS IS SUBJECT TO SUBSTANTIAL RISKS, AND ACTUAL RESULTS COULD DIFFER MATERIALLY.
THE SECTIONS ENTITLED “EXECUTIVE SUMMARY,” “RISK FACTORS,” AND “DESCRIPTION OF BUSINESS,”
IN ANY SECURITIES AND EXCHANGE COMMISSION (“SEC”) FILING OR REPORT, AS WELL AS THIS AGREEMENT GENERALLY, CONTAIN DISCUSSIONS
OF SOME OF THE FACTORS THAT COULD CONTRIBUTE TO THESE DIFFERENCES.


 


THE COMPANY RESERVES THE RIGHT, IN
ITS SOLE DISCRETION, TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART FOR ANY REASON OR FOR NO REASON. THE COMPANY IS NOT OBLIGATED
TO NOTIFY RECIPIENTS OF THIS AGREEMENT WHETHER ALL OF THE SECURITIES OFFERED HEREBY HAVE BEEN SOLD.


 


UNTIL SUCH TIME AS THE 8-K FILING IS
FILED, AS DESCRIBED HEREIN, SUBSCRIBERS MAY BE DEEMED TO BE IN POSSESSION OF MATERIAL NON-PUBLIC INFORMATION WITHIN THE MEANING
OF THE UNITED STATES SECURITIES LAWS AND REGULATIONS REGARDING A PUBLIC COMPANY. THIS AGREEMENT CONTAINS CONFIDENTIAL INFORMATION
CONCERNING THE COMPANY, AND HAS BEEN PREPARED SOLELY FOR USE IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN. ANY USE OF THIS
INFORMATION FOR ANY PURPOSE OTHER THAN IN CONNECTION WITH THE CONSIDERATION OF AN INVESTMENT IN THE SECURITIES OF THE COMPANY
THROUGH THE OFFERING DESCRIBED HEREIN MAY SUBJECT THE USER TO CIVIL AND/OR CRIMINAL LIABILITY. THE RECIPIENT, BY ACCEPTING THIS
AGREEMENT, AGREES (I) NOT TO DISTRIBUTE OR REPRODUCE THIS AGREEMENT, IN WHOLE OR IN PART, AT ANY TIME, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMPANY; (II) TO KEEP CONFIDENTIAL THE EXISTENCE OF THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN OR MADE
AVAILABLE IN CONNECTION WITH ANY FURTHER INVESTIGATION OF THE COMPANY; AND (III) TO REFRAIN FROM TRADING IN THE PUBLICLY-TRADED
SECURITIES OF THE COMPANY OR ANY OTHER RELEVANT COMPANY FOR SO LONG AS SUCH RECIPIENT IS IN POSSESSION OF THE MATERIAL NON-PUBLIC
INFORMATION CONTAINED HEREIN. SUBSCRIBERS ARE ADVISED THAT THEY SHOULD SEEK THEIR OWN LEGAL COUNSEL PRIOR TO EFFECTUATING ANY
TRANSACTIONS IN THE PUBLICLY TRADED COMPANY’S SECURITIES.


 


FOR RESIDENTS OF ALL STATES


 


THIS OFFERING IS BEING MADE SOLELY
TO “ACCREDITED INVESTORS,” AS SUCH TERM IS DEFINED IN RULE 501 OF REGULATION D UNDER THE SECURITIES ACT. THE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND WILL BE OFFERED AND SOLD IN RELIANCE
UPON THE EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 4(a)(2) THEREUNDER AND REGULATION D (RULE 506) OF THE SECURITIES ACT
AND CORRESPONDING PROVISIONS OF STATE SECURITIES LAWS.


 


THE SECURITIES OFFERED HEREBY ARE SUBJECT
TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
AND APPLICABLE STATE LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. SUBSCRIBERS SHOULD BE AWARE THAT THEY WILL BE REQUIRED
TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.


 


THE SECURITIES OFFERED HEREBY HAVE
NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF
THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS AGREEMENT. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.


 






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PROSPECTIVE SUBSCRIBERS SHOULD NOT
CONSTRUE THE CONTENTS OF THIS AGREEMENT AS INVESTMENT, LEGAL, BUSINESS, OR TAX ADVICE. EACH SUBSCRIBER SHOULD CONTACT HIS, HER
OR ITS OWN ADVISORS REGARDING THE APPROPRIATENESS OF THIS INVESTMENT AND THE TAX CONSEQUENCES THEREOF, WHICH MAY DIFFER DEPENDING
ON A SUBSCRIBER’S PARTICULAR FINANCIAL SITUATION. IN NO EVENT SHOULD THIS AGREEMENT BE DEEMED OR CONSIDERED TO BE TAX ADVICE
PROVIDED BY THE COMPANY.


 


FOR FLORIDA RESIDENTS ONLY


 


THE SECURITIES REFERRED TO HEREIN WILL
BE SOLD TO, AND ACQUIRED BY, THE HOLDER IN A TRANSACTION EXEMPT UNDER § 517.061 OF THE FLORIDA SECURITIES ACT. THE SECURITIES
HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF
VOIDING THE PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH SUBSCRIBER TO THE COMPANY,
AN AGENT OF THE COMPANY, OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
SUBSCRIBER, WHICHEVER OCCURS LATER.


 






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1.            SUBSCRIPTION AND PURCHASE PRICE


 


(a)      Subscription.
Subject to the conditions set forth in Section 2 hereof, the Subscriber hereby subscribes for and agrees to purchase the number
of Shares indicated on page 17 hereof on the terms and conditions described herein.


 


(b)      Purchase
of Shares. The Subscriber understands and acknowledges that the purchase price to be remitted to the Company in exchange for
the Shares shall be set at $0.25 per Share, for an aggregate purchase price as set forth on page 17 hereof (the “Aggregate
Purchase Price”). The Subscriber’s delivery of this Agreement to the Company shall be accompanied by payment for
the Shares subscribed for hereunder, payable in United States Dollars, by wire transfer of immediately available funds delivered
to Sichenzia Ross Friedman Ference LLP, as escrow agent (the “Escrow Agent”) pursuant to the terms of the escrow
agreement, in the form attached hereto as Exhibit B (the “Escrow Agreement”) in accordance with the wire instructions
set forth in the Escrow Agreement. The Subscriber understands and agrees that, subject to Section 2 and applicable laws, by executing
this Agreement, it is entering into a binding agreement.


 


2.            Acceptance,
Offering Term and Closing Procedures


 


(a)      Acceptance.
Subject to full, faithful and punctual performance and discharge by the Company of all of its duties, obligations and responsibilities
as set forth in this Agreement, the Escrow Agreement, the Series G Certificate of Designation and any other agreement entered
into between the Subscriber and the Company relating to this subscription (collectively, the "Transaction Documents")
to be performed or discharged on or prior to the Closing in which such Subscriber participates, the Subscriber shall be legally
bound to purchase the Shares pursuant to the terms and conditions set forth in this Agreement. For the avoidance of doubt, upon
the occurrence of the failure by the Company to fully, faithfully and punctually perform and discharge any of its duties, obligations
and responsibilities as set forth in any of the Transaction Documents, which shall have been performed or otherwise discharged
prior to the Closing (as defined below), the Subscriber may, on or prior to the Closing, at its sole and absolute discretion,
elect not to purchase the Shares and provide instructions to the Company to receive the full and immediate refund of the Aggregate
Purchase Price. In the event the Closing does not take place because of (i) the election not to purchase the Shares by the Subscriber
or (ii) the failure to effectuate the Initial Closing (as defined below) on or prior to June 30, 2015 (unless extended in the
discretion of the Board of Directors) for any reason or no reason, this Agreement and any other Transaction Documents shall thereafter
be terminated and have no force or effect, and the parties shall take all steps, including the execution of instructions to the
Company, to ensure that the Aggregate Purchase Price shall promptly be returned or caused to be returned to the Subscriber without
interest thereon or deduction therefrom.


 


(b)      Closing.
The closing of the purchase and sale of the Shares hereunder (the “Closing”) shall take place at such time
and place as determined by the Company and may take place in one of more closings. Closings shall take place on a Business Day
promptly following the satisfaction of the conditions set forth in Section 6 below, as determined by the Company (the “Closing
Date”). “Business Day” shall mean from the hours of 9:00 a.m. (Eastern Time) through 5:00 p.m. (Eastern
Time) of a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required
to be closed. The Shares purchased by the Subscriber will be delivered by the Company promptly following the Final Closing Date
(as defined herein) of the Offering. The initial closing shall be referred to as the “Initial Closing” and
may be held on or before June 30, 2015. The date of the Initial Closing is sometimes referred to as the “Initial Closing
Date.” Subsequent closings (each a “Subsequent Closing”) will be held until the earlier to occur
of: (i) the date on which the Company terminates the Offering, and (ii) July 15, 2015. The Offering may be extended up to July
31, 2015 (the “Final Closing” and such date of the Final Closing, the “Final Closing Date”),
without additional notice to Subscribers. Officers, directors and affiliates of the Company and the placement agent, if any, may
purchase Shares in the Offering.


 


(c)      Following
Acceptance or Rejection. The Subscriber acknowledges and agrees that this Agreement and any other documents delivered in connection
herewith will be held by the Company. Prior to the Company’s execution, in the event that this Agreement is not accepted
by the Company for whatever reason, which the Company expressly reserves the right to do, this Agreement, the Aggregate Purchase
Price received (without interest thereon) and any other documents delivered in connection herewith will be returned to the Subscriber
at the address of the Subscriber as set forth in this Agreement. If this Agreement is accepted by the Company, the Company is
entitled to treat the Aggregate Purchase Price received as an interest free loan to the Company until such time as the Subscription
is accepted.


 






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(d)       Favored
Nations Provision. For a period of twenty-four (24) months from the Closing Date, other than in connection with (i) full or
partial consideration in connection with a strategic merger, acquisition, consolidation or purchase of substantially all of the
securities or assets of a corporation or other entity which holders of such securities or debt are not at any time granted registration
rights equal to or greater than those granted to the Subscribers, (ii) the Company’s issuance of securities in connection
with strategic license agreements and other partnering arrangements so long as such issuances are not primarily for the purpose
of raising capital and which holders of such securities or debt are not at any time granted registration rights equal to or greater
than those granted to the Subscribers, (iii) the Company’s issuance of Common Stock or the issuances or grants of options
to purchase Common Stock to employees, directors, and consultants that have been approved by a majority of the independent members
of the board of directors of the Company or in existence as such plans are constituted on the date of this Agreement, (iv) the
Company’s issuance of securities upon the exercise or exchange of or conversion of any securities exercisable or exchangeable
for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement on the terms in effect on
the Closing Date,  (v) an issuance by the Company of securities resulting from the conversion of the Shares, (vi) the
Company’s issuance of Common Stock or the issuances or grants of options to purchase Common Stock to consultants and service
providers approved by a majority in amount of the Shares sold in the Offering held as of the date of approval (“Subscriber
Consent”), and (vii) any and all securities required to be assumed by the Company by the terms thereof as a result of
any of the foregoing even if issued by a predecessor acquired in connection with a business combination, merger or share exchange
(collectively, the foregoing (i) through (vii) are “Excepted Issuances”), the Company shall  not
issue any Common Stock or securities convertible into or exercisable for shares of Common Stock (or modify any of the foregoing
which may be outstanding) to any person or entity at a price per share or conversion or exercise price per share which shall be
less than $0.25 per share, being the per share price of the Series G Preferred Stock  hereunder, without Subscriber
Consent other than with regard to Excepted Issuances. Notwithstanding anything herein or in any other agreement to the contrary,
the Company shall only be required to make a single adjustment with respect to any Lower Price Issuance, regardless of the existence
of multiple basis therefore.


 


(e)      Extraordinary
Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of Common Stock as a dividend
or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine
its outstanding shares of the Common Stock into a smaller number of shares of Common Stock, then, in each such event, the Purchase
Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Purchase Price by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator
of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall
thereafter be the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be readjusted in the same manner upon
the happening of any successive event or events described herein. The number of Shares that the Subscriber shall thereafter be
entitled to receive (including number of shares of Conversion Shares the Subscriber may thereafter be entitled to receive upon
conversion of the Shares) shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would
otherwise (but for the provisions of this Section) be issuable on such conversion or exercise by a fraction of which (a) the numerator
is the Purchase Price that would otherwise (but for the provisions of this Section) be in effect, and (b) the denominator is the
Purchase Price then in effect.


 


(f)      Certificate
as to Adjustments. In each case of any adjustment or readjustment in (i) the Shares or (ii) the number of Conversion Shares
issuable upon conversion of the Shares, the Company, at its expense, will promptly cause its Chief Financial Officer or other
appropriate designee to compute such adjustment or readjustment in accordance with the terms hereof and of the Series G Certificate
of Designation, and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Company will forthwith mail a copy of each such certificate to the Subscriber.


 






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3.            THE SUBSCRIBER’s
Representations, Warranties AND cOVENANTS


 


Each Subscriber,
severally and not jointly, hereby acknowledges, agrees with and represents, warrants and covenants to the Company, as follows:


 


(a)      The Subscriber
has full power and authority to enter into this Agreement, the execution and delivery of which has been duly authorized, if applicable,
and this Agreement constitutes a valid and legally binding obligation of the Subscriber, except as may be limited by bankruptcy,
reorganization, insolvency, moratorium and similar laws of general application relating to or affecting the enforcement of rights
of creditors, and except as enforceability of the obligations hereunder are subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or law).


 


(b)      The Subscriber
acknowledges its understanding that the Offering and sale of the Securities is intended to be exempt from registration under the
Securities Act, by virtue of Section 4(a)(2) of the Securities Act and the provisions of Regulation D promulgated thereunder (“Regulation
D”). In furtherance thereof, the Subscriber represents and warrants to the Company and its affiliates as follows:


 


(i)      The
Subscriber realizes that the basis for the exemption from registration may not be available if, notwithstanding the Subscriber’s
representations contained herein, the Subscriber is merely acquiring the Securities for a fixed or determinable period in the
future, or for a market rise, or for sale if the market does not rise. The Subscriber does not have any such intention.


 


(ii)      The
Subscriber realizes that the basis for exemption would not be available if the Offering is part of a plan or scheme to evade registration
provisions of the Securities Act or any applicable state or federal securities laws, except sales pursuant to a registration statement
or sales that are exempted under the Securities Act.


 


(iii)    The
Subscriber is acquiring the Securities solely for the Subscriber’s own beneficial account, for investment purposes, and
not with a view towards, or resale in connection with, any distribution of the Securities.


 


(iv)   The
Subscriber has the financial ability to bear the economic risk of the Subscriber’s investment, has adequate means for providing
for its current needs and contingencies, and has no need for liquidity with respect to an investment in the Company.


 


(v)    The
Subscriber and the Subscriber’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively,
the “Advisors”) has such knowledge and experience in financial and business matters as to be capable of evaluating
the merits and risks of a prospective investment in the Securities. If other than an individual, the Subscriber also represents
it has not been organized solely for the purpose of acquiring the Securities.


 


(vi)   The
Subscriber (together with its Advisors, if any) has received all documents requested by the Subscriber, if any, and has carefully
reviewed them and understands the information contained therein, prior to the execution of this Agreement.


 


(c)      The Subscriber
is not relying on the Company or any of its employees, agents, sub-agents or advisors with respect to the legal, tax, economic
and related considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with, only
its Advisors. Each Advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Agreement)
the specific details of any and all past, present or future relationships, actual or contemplated, between the Advisor and the
Company or any affiliate or sub-agent thereof.


 


(d)      The Subscriber
has carefully considered the potential risks relating to the Company and a purchase of the Securities, and fully understands that
the Securities are a speculative investment that involves a high degree of risk of loss of the Subscriber’s entire investment.
Among other things, the Subscriber has carefully considered each of the risks described under the heading “Risk Factors”
in the Company’s SEC Filings (as defined below) and any additional disclosures in the nature of Risk Factors described herein.


 






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(e)      The Subscriber
will not sell or otherwise transfer any Securities without registration under the Securities Act or an exemption therefrom, and
fully understands and agrees that the Subscriber must bear the economic risk of its purchase because, among other reasons, the
Securities have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot
be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under
the applicable securities laws of such states, or an exemption from such registration is available. In particular, the Subscriber
is aware that the Securities are “restricted securities,” as such term is defined in Rule 144 promulgated under the
Securities Act (“Rule 144”), and they may not be sold pursuant to Rule 144 unless all of the conditions of
Rule 144 are met. The Subscriber also understands that the Company is under no obligation to register the Securities on behalf
of the Subscriber or to assist the Subscriber in complying with any exemption from registration under the Securities Act or applicable
state securities laws. The Subscriber understands that any sales or transfers of the Securities are further restricted by state
securities laws and the provisions of this Agreement.


 


(f)       No oral
or written representations or warranties have been made, or information furnished, to the Subscriber or its Advisors, if any,
by the Company or any of its officers, employees, agents, sub-agents, affiliates, advisors or subsidiaries in connection with
the Offering, other than any representations of the Company contained herein, and in subscribing for the Shares the Subscriber
is not relying upon any representations other than those contained herein.


 


(g)      The Subscriber’s
overall commitment to investments that are not readily marketable is not disproportionate to the Subscriber’s net worth,
and an investment in the Securities will not cause such overall commitment to become excessive.


 


(h)      The Subscriber
understands and agrees that the certificates for the Securities shall bear substantially the following legend:


 


“[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.”


 


(i)       Certificates
evidencing Securities shall not be required to contain the legend set forth in Section 3(h) above or any other legend (i)
while a registration statement covering the resale of such Securities is effective under the Securities Act, (ii) following any
sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities
are eligible to be sold, assigned or transferred under Rule 144 and the Subscriber is not an affiliate of the Company (provided
that the Subscriber provides the Company with reasonable assurances that such Securities are eligible for sale, assignment or
transfer under Rule 144 which shall not include an opinion of the Subscriber’s counsel), (iv) in connection with a sale,
assignment or other transfer (other than under Rule 144), provided that the Subscriber provides the Company with an opinion of
counsel (at the expense of the Company), in a form generally acceptable to the Company, to the effect that such sale, assignment
or transfer of the Securities may be made without registration under the applicable requirements of the Securities Act or (v)
if such legend is not required under applicable requirements of the Securities Act (including, without limitation, controlling
judicial interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to the foregoing, the Company
shall no later than three (3) business days following the delivery by the Subscriber to the Company or the transfer agent (with
notice to the Company) of a legended certificate representing such Securities (endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable), together with any other
deliveries from the Subscriber as may be required above in this Section 3(i), as directed by the Subscriber, either: (A)
provided that the Company’s transfer agent is participating in the DTC Fast Automated Securities Transfer Program and such
Securities are shares of Shares or Conversion Shares, credit the aggregate number of shares of Common Stock to which the Subscriber
shall be entitled to the Subscriber’s or its designee’s balance account with DTC through its Deposit/Withdrawal at
Custodian system or (B) if the Company’s transfer agent is not participating in the DTC Fast Automated Securities Transfer
Program, issue and deliver (via reputable overnight courier) to the Subscriber, a certificate representing such Securities that
is free from all restrictive and other legends, registered in the name of the Subscriber or its designee. The Company shall be
responsible for any transfer agent fees or DTC fees with respect to any issuance of Securities or the removal of any legends with
respect to any Securities in accordance herewith.


 






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(j)       Neither
the SEC nor any state securities commission has approved the Securities or passed upon or endorsed the merits of the Offering.
There is no government or other insurance covering any of the Securities.


 


(k)      The Subscriber
and its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting
on behalf of the Company concerning the Offering and the business, financial condition, results of operations and prospects of
the Company, and all such questions have been answered to the full satisfaction of the Subscriber and its Advisors, if any.


 


(l)       (i)      In
making the decision to invest in the Securities the Subscriber has relied solely upon the information provided by the Company
in the Transaction Documents. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate
professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the
Securities hereunder. The Subscriber disclaims reliance on any statements made or information provided by any person or entity
in the course of Subscriber’s consideration of an investment in the Securities other than the Transaction Documents.


 


(ii)    The Subscriber
represents and warrants that: (i) the Subscriber was contacted regarding the sale of the Securities by the Company (or an authorized
agent or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship and (ii) no Securities
were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the
Subscriber did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or
magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend
any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising;
or (C) observe any website or filing of the Company with the SEC in which any offering of securities by the Company was described
and as a result learned of any offering of securities by the Company.


 


(m)     The Subscriber
has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or the like
relating to this Agreement or the transactions contemplated hereby.


 


(n)      The Subscriber
is not relying on the Company or any of its employees, agents, or advisors with respect to the legal, tax, economic and related
considerations of an investment in the Securities, and the Subscriber has relied on the advice of, or has consulted with, only
its own Advisors.


 


(o)      The Subscriber
acknowledges that any estimates or forward-looking statements or projections furnished by the Company to the Subscriber were prepared
by the management of the Company in good faith, but that the attainment of any such projections, estimates or forward-looking
statements cannot be guaranteed by the Company or its management and should not be relied upon.


 


(p)      No oral
or written representations have been made, or oral or written information furnished, to the Subscriber or its Advisors, if any,
in connection with the Offering that are in any way inconsistent with the information contained herein.


 






    	- 8 -



    	 



    

 


(q)      (For ERISA
plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands
the Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets”
(as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification of plan
assets and impose other fiduciary responsibilities. The Subscriber or Plan fiduciary (i) is responsible for the decision to invest
in the Company; (ii) is independent of the Company and any of its affiliates; (iii) is qualified to make such investment decision;
and (iv) in making such decision, the Subscriber or Plan fiduciary has not relied primarily on any advice or recommendation of
the Company or any of its affiliates.


 


(r)      This Agreement
is not enforceable by the Subscriber unless it has been accepted by the Company, and the Subscriber acknowledges and agrees that
the Company reserves the right to reject any subscription for any reason.


 


(s)      The Subscriber
is an “Accredited Investor” as defined in Rule 501(a) under the Securities Act. In general, an “Accredited Investor”
is deemed to be an institution with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 (excluding
such person’s residence) or annual income exceeding $200,000 or $300,000 jointly with his or her spouse.


 


(t)      The Subscriber,
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 Offering, and has so evaluated the merits and risks of such
investment. The Subscriber has not authorized any person or entity to act as its Purchaser Representative (as that term is defined
in Regulation D of the General Rules and Regulations under the Securities Act) in connection with the Offering. The Subscriber
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.


 


4.           
THE COMPANY’S Representations, Warranties and Covenants


 


The Company hereby
acknowledges, agrees with and represents, warrants and covenants to each Subscriber, as follows:


 


(a)      Organization
and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of its
state of incorporation. The Company is duly qualified to do business, and is in good standing in the states required due to (a)
the ownership or lease of real or personal property for use in the operation of the Company's business or (b) the nature of the
business conducted by the Company, except where the failure to so qualify wouldn’t have a Material Adverse Effect, as defined
below. The Company has all requisite power, right and authority to own, operate and lease its properties and assets, to carry
on its business as now conducted, to execute, deliver and perform its obligations under this Agreement and the other Transaction
Documents to which it is a party, and to carry out the transactions contemplated hereby and thereby. All actions on the part of
the Company and its officers and directors necessary for the authorization, execution, delivery and performance of this Agreement
and the other Transaction Documents, the consummation of the transactions contemplated hereby and thereby, and the performance
of all of the Company's obligations under this Agreement and the other Transaction Documents have been taken or will be taken
prior to the Closing. This Agreement has been, and the other Transaction Documents to which the Company is a party on the Closing
will be, duly executed and delivered by the Company, and this Agreement is, and each of the other Transaction Documents to which
it is a party on the Closing will be, a legal, valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium and similar laws of
general application relating to or affecting the enforcement of rights of creditors, and except as enforceability of the obligations
hereunder are subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding
in equity or law).


 


(b)      Issuance
of Securities. The Securities to be issued to the Subscriber pursuant to this Agreement, when issued and delivered in accordance
with the terms of this Agreement and the applicable Transaction Documents, will be duly and validly issued and will be fully paid
and non-assessable.


 






    	- 9 -



    	 



    

 


(c)      Authorization;
Enforcement. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Company,
and the consummation of the transactions contemplated hereby and thereby, will not (a) constitute a violation (with or without
the giving of notice or lapse of time, or both) of any provision of any law or any judgment, decree, order, regulation or rule
of any court, agency or other governmental authority applicable to the Company, (b) require any consent, approval or authorization
of, or declaration, filing or registration with, any person, (c) result in a default (with or without the giving of notice or
lapse of time, or both) under, acceleration or termination of, or the creation in any party of the right to accelerate, terminate,
modify or cancel, any agreement, lease, note or other restriction, encumbrance, obligation or liability to which the Company is
a party or by which it is bound or to which any assets of the Company are subject, (d) result in the creation of any lien or encumbrance
upon the assets of the Company, or upon any shares of Common Stock, preferred stock or other securities of the Company, (e) conflict
with or result in a breach of or constitute a default under any provision of the articles of incorporation or bylaws of the Company,
or (f) invalidate or adversely affect any permit, license, authorization or status used in the conduct of the business of the
Company.


 


(d)      SEC Filings.
The Company is in full compliance with, the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). The Company has made available to each Subscriber through the EDGAR system
true and complete copies of the Company’s filings for the prior two full fiscal years plus any interim period (collectively,
the “SEC Filings”), and all such SEC Filings are incorporated herein by reference. The SEC Filings, when they
were filed with the SEC (or, if any amendment with respect to any such document was filed, when such amendment was filed), complied
in all material respects with the applicable requirements of the Exchange Act and the rules and regulations thereunder and did
not, as of such date, contain an 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 the light of the circumstances under which they were made, not misleading.
All reports and statements required to be filed by the Company under the Exchange Act have been filed, together with all exhibits
required to be filed therewith. The Company and each of its direct and indirect subsidiaries, if any (collectively, the “Subsidiaries”),
are engaged in all material respects only in the business described in the SEC Filings, and the SEC Filings contain a complete
and accurate description in all material respects of the business of the Company and the Subsidiaries.


 


(e)      No Financial
Advisor. The Company acknowledges and agrees that each Subscriber is acting solely in the capacity of an arm’s length
purchaser with respect to the Securities and the transactions contemplated hereby. The Company further acknowledges that Subscriber
is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and
the transactions contemplated hereby and any advice given by any Subscriber or any of its representatives or agents in connection
with this Agreement and the transactions contemplated hereby is merely incidental to such Subscriber’s purchase of the Securities.
The Company further represents to each Subscriber that the Company’s decision to enter into this Agreement has been based
solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.


 


(f)       Indemnification.
The Company will indemnify and hold harmless each Subscriber and, where applicable, its directors, officers, employees, agents,
advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including, but
not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against
any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any
representation or warranty of the Company contained herein or in any document furnished by the Company to each Subscriber in connection
herewith being untrue in any material respect or any breach or failure by the Company to comply with any covenant or agreement
made by the Company to each Subscriber in connection therewith; provided, however, that the Company’s liability
shall not exceed such Subscriber’s Aggregate Purchase Price tendered hereunder.


 


(g)      Capitalization
and Additional Issuances. The authorized and outstanding capital stock of the Company on a fully diluted basis as of the date
of this Agreement and the Closing Date (not including the Securities) are substantially as set forth in the Company’s SEC
Filings. Except as set forth in the Company’s SEC Filings, there are no options, warrants, or rights to subscribe to, securities,
rights, understandings or obligations convertible into or exchangeable for or giving any right to subscribe for any shares of
capital stock or other equity interest of the Company or any of its subsidiaries. The only officer, director, employee and consultant
stock option or stock incentive plan or similar plan currently in effect or contemplated by the Company are described in the Company’s
SEC Filings. There are no outstanding agreements or preemptive or similar rights affecting the Company's Common Stock.


 






    	- 10 -



    	 



    

 


(h)      Private
Placements. Assuming the accuracy of each Subscriber’s representations and warranties set forth in Section 3, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Subscribers as contemplated
hereby.


 


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


 


(k)      Shell
Company Status. The Company is not and has never been an issuer identified in Rule 144(i)(1) of the Securities Act.


 


(l)       Litigation.
Except as set forth in the SEC Filings, there is no action, suit, proceeding, inquiry or investigation before or by the Principal
Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge
of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s
or its Subsidiaries’ officers or directors which is outside of the ordinary course of business or individually or in the
aggregate material to the Company or any of its Subsidiaries.  No director, officer or employee of the Company or any of
its subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation. 
Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the SEC involving the Company, any of its Subsidiaries or any current or former director or officer of the
Company or any of its Subsidiaries.  The SEC has not issued any stop order or other order suspending the effectiveness of
any registration statement filed by the Company under the Securities Act or the Exchange Act. “Governmental Entity”
means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state,
local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body
exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority
or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a
government or a public international organization or any of the foregoing. “Principal Market” means any of
the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE
MKT, The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, the New York Stock Exchange, OTCQX,
OTCQB or the OTC Bulletin Board (or any successors to any of the foregoing).


 


(m)     Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union.  The Company believes that its and its Subsidiaries’ relations with their respective employees are
good.  The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations
respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except
where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. “Material Adverse Effect” means any material adverse effect on (i) the business, properties,
assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or
any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction
Documents or (iii) the authority or ability of the Company or any of its Subsidiaries to perform any of their respective obligations
under any of the Transaction Documents. 


 


(n)      Tax
Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely 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, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate
for the payment of all 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 and its Subsidiaries know of no basis for any such claim.  The Company is not operated in such a manner as
to qualify as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.


 






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(o)      Indebtedness
and Other Contracts. Except as set forth in the SEC Filings, neither the Company nor any of its Subsidiaries, (i) has any
outstanding Indebtedness (as defined below), (ii) is a party to any contract, agreement or instrument, the violation of which,
or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result
in a Material Adverse Effect, (iii) is in violation of any term of, or in default under, any contract, agreement or instrument
relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in
a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance
of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect.  For purposes
of this Agreement:  (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness for
borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including,
without limitation, “capital leases” in accordance with generally accepted accounting principles) (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters
of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with
respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary
obligations under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently
applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through
(F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any mortgage, claim, lien, tax, right of first refusal, pledge, charge, security interest or other encumbrance upon or in
any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets
or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect
of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) “Contingent Obligation”
means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness,
lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole
or in part) against loss with respect thereto; and (z) “Person” means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any Governmental
Entity or any department or agency thereof.


 


(p)      No Undisclosed
Events, Liabilities, Developments or Circumstances. Except as set forth in the SEC Filings, no event, liability, development
or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries
or any of their respective businesses, properties, liabilities, operations (including results thereof) or condition (financial
or otherwise), that (i) would be required to be disclosed by the Company under applicable securities laws on a registration statement
on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly
announced, (ii) could have a material adverse effect on any Subscriber’s investment hereunder or (iii) would reasonably
be expected to have a Material Adverse Effect.


 


(q)      No
Additional Agreements. Neither the Company nor any of its Subsidiaries has any agreement or understanding with any Subscriber
with respect to the transactions contemplated by the Transaction Documents other than pursuant to documents substantially identical
to the Transaction Documents.


 


(r)       No
Disqualification Events. To the Company’s knowledge, none of the Company, any of its predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company participating in the offering contemplated hereby, 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”) 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.


 






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(s)      General
Solicitation. None of the Company, any of its affiliates (as defined in Rule 501(b) under the Securities Act) or any person
acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any
form of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or
radio; and (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.


 


(t)       Disclosure.


 


The Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Subscribers or their agents or counsel with
any information that constitutes or could reasonably be expected to constitute material, non-public information regarding the
Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the other
Transaction Documents. The Company understands and confirms that each of the Subscribers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Subscribers regarding the Company and its
Subsidiaries, their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished
by or on behalf of the Company or any of its Subsidiaries 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 the light of the circumstances
under which they were made, not misleading. No event or circumstance has occurred or information exists with respect to the Company
or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results thereof)
or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before
the date hereof or announcement by the Company but which has not been so publicly disclosed. The Company acknowledges and agrees
that no Subscriber makes or has made any representations or warranties with respect to the transactions contemplated hereby other
than those specifically set forth in Section 3.


 


5.            OTHER
AGREEMENTS OF THE PARTIES


 


(a)      Furnishing of Information.
As long as any Subscriber owns Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange
Act. As long as any Subscriber owns Securities, if the Company is not required to file reports pursuant to the Exchange Act, it
will prepare and furnish to the Subscribers and make publicly available in accordance with Rule 144(c) under the Securities Act
such information as is required for the Subscribers to sell the Securities under Rule 144. The Company further covenants that
it will take such further action as any holder of Securities may reasonably request, at the sole cost and expense of the Company
including transfer agent and legal opinion fees and expenses, all to the extent required from time to time to enable such person
to sell such Securities without registration under the Securities Act within the limitation of the exemptions proved by Rule 144
under the Securities Act.


 


(b)      Shareholder Rights Plan.
No claim will be made or enforced by the Company or, to the knowledge of the Company, any other person that any Subscriber is
an “Acquiring Person” under any shareholder rights plan or similar plan or arrangement in effect or hereafter adopted
by the Company, or that any Subscriber 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 Subscribers.


 


(c)      Securities Laws Disclosure;
Publicity. The Company shall by 8:30 a.m. (New York City time) (a) on the first Business Day after this Agreement has been
executed, issue a press release disclosing the material terms of the transactions contemplated hereby and (b) within four (4)
Business Days after this Agreement has been executed, file a Current Report on Form 8-K with the SEC (the “8-K Filing”),
including the Transaction Documents as exhibits thereto. From and after the issuance of such press release and the 8-K Filing,
the Company shall have publicly disclosed all material, non-public information delivered to any of the Subscribers by the Company
or any of its Subsidiaries, or any of their respective officers, directors, employees or agents. The Company and each Subscriber
shall consult with each other in issuing any press releases with respect to the transactions contemplated hereby, and no Subscriber
shall issue any such press release or otherwise make any such public statement without the prior consent of the Company, which
consent shall not unreasonably be withheld. Notwithstanding the foregoing, the Company shall not publicly disclose the name of
any Subscriber, or include the name of any Subscriber in any filing with the SEC or any regulatory agency, without the prior written
consent of such Subscriber,. The Company understands that any such disclosure shall cause irreparable harm and each Subscriber
shall be entitled to injunctive relief and liquidated damages in connection therewith.


 






    	- 13 -



    	 



    

 


(d)      Integration. The
Company shall not, and shall use its best efforts to ensure that no affiliate of the Company shall, after the date hereof, sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any security that would be integrated with the offer
or sale of the Units in a manner that would require the registration under the Securities Act of the sale of the Units to the
Subscribers.


 


(e)      Reservation
of Securities. The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant
to the Transaction Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents.
In the event that at any time the then authorized shares of Common Stock are insufficient for the Company to satisfy its obligations
in full under the Transaction Documents, the Company shall promptly take such actions as may be required to increase the number
of authorized shares.


 


(f)       Use of Proceeds. The Company
anticipates using the gross proceeds from the Offering for general working capital purposes.


 


(g)      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 Subscriber
or its agents or counsel with any information that the Company believes constitutes or could constitute material non-public information,
and each Subscriber agrees, and shall direct its agents and counsel not to, request any material non-public information from the
Company or any Person acting on its behalf, unless prior thereto such Subscriber shall have executed a written agreement with
the Company regarding the willingness to accept receipt of such material non-public information and acknowledges the confidentiality
and use of such information and the Company’s covenant to file a further SEC filing or report and the period in which such
information shall remain confidential or be required to not be disclosed. The Company understands and confirms that each Subscriber
shall be relying on the foregoing covenant in effecting transactions in securities of the Company. In addition, effective upon
the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under
any agreement, whether written or oral, between the Company and any of its Subsidiaries or any of their respective officers, directors,
affiliates, employees or agents, on the one hand, and the Subscriber or any of its affiliates on the other hand, shall terminate.


 


(h)      Form D and Blue
Sky


 


The Company shall file
a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to each Subscriber promptly
after such filing. The availability of the filed Form D on EDGAR shall satisfy the foregoing delivery requirement. The Company
shall, on or before the Closing Date, 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 Subscribers at the Closing pursuant to this Agreement under applicable
securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification),
and shall provide evidence of any such action so taken to the Subscribers on or prior to the Closing Date. Without limiting any
other obligation of the Company under this Agreement, the Company shall timely make all filings and reports relating to the offer
and sale of the Securities required under all applicable securities laws (including, without limitation, all applicable federal
securities laws and all applicable “Blue Sky” laws), and the Company shall comply with all applicable federal, foreign,
state and local laws, statutes, rules, regulations and the like relating to the offering and sale of the Securities to the Subscribers.


 


(j)       Conversion
Procedures. Each of the form of Notice of Conversion included in the Series G Certificate of Designation set forth the totality
of the procedures required of the Subscribers in order to convert the Shares. No legal opinion, other information or instructions
shall be required of the Subscribers to convert their Shares (other than customary 144 representation letters if such Shares are
to be sold in reliance upon the exemption provided by to Rule 144). The Company shall honor conversions of the Shares and shall
deliver the Conversion Shares in accordance with the terms, conditions and time periods set forth in the Series G Certificate
of Designation.


 






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6.            CONDITIONS TO ACCEPTANCE OF
SUBSCRIPTION


 


(a)      The Closing
of the sale of the Shares is conditioned upon satisfaction of the following conditions precedent on or before the Closing Date:


 


(i)       As of the
Closing, no legal action, suit or proceeding shall be pending against the Company that seeks to restrain or prohibit the transactions
contemplated by this Agreement.


 


(ii)      The representations
and warranties of the Company and the Subscribers contained in this Agreement shall have been true and correct in all material
respects on the date of this Agreement and shall be true and correct as of the Closing as if made on the Closing Date.


 


7.            MISCELLANEOUS
PROVISIONS


 


(a)      All parties
hereto have been represented by counsel, and no inference shall be drawn in favor of or against any party by virtue of the fact
that such party’s counsel was or was not the principal draftsman of this Agreement.


 


(b)      Each of
the parties hereto shall be responsible to pay the costs and expenses of its own legal counsel in connection with the preparation
and review of this Agreement and related documentation.


 


(c)      Neither
this Agreement, nor any provisions hereof, shall be waived, modified, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, modification, discharge or termination is sought.


 


(d)      The representations,
warranties and agreement of each Subscriber and the Company made in this Agreement shall survive the execution and delivery of
this Agreement and the delivery of the Securities.


 


(e)      Any party
may send any notice, request, demand, claim or other communication hereunder to the Subscriber at the address set forth on the
signature page of this Agreement or to the Company at its primary office (including personal delivery, expedited courier, messenger
service, fax, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication will be deemed
to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to
which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties written
notice in the manner herein set forth.


 


(f)      Except as
otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties to this Agreement and
their heirs, executors, administrators, successors, legal representatives and assigns. If any Subscriber is more than one person
or entity, the obligation of any Subscriber shall be joint and several and the agreements, representations, warranties and acknowledgments
contained herein shall be deemed to be made by, and be binding upon, each such person or entity and its heirs, executors, administrators,
successors, legal representatives and assigns. This Agreement sets forth the entire agreement and understanding between the parties
as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every
nature among them.


 


(g)      This Agreement
is not transferable or assignable by the Company.


 


(h)      The Company
hereby represents and warrants as of the date hereof and as of any Closing Date that none of the terms offered to any Person with
respect to any offer, sale or subscription of Securities (each a "Subscription Document"), is or will be more
favorable to such Person than those of the Subscriber and this Agreement shall be, without any further action by the Subscriber
or the Company, deemed amended and modified in an economically and legally equivalent manner such that the Subscriber shall receive
the benefit of the more favorable terms contained in such Subscription Document. Notwithstanding the foregoing, the Company agrees,
at its expense, to take such other actions (such as entering into amendments to the Transaction Documents) as the Subscriber may
reasonably request to further effectuate the foregoing.


 






    	- 15 -



    	 



    

 


(i)       Except as
otherwise provided herein, this Agreement shall not be changed, modified or amended and no right hereunder shall be waived, except
in writing signed by both (a) the Company and the (b) Subscribers in the Offering holding at least 60% of the Shares issued in
the Offering then held by the original Subscribers. The Company shall be prohibited from offering any additional consideration
to any Subscriber in this Offering (or such original Subscriber’s transferee) for the purposes of inducing such person to
change, modify, waive or amend any term of this Agreement or any other Transaction Document without making the same offer on a
pro-rata basis to all other Subscribers (and those transferees) in this Offering allocable to the securities acquired by such
transferee(s).


 


(j)      This Agreement
shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts of
law principles.


 


(k)      The Company
and each Subscriber hereby agree that any dispute that may arise between them arising out of or in connection with this Agreement
shall be adjudicated before a court located in the City of New York, Borough of Manhattan, and they hereby submit to the exclusive
jurisdiction of the federal and state courts of the State of New York located in the City of New York, Borough of Manhattan with
respect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now or hereafter may
have respecting the venue of any such action or proceeding brought in such a court or respecting the fact that such court is an
inconvenient forum, relating to or arising out of this Agreement or any acts or omissions relating to the sale of the securities
hereunder, and consent to the service of process in any such action or legal proceeding by means of registered or certified mail,
return receipt requested, postage prepaid, in care of the address set forth herein or such other address as either party shall
furnish in writing to the other.


 


(l)      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.


 


(m)      This Agreement
may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.


 


[Signature Pages Follow]


 






    	- 16 -



    	 



    




 


ALL
SUBSCRIBERS MUST COMPLETE THIS PAGE


  


IN WITNESS WHEREOF,
the Subscriber has executed this Agreement on the ____ day of _____, 2015.


 


 


	 	x $0.25 for per Share    =	 
	Shares
    subscribed for	 	Aggregate Purchase Price


 


Manner in which Title is to be held (Please Check One):


 


	1.	___	Individual	7.	___	Trust/Estate/Pension
or Profit sharing Plan

        Date Opened:______________

	2.	___	Joint Tenants
    with Right of Survivorship	8.	___	As a Custodian for 

        ________________________________

        Under the Uniform Gift to Minors
Act of the State of 

        ________________________________

	3.	___	Community
    Property	9.	___	Married with
    Separate Property
	4.	___	Tenants in
    Common	10.	___	Keogh
	5.	___	Corporation/Partnership/
    Limited Liability Company	11.	___	Tenants by
    the Entirety
	6.	___	IRA	 	 	 


  


ALTERNATIVE DISTRIBUTION INFORMATION


 


To direct distribution
to a party other than the registered owner, complete the information below. YOU MUST COMPLETE THIS SECTION IF THIS IS AN IRA INVESTMENT.


 


Name of Firm (Bank, Brokerage, Custodian):


 


Account Name:


 


Account Number:


 


Representative Name:


 


Representative Phone Number:


 


Address:


 


City, State, Zip:


 






    	- 17 -



    	 



    

 


IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER
MUST SIGN.

INDIVIDUAL SUBSCRIBERS MUST COMPLETE THIS PAGE 18.

SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGE 19.


 





	                             EXECUTION
    BY NATURAL PERSONS                          

        Exact Name in Which Title is
        to be Held

         

	_________________________________

        Name (Please Print)
	 	_________________________________

        Name of Additional Purchaser

	 	 	 
	_________________________________

        Residence: Number and Street
	 	_________________________________

        Address of Additional Purchaser

	 	 	 
	_________________________________

        City, State and Zip Code
	 	_________________________________

        City, State and Zip Code

	 	 	 
	_________________________________

        Social Security Number
	 	_________________________________

        Social Security Number

	 	 	 
	_________________________________

        Telephone Number
	 	_________________________________

        Telephone Number

	 	 	 
	_________________________________

        Fax Number (if available)
	 	________________________________

        Fax Number (if available)

	 	 	 
	_________________________________

        E-Mail (if available)
	 	________________________________

        E-Mail (if available)

	 	 	 
	__________________________________

        (Signature) 

         
	 	________________________________

        (Signature of Additional Purchaser)

	ACCEPTED
    this ___ day of _________ 2015, on behalf of the Company.
	 	 

        By:   _________________________________

                 Name:
          Title:



  


[SIGNATURE PAGE FOR SUBSCRIPTION
AGREEMENT]


 






    	- 18 -



    	 



    

 


EXECUTION BY SUBSCRIBER WHICH IS AN
ENTITY


 (Corporation, Partnership,
LLC, Trust, Etc.)


 


	_____________________________________________________________________________

        Name of Entity
(Please Print)

	 
	Date
    of Incorporation or Organization:
	 
	State
    of Principal Office:
	 
	Federal Taxpayer Identification Number:

                                                        

        ____________________________________________

         Office Address

          

        ____________________________________________

         City, State and Zip Code

          

        ____________________________________________

         Telephone Number

         

        ____________________________________________

         Fax Number (if available)

          

        ____________________________________________

         E-Mail (if available)

          

	 	 	By:
    _________________________________

           Name:

           Title:
	 	 	 
	[seal]

         

        Attest: _________________________________

                                   (If Entity is a Corporation)
	 	_________________________________

         

        _________________________________

        Address

	 	 	 
	ACCEPTED
    this ____ day of __________ 2015, on behalf of the Company.
			 

        By: _________________________________

               Name:

               Title:



 


[SIGNATURE PAGE FOR SUBSCRIPTION
AGREEMENT]


 






    	- 19 -



    	 



    




 


INVESTOR QUESTIONNAIRE


 


Instructions: Check all boxes below
which correctly describe you.


 


		o	You
    are (i) a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”),
    (ii) a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether
    acting in an individual or fiduciary capacity, (iii) a broker or dealer registered pursuant to Section 15 of the Securities
    Exchange Act of 1934, as amended (the “Exchange Act”), (iv) an insurance company as defined in Section 2(13) of
    the Securities Act, (v) an investment company registered under the Investment Company Act of 1940, as amended (the “Investment
    Company Act”), (vi) a business development company as defined in Section 2(a)(48) of the Investment Company Act, (vii)
    a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the
    Small Business Investment Act of 1958, as amended, (viii) a plan established and maintained by a state, its political subdivisions,
    or an agency or instrumentality of a state or its political subdivisions, for the benefit of its employees and you have total
    assets in excess of $5,000,000, or (ix) an employee benefit plan within the meaning of the Employee Retirement Income Security
    Act of 1974, as amended (“ERISA”) and (1) the decision that you shall subscribe for and purchase shares of common
    stock or preferred stock, is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings
    and loan association, insurance company, or registered investment adviser, or (2) you have total assets in excess of $5,000,000
    and the decision that you shall subscribe for and purchase the Shares is made solely by persons or entities that are accredited
    investors, as defined in Rule 501 of Regulation D promulgated under the Securities Act (“Regulation D”) or (3)
    you are a self-directed plan and the decision that you shall subscribe for and purchase the Securities is made solely by persons
    or entities that are accredited investors.


 


		o	You
    are a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended.


 


		o	You
    are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”),
    a corporation, Massachusetts or similar business trust or a partnership, in each case not formed for the specific purpose
    of making an investment in the Securities and its underlying securities in excess of $5,000,000.


 


		o	You
    are a director or executive officer of the Company.


 


		o	You
    are a natural person whose individual net worth, or joint net worth with your spouse, exceeds $1,000,000 (excluding residence)
    at the time of your subscription for and purchase of the Securities.


 


		o	You
    are a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income
    with your spouse in excess of $300,000 in each of the two most recent years, and who has a reasonable expectation of reaching
    the same income level in the current year.


 


		o	You
    are a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities and
    whose subscription for and purchase of the Securities is directed by a sophisticated person as described in Rule 506(b)(2)(ii)
    of Regulation D.


 


		o	You
    are an entity in which all of the equity owners are persons or entities described in one of the preceding paragraphs.


 






    	- 20 -



    	 



    

 


Check all boxes below which correctly describe you.


 


With respect to this investment in the Securities, your:


 





	 	Investment Objectives: 	☐	Aggressive Growth	☐	Speculation		
	 	 	 	 	 	 	 	 
	 	Risk Tolerance: 	☐ 	Low Risk 	☐	Moderate Risk	☐	High Risk




 


Are
you associated with a FINRA Member Firm?        o 
Yes        o
No


 


Your initials (purchaser
and co-purchaser, if applicable) are required for each item below:


 


____  
____  I/We understand that this investment is not guaranteed.


 


____  
____  I/We are aware that this investment is not liquid.


 


____  
____  I/We are sophisticated in financial and business affairs and are able to evaluate the risks and merits of
an investment in this offering.


 


____  
____  I/We confirm that this investment is considered “high risk.” (This type of investment is considered
high risk due to the inherent risks including lack of liquidity and lack of diversification.  Success or failure of private placements such as this is dependent on the corporate issuer of these securities and is outside the control
of the investors. While potential loss is limited to the amount invested, such loss is possible.)


 


The Subscriber
hereby represents and warrants that all of its answers to this Investor Questionnaire are true as of the date of its execution
of the Subscription Agreement pursuant to which it purchased the Securities.


 


	

        ___________________________________

        Name of Purchaser [please print]

         

        ___________________________________

        Signature of Purchaser (Entities please

        provide signature of Purchaser’s
duly

        authorized signatory.)

         

        ___________________________________

        Name of Signatory (Entities only)

         

        ___________________________________

        Title of Signatory (Entities only)
		 

                                                       ___________________________________

        Name of Co-Purchaser [please print]

         

        ___________________________________

        Signature of Co-Purchaser



 


[SIGNATURE PAGE FOR INVESTOR QUESTIONNAIRE]





 


 


- 21 -