Exhibit 10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of March 4, 2013, is by and among Fuse Science, Inc., a Nevada
corporation with offices located at 6135 NW 167th Street, #E21, Miami Lakes, Florida 33015 (the “Company”),
and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively,
the “Buyers”).


 


RECITALS


 


A.The Company and
each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation D”)
as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.


 


B.The Company has
authorized the issuance of (i) senior convertible notes, in the aggregate original principal amount of $1,500,000, in the form
attached hereto as Exhibit A-1 (the “Series A Notes”), which Series A Notes shall be convertible
into shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”) (as converted,
collectively, the “Series A Conversion Shares”), in accordance with the terms of the Series A Notes and (ii)
senior subordinated convertible notes, in the aggregate original principal amount of $550,000, in the form attached hereto as Exhibit
A-2 (the “Series B Notes”, and together with the Series A Notes, the “Notes”), which
Series B Notes shall be convertible into shares of Common Stock (as converted, collectively, the “Series B Conversion
Shares”, and together with the Series A Conversion Shares, the “Conversion Shares”), in accordance
with the terms of the Series B Notes.


 


C. Each Buyer wishes
to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) either (x) a Series A
Note in the aggregate original principal amount set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers
or (y) Series B Note in the aggregate original principal amount set forth opposite such Buyer’s name in column (4) on the
Schedule of Buyers, (ii) a warrant to initially acquire up to that number of additional shares of Common Stock set forth opposite
such Buyer’s name in column (5) on the Schedule of Buyers, in the form attached hereto as Exhibit B (the “Series
A Warrants”) (as exercised, collectively, the “Series A Warrant Shares”) and (iii) a warrant to initially
acquire up to that number of additional shares of Common Stock set forth opposite such Buyer’s name in column (6) on the
Schedule of Buyers, in the form attached hereto as Exhibit C (the “Series B Warrants”) (as exercised,
collectively, the “Series B Warrant Shares”). The Series A Warrants and the Series B Warrants are collectively
referred to herein as the “Warrants.” The Series A Warrant Shares and the Series B Warrant Shares are collectively
referred to herein as the “Warrant Shares.”


 


D.The Notes may
be entitled to interest and certain other amounts, which, at the option of the Company and subject to certain conditions, may be
paid in shares of Common Stock (the “Interest Shares”) or in cash.


 






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E.At the Closing,
the parties hereto shall execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit D
(the “Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain registration
rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement), under the 1933 Act and the
rules and regulations promulgated thereunder, and applicable state securities laws.


 


F.The Notes, the
Conversion Shares, the Interest Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities.”


 


G.At the Closing,
solely to the extent any Buyers are purchasing Series B Notes hereunder, the parties hereto shall enter into a Subordination Agreement,
in the form and substance satisfactory to the Buyers purchasing the Series A Notes hereunder (the “Subordination Agreement”),
pursuant to which the parties hereto have agreed that the Series B Notes shall be subordinate to the Series A Notes as provided
thereunder.


 


AGREEMENT


 


NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:


 


1.PURCHASE
AND SALE OF NOTES AND WARRANTS.


 


(a)Notes and
Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall
issue and sell to each Buyer, and each Buyer severally, but not jointly, shall purchase from the Company on the Closing Date (as
defined below), as applicable, either (x) a Series A Note in the original principal amount as is set forth opposite such Buyer’s
name in column (3) on the Schedule of Buyers or (y) a Series B Note in the original principal amount as is set forth opposite such
Buyer’s name in column (4) on the Schedule of Buyers, in each case, along with (i) Series A Warrants to initially acquire
up to that aggregate number of Series A Warrant Shares as is set forth opposite such Buyer’s name in column (5) on the Schedule
of Buyers and (ii) Series B Warrants to initially acquire up to that aggregate number of Series B Warrant Shares as is set forth
opposite such Buyer’s name in column (6) on the Schedule of Buyers.


 


(b)Closing.
The closing (the “Closing”) of the purchase of the Notes and the Warrants by the Buyers shall occur at the offices
of Greenberg Traurig, LLP, MetLife Building, 200 Park Avenue, New York, NY 10166. The date and time of the Closing (the “Closing
Date”) shall be 10:00 a.m., New York time, on the first (1st) Business Day on which the conditions to the Closing set
forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually agreed to by the Company and each Buyer).
As used herein “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks
in New York, New York are authorized or required by law to remain closed.


 


(c)Purchase
Price. The aggregate purchase price for the Notes and the Warrants to be purchased by each Buyer (the “Purchase Price”)
shall be the amount set forth opposite such Buyer’s name in column (7) on the Schedule of Buyers. Each Buyer and the Company
agree that the Notes and the Warrants constitute an “investment unit” for purposes of Section 1273(c)(2) of the Internal
Revenue Code of 1986, as amended (the “Code”).


 






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(d)Form of Payment.
On the Closing Date, (i) each Buyer shall pay its respective Purchase Price (less, in the case of any Buyer, the amounts withheld
by such Buyer pursuant to Section 4(g)) to the Company for the Notes and the Warrants to be issued and sold to such Buyer at the
Closing, by wire transfer of immediately available funds in accordance with the Company’s written wire instructions and (ii) the
Company shall deliver to each Buyer (A) as applicable, either (x) a Series A Note in the aggregate original principal amount as
is set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers or (y) a Series B Note in the aggregate original
principal amount as is set forth opposite such Buyer’s name in column (4) of the Schedule of Buyers, (B) a Series A Warrant
pursuant to which such Buyer shall have the right to initially acquire up to such number of Series A Warrant Shares as is set forth
opposite such Buyer’s name in column (5) of the Schedule of Buyers and (C) a Series B Warrant pursuant to which such Buyer
shall have the right to initially acquire up to such number of Series B Warrant Shares as is set forth opposite such Buyer’s
name in column (6) of the Schedule of Buyers, in all cases, duly executed on behalf of the Company and registered in the name of
such Buyer or its designee.


 


2.BUYER’S
REPRESENTATIONS AND WARRANTIES.


 


Each Buyer, severally
and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of the Closing
Date:


 


(a)Organization;
Authority. If an entity, such Buyer is an entity duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated
by the Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and
thereunder. If an individual, such Buyer has the legal capacity and the requisite power and authority to enter into and to consummate
the transactions contemplated by the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder
and thereunder.


 


(b)No Public
Sale or Distribution. Such Buyer (i) is acquiring its Note and Warrants, (ii) upon conversion of its Note will acquire the
Conversion Shares issuable upon conversion thereof, and (iii) upon exercise of its Warrants will acquire the Warrant Shares
issuable upon exercise thereof, in each case, for its own account and not with a view towards, or for resale in connection with,
the public sale or distribution thereof in violation of applicable securities laws, except pursuant to sales registered or exempted
under the 1933 Act; provided, however, by making the representations herein, such Buyer does not agree, or make any representation
or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities
at any time in accordance with or pursuant to a registration statement or an exemption from registration under the 1933 Act. Such
Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the
Securities in violation of applicable securities laws.


 






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(c)Accredited
Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.
Such Buyer has completed an Investor Questionnaire in the form attached hereto as Exhibit E hereto (the “Questionnaire”).


 


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


 


(e)Information.
Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities, which have been requested by such Buyer. Such Buyer
and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Such Buyer understands that its investment
in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its acquisition of the Securities.


 


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


 


(g)Transfer
or Resale. Such Buyer understands that except as provided in the Registration Rights Agreement and Section 4(h) hereof: (i)
the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the
Company (if requested by the Company) an opinion of counsel to such Buyer, in a form reasonably acceptable to the Company, to the
effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from
such registration, or (C) such Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned
or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule
144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of
Rule 144, and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or
the Person (as defined below) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the
1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated
thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933
Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.


 






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(h)Validity;
Enforcement. This Agreement, the Registration Rights Agreement and, if applicable, the Subordination Agreement have been duly
and validly authorized, executed and delivered on behalf of such Buyer and constitute the legal, valid and binding obligations
of such Buyer enforceable against such Buyer in accordance with their respective terms, except as such enforceability may be limited
by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.


 


(i)No Conflicts.
The execution, delivery and performance by such Buyer of this Agreement, the Registration Rights Agreement and, if applicable,
the Subordination Agreement and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i)
result in a violation of the organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer,
except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations
hereunder.


 


(j)Residency.
Such Buyer is a resident of the jurisdiction specified below its address on the Schedule of Buyers.


 


3.REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.


 


The Company represents
and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:


 


(a)Organization
and Qualification. Each of the Company and each of its Subsidiaries is an entity duly organized and validly existing and in
good standing under the laws of the jurisdiction in which it is formed, and has the requisite power and authority to own its properties
and to carry on its business as now being conducted and as presently proposed to be conducted. Each of the Company and each of
its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its
ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this Agreement, “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 and the Subsidiaries 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 (as defined below).
Other than the Persons (as defined below) set forth in the SEC Documents or as set forth on Schedule 3(a) hereto, the Company has
no Subsidiaries. “Subsidiaries” means any Person in which the Company, directly or indirectly, (I) owns a majority
of the outstanding capital stock or holds a majority of any equity or similar interest of such Person or (II) controls or operates
all or any part of the business, operations or administration of such Person, and each of the foregoing, is individually referred
to herein as a “Subsidiary.”


 






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(b)Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and the reservation
for issuance and issuance of the Conversion Shares issuable upon conversion of the Notes and the reservation for issuance and issuance
of any Interest Shares issuable pursuant to the terms of the Notes and the issuance of the Warrants and the reservation for issuance
and issuance of the Warrant Shares issuable upon exercise of the Warrants) have been duly authorized by the Company’s board
of directors or other governing body and (other than the filing with the SEC of one or more Registration Statements in accordance
with the requirements of the Registration Rights Agreement, a Form D with the SEC and any other filings as may be required by any
state securities agencies) no further filing, consent or authorization is required by the Company, its board of directors or its
stockholders or other governing body. This Agreement and the other Transaction Documents to which it is a party have been duly
executed and delivered by the Company and constitutes the legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution
may be limited by federal or state securities law. “Transaction Documents” means, collectively, this Agreement,
the Notes, the Warrants, the Registration Rights Agreement, the Subordination Agreement, the Lock-Up Agreements, the Irrevocable
Transfer Agent Instructions (as defined below) and each of the other agreements and instruments entered into or delivered by any
of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.


 


(c)Issuance
of Securities. The issuance of the Notes and the Warrants are duly authorized and upon issuance in accordance with the terms
of the Transaction Documents shall be validly issued, and free from all preemptive or similar rights, taxes, liens, charges and
other encumbrances with respect to the issuance thereof. As of the Closing, the Company shall have reserved from its duly authorized
capital stock not less than the sum of (i) 130% of the maximum number of Conversion Shares initially issuable upon conversion of
the Notes (assuming for purposes hereof that the Notes are convertible at the initial Conversion Price (as defined in the Notes)
and without taking into account any limitations on the conversion of the Notes set forth in the Notes), (ii) 130% of the maximum
number of Interest Shares initially issuable pursuant to the terms of the Notes from the Closing Date through the second anniversary
of the Closing Date (determined as if issued on the Trading Day (as defined in the Notes) immediately preceding the Closing Date
without taking into account any limitations on the issuance of securities set forth in the Notes) and (iii) the maximum number
of Warrant Shares initially issuable upon exercise of the Warrants (without taking into account any limitations on the exercise
of the Warrants set forth therein). Upon issuance or conversion in accordance with the Notes or exercise in accordance with the
Warrants (as the case may be), the Conversion Shares, the Interest Shares and the Warrant Shares, respectively, when issued, will
be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.
Subject to the accuracy of the representations and warranties of the Buyers in this Agreement, the offer and issuance by the Company
of the Securities is exempt from registration under the 1933 Act.


 






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(d)No Conflicts.
The execution, delivery and performance of the Transaction Documents by the Company and its Subsidiaries and the consummation by
the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation, the issuance
of the Notes, the Warrants, the Conversion Shares, the Interest Shares and Warrant Shares and the reservation for issuance of the
Conversion Shares, the Interest Shares and the Warrant Shares) will not (i) result in a violation of the Certificate of Incorporation
(as defined below) (including, without limitation, any certificate of designation contained therein) or other organizational documents
of the Company or any of its Subsidiaries, any capital stock of the Company or any of its Subsidiaries or Bylaws (as defined below)
of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations and
the rules and regulations of the OTCQB Market (the “Principal Market”) and including all applicable federal
laws, rules and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company
or any of its Subsidiaries is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such violations
that could not reasonably be expected to have a Material Adverse Effect.


 


(e)Consents.
Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or
registration with (other than the filing with the SEC of one or more Registration Statements in accordance with the requirements
of the Registration Rights Agreement, a Form D with the SEC and any other filings as may be required by any state securities agencies),
any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order for it to execute,
deliver or perform any of its respective obligations under or contemplated by the Transaction Documents, in each case, in accordance
with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary
is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to the Closing Date,
and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company or
any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Transaction
Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances
which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. “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.


 






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(f)Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that to the Company’s knowledge,
each Buyer is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries,
(ii) an “affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a
“beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the “1934 Act”)). The Company further acknowledges that no Buyer is acting
as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives
or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental
to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision
to enter into the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company
and its representatives.


 


(g)No General
Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person
acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation
D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its investment advisor)
relating to or arising out of the transactions contemplated hereby. Other than National Securities Corporation and Dawson James
(collectively, the “Placement Agents”), neither the Company nor any of its Subsidiaries has engaged any placement
agent or other agent in connection with the offer or sale of the Securities. Schedule 3(g) hereto sets forth certain affiliated
relationships between the Company and the Placement Agents.


 


(h)No Integrated
Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on 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
require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings
or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company under any applicable
stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation
system on which any of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries,
their affiliates nor any Person acting on their behalf will take any action or steps that would require registration of the issuance
of any of the Securities under the 1933 Act or cause the offering of any of the Securities to be integrated with any other offerings
of securities of the Company, which would require registration under the 1933 Act of the offering contemplated hereby.


 






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(i)Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares, Interest Shares and Warrant Shares will
increase in certain circumstances. The Company further acknowledges that its obligation to issue the Conversion Shares upon conversion
of the Notes in accordance with this Agreement and the Notes, the Interest Shares in accordance with this Agreement and the Notes
and the Warrant Shares upon exercise of the Warrants in accordance with this Agreement, the Notes and the Warrants is, absolute
and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders
of the Company.


 


(j)Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of
Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which
is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company and its board of
directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement
relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any of its
Subsidiaries.


 


(k)SEC Documents;
Financial Statements. Except as set forth on Schedule 3(k), during the two (2) years prior to the date hereof, the Company
has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and
financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to
as the “SEC Documents”). The Company has delivered or has made available to the Buyers or their respective representatives
true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the
SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the
SEC, 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. As of their
respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects with
applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the
time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently
applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto,
or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements)
and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments
which will not be material, either individually or in the aggregate). No other information provided by or on behalf of the Company
to any of the Buyers which is not included in the SEC Documents (including, without limitation, information referred to in Section
2(e) of this Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary in order
to make the statements therein not misleading, in the light of the circumstance under which they are or were made. The Company
is not currently contemplating to amend or restate any of the financial statements (including without limitation, any notes or
any letter of the independent accountants of the Company with respect thereto) included in the SEC Documents (the “Financial
Statements”), nor is the Company currently aware of facts or circumstances which would require the Company to amend or
restate any of the Financial Statements, in each case, in order for any of the Financials Statements to be in compliance with GAAP
and the rules and regulations of the SEC. The Company has not been informed by its independent accountants that they recommend
that the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate
any of the Financial Statements.


 






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(l)Absence of
Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form 10-K, there
has been no material adverse change and no material adverse development in the business, assets, liabilities, properties, operations
(including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries, except
as set forth in or contemplated by such Form 10-K or the Company’s Form 10-Q for the quarter ended September 30, 2012.
Since the date of the Company’s most recent audited financial statements contained in a Form 10-K, neither the Company nor
any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside
of the ordinary course of business or (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary
course of business. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law
or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or
any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy
proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries,
on a consolidated basis, after giving effect to the transactions contemplated hereby to occur at the Closing, will not be Insolvent
(as defined below). For purposes of this Section 3(l), “Insolvent” means, (I) with respect to the Company and
its Subsidiaries, on a consolidated basis, (i) the present fair saleable value of the Company’s and its Subsidiaries’
assets is less than the amount required to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined below),
(ii) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured or (iii) the Company and its Subsidiaries intend to incur or believe that
they will incur debts that would be beyond their ability to pay as such debts mature; and (II) with respect to the Company and
each Subsidiary, individually, (i) the present fair saleable value of the Company’s or such Subsidiary’s (as the case
may be) assets is less than the amount required to pay its respective total Indebtedness, (ii) the Company or such Subsidiary (as
the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured or (iii) the Company or such Subsidiary (as the case may be) intends to incur or believes
that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor any of
its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction,
for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital.


 






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(m)No Undisclosed
Events, Liabilities, Developments or Circumstances. 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, prospects, operations (including results thereof) or condition (financial or otherwise) (other than the
Closing of the Offering contemplated hereby), that (i) would be required to be disclosed by the Company as of the date hereof or
the Closing Date 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 reasonably be expected to have
a material adverse effect on any Buyer’s investment hereunder or (iii) could reasonably be expected to have a Material Adverse
Effect.


 


(n)Conduct of
Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default
under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of
preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation or
certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment,
decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither
the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for
possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality
of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and
has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the
Principal Market in the foreseeable future. Since January 1, 2010, (i) the Common Stock has been listed or designated for quotation
on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the
Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting
of the Common Stock from the Principal Market. The Company and each of its Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse
Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit.


 


(o)Foreign Corrupt
Practices. Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee or other Person acting
on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company or any
of its Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official
or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act
of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.


 






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(p)Sarbanes-Oxley
Act. The Company and each Subsidiary is in compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002 and
all applicable rules and regulations promulgated by the SEC thereunder.


 


(q)Transactions
With Affiliates. Except as set forth in the SEC Documents, none of the officers, directors, employees or affiliates of the
Company or any of its Subsidiaries is presently a party to any transaction with the Company or any of its Subsidiaries (other than
for ordinary course services as employees, officers or directors and immaterial transactions), 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, or otherwise requiring payments to or from any such officer, director, employee or affiliate, or, to the knowledge of the
Company or any of its Subsidiaries, any corporation, partnership, trust or other Person in which any such officer, director, or
employee has a substantial interest or is an employee, officer, director, trustee, affiliate or partner.


 


(r)Equity Capitalization.
As of the date hereof, the authorized capital stock of the Company consists of (i) 400,000,000 shares of Common Stock of which,
182,265,845 are issued and outstanding and 49,384,348 shares are reserved for issuance pursuant to securities (other than the Notes
and the Warrants) exercisable or exchangeable for, or convertible into, shares of Common Stock and (ii) 10,000,000 shares of preferred
stock, $0.001 par value, of which none are issued and outstanding. No shares of Common Stock are held in treasury. All of such
outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and nonassessable.
12,339,000 shares of the Company’s issued and outstanding Common Stock on the date hereof are owned by Persons who are
“affiliates” (as defined in Rule 405 of the 1933 Act and calculated based on the assumption that only officers, directors
and holders of at least 10% of the Company’s issued and outstanding Common Stock are “affiliates” without conceding
that any such Persons are “affiliates” for purposes of federal securities laws) of the Company or any of its Subsidiaries.
To the Company’s knowledge, no Person owns 10% or more of the Company’s issued and outstanding shares of Common Stock
(calculated based on the assumption that all Convertible Securities (as defined below), whether or not presently exercisable or
convertible, have been fully exercised or converted (as the case may be) taking account of any limitations on exercise
or conversion (including “blockers”) contained therein without conceding that such identified Person is a 10% stockholder
for purposes of federal securities laws). (i) None of the Company’s or any Subsidiary’s capital stock is subject
to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company or any Subsidiary;
(ii) except as set forth in the SEC Documents or on Schedule 3(r)(ii), there are no outstanding options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional capital stock of the Company
or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or
any of its Subsidiaries; (iii) except as set forth in the SEC Documents or on Schedule 3(r)(iii), there are no outstanding debt
securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness of
the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound; (iv) except as
set forth on Schedule 3(r)(iv), there are no financing statements securing obligations in any amounts filed in connection with
the Company or any of its Subsidiaries; (v) except as set forth on Schedule 3(r)(v), there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except
pursuant to the Registration Rights Agreement); (vi) except as set forth on Schedule 3(r)(vi), there are no outstanding securities
or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a
security of the Company or any of its Subsidiaries; (vii) except as set forth on Schedule 3(r)(vii), there are no securities or
instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; (viii) except
as set forth on Schedule 3(r)(viii), there are no securities that have been issued in a Variable Rate Transaction (as defined below)
on or prior to the Subscription Date, (ix) except as disclosed in the SEC Documents, neither the Company nor any Subsidiary has
any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and (x) neither
the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents which
are not so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company’s or its Subsidiaries’
respective businesses and which, individually or in the aggregate, do not or could not have a Material Adverse Effect. The Company
has furnished or has made available to the Buyers true, correct and complete copies of the Company’s Certificate of Incorporation,
as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s
bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all securities convertible
into, or exercisable or exchangeable for, shares of Common Stock and the material rights of the holders thereof in respect thereto.


 






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(s)Indebtedness
and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as set forth on Schedule 3(s), 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.


 






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(t)Absence of
Litigation. Except as set forth on Schedule 3(r), 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 1933 Act or the 1934 Act.


 


(u)Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or
applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable 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 at a cost that would not have a Material Adverse Effect.


 






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(v)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.
No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of
its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary
or otherwise terminate such officer’s employment with the Company or any such Subsidiary. No executive officer or other key
employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or
agreement or any restrictive covenant, and the continued employment of each such executive officer or other key employee (as the
case may be) 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 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.


 


(w)Title.
The Company and its Subsidiaries have good and marketable title in fee simple to all real property, and have good and marketable
title to all personal property, owned by them which is material to the business of the Company and its Subsidiaries, in each case,
free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real property
and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property
and buildings by the Company or any of its Subsidiaries.


 


(x)Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent rights, copyrights, original works, inventions, licenses,
approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and registrations
therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as now conducted
and as presently proposed to be conducted. Except as set forth on Schedule 3(v), none of the Company’s or its Subsidiaries’
Intellectual Property Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned,
within three years from the date of this Agreement. The Company has no knowledge of any infringement by the Company or any of its
Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the
knowledge of the Company or any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding
their Intellectual Property Rights. The Company is not aware of any facts or circumstances which might give rise to any of the
foregoing infringements or claims, actions or proceedings. The Company and each of its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights.


 






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(y)Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all Environmental Laws (as defined below), (ii) have received
all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing
clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.


 


(z)Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.


 


(aa)Tax Status.
Since January 1, 2010, 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.


 


(bb)Internal
Accounting and Disclosure Controls. The Company and each of its Subsidiaries maintains internal control over financial reporting
(as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles, including 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 generally
accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities
is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability
for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action
is taken with respect to any difference. The Company maintains disclosure controls and procedures (as such term is defined in Rule
13a-15(e) under the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified
in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the
Company’s management, including its principal executive officer or officers and its principal financial officer or officers,
as appropriate, to allow timely decisions regarding required disclosure. Neither the Company nor any of its Subsidiaries has received
any notice or correspondence from any accountant or other Person relating to any potential material weakness or significant deficiency
in any part of the internal controls over financial reporting of the Company or any of its Subsidiaries.


 






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(cc)Off Balance
Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries
and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings
and is not so disclosed or that otherwise could be reasonably expected to have a Material Adverse Effect.


 


(dd)Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment company,”
an affiliate of an “investment company,” a company controlled by an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter” for, an “investment company” as
such terms are defined in the Investment Company Act of 1940, as amended.


 


(ee)Acknowledgement
Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following the public disclosure
of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the Buyers have been
asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or
short) any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold
any of the Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which
any such Buyer is a party, directly or indirectly, presently may have a “short” position in the Common Stock which
was established prior to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; and (iii)
each Buyer shall not be deemed to have any affiliation with or control over any arm’s length counterparty in any “derivative”
transaction. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated
by the Transaction Documents pursuant to the 8-K Filings (as defined below) one or more Buyers may engage in hedging and/or trading
activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods
that the value and/or number of the Warrant Shares, the Interest Shares or Conversion Shares, as applicable, deliverable with respect
to the Securities are being determined and (b) such hedging and/or trading activities, if any, can reduce the value of the existing
stockholders’ equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted.
The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement,
the Notes, the Warrants or any other Transaction Document or any of the documents executed in connection herewith or therewith.


 






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(ff)Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their
behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company or any of its Subsidiaries 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 (other than the Placement
Agents), or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company or any of its Subsidiaries.


 


(gg)U.S. Real
Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any of the
Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section
897 of the Internal Revenue Code of 1986, as amended, and the Company and each Subsidiary shall so certify upon any Buyer’s
request.


 


(hh)Registration
Eligibility. The Company is eligible to register the Registrable Securities for resale by the Buyers using Form S-1 promulgated
under the 1933 Act.


 


(ii)Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be
paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.


 


(jj)Bank Holding
Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended
(the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any equity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any
of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that
is subject to the BHCA and to regulation by the Federal Reserve.


 


(kk)Illegal
or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of the
Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees,
agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which
the Company or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment,
contribution or gift of money, property, or services, whether or not in contravention of applicable law, (a) as a kickback or bribe
to any Person or (b) to any political organization, or the holder of or any aspirant to any elective or appointive public office
except for personal political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.


 






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(ll)Money Laundering.
The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of 2001 and all
other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the laws, regulations
and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited,
to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in
31 CFR, Subtitle B, Chapter V.


 


(mm)Management.
Except as set forth in Schedule 3(mm) hereto or as disclosed in the SEC Documents, during the past five (5) year period,
no current officer or director or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the
Company or any of its Subsidiaries has been the subject of:


 


(i)a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such person was an executive
officer at or within two years before the time of the filing of such petition or such appointment;


 


(ii)a
conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not
relate to driving while intoxicated or driving under the influence);


 


(iii)any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:


 


(1)Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;


 


(2)Engaging
in any type of business practice; or


 


(3)Engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;


 


(iv)any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than 60 days the right of any such person to engage in any activity described in the preceding sub paragraph, or to be
associated with persons engaged in any such activity;


 






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(v)a
finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or


 


(vi)a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.


 


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


 


(oo)Public Utility
Holding Act. None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.


 


(pp)Federal
Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility” under
the Federal Power Act, as amended.


 


(qq)Ranking
of Notes. Except as set forth on Schedule 3(aa), no Indebtedness of the Company, at the Closing, will be senior to, or pari
passu with, the Notes in right of payment, whether with respect to payment or redemptions, interest, damages, upon liquidation
or dissolution or otherwise.


 


(rr)Disclosure.
Except as disclosed in the 8-K Filing, the Company confirms that neither it nor any other Person acting on its behalf has provided
any of the Buyers or their agents or counsel with any information that constitutes or could reasonably be expected to constitute
material, non-public information concerning 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 Buyers
will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the
Buyers 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. Each press release issued by the Company or any of
its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release 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 the light of the circumstances under which they are 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 Buyer makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in Section 2.


 






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4.COVENANTS.


 


(a)Best Efforts.
Each Buyer shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 6 of
this Agreement. The Company shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided
in Section 7 of this Agreement.


 


(b)Form D and
Blue Sky. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof to each Buyer promptly after such filing. 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 being sold
at the Closing for sale to the Buyers 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 Buyers 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 Buyers.


 


(c)Reporting
Status. Until the date on which the Buyers shall have sold all of the Registrable Securities (the “Reporting Period”),
the Company shall use reasonable best efforts to timely file all reports required to be filed with the SEC pursuant to the 1934
Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act
or the rules and regulations thereunder would no longer require or otherwise permit such termination. From the time Form S-3 is
available to the Company for the registration of the Registrable Securities, the Company shall use reasonable best efforts to take
all actions necessary to maintain its eligibility to register the Registrable Securities for resale by the Buyers on Form S-3.


 


(d)Use of Proceeds.
The Company will use the proceeds from the sale of the Securities as set forth on Schedule 4(d) attached hereto and for
general corporate purposes and except as set forth on Schedule 4(d) attached hereto, and not for (i) the repayment
of any outstanding Indebtedness of the Company or any of its Subsidiaries, (ii) redemption or repurchase of any securities of the
Company or any of its Subsidiaries or (iii) the settlement of any outstanding litigation.


 






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(e)Financial
Information. The Company agrees to send the following to each Investor (as defined in the Registration Rights Agreement) during
the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the
EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments
filed pursuant to the 1933 Act, (ii) unless the following are either filed with the SEC through EDGAR or are otherwise widely disseminated
via a recognized new release service (such as PR Newswire), on the same day as the release thereof, facsimile copies of all press
releases issued by the Company or any of its Subsidiaries and (iii) unless the following are filed with the SEC through EDGAR,
copies of any notices and other information made available or given to the stockholders of the Company generally, contemporaneously
with the making available or giving thereof to the stockholders..


 


(f)Listing.
The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Registrable Securities
upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed or designated
for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation for
quotation (as the case may be) of all Registrable Securities from time to time issuable under the terms of the Transaction Documents
on such national securities exchange or automated quotation system. The Company shall use reasonable best efforts to maintain the
Common Stock’s listing or authorization for quotation (as the case may be) on the Principal Market, The New York Stock Exchange,
the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Select Market or the Nasdaq Global Market (each, an “Eligible
Market”). Neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected to
result in the delisting or suspension of the Common Stock on an Eligible Market. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(f).


 


(g)Fees.
The Company shall reimburse the lead Buyer for all reasonable costs and expenses incurred by it or its affiliates in connection
with the transactions contemplated by the Transaction Documents (including, without limitation, all reasonable legal fees and disbursements
of Greenberg Traurig, LLP, counsel to the lead Buyer, in connection therewith, documentation and implementation of the transactions
contemplated by the Transaction Documents and due diligence and regulatory filings in connection therewith) (the “Expense
Amount”), which amount shall not exceed $50,000 without the consent of the Company and shall be withheld by the lead
Buyer (at the request of Greenberg Traurig, LLP) from its Purchase Price at the Closing or paid by the Company upon termination
of this Agreement on demand by Greenberg Traurig, LLP so long as such termination did not occur as a result of a material breach
by the lead investor of any of its obligations hereunder (as the case may be) less $15,000, which was previously advanced to the
lead Buyer by the Company. Subject to the limitation set forth in the immediately preceding sentence, if the amount so withheld
at the Closing by the lead Buyer was less than the Expense Amount actually incurred by the lead Buyer and/or Greenberg Traurig,
LLP, as applicable, in connection with the transactions contemplated by the Transaction Documents, the Company shall promptly reimburse
the lead Buyer and/or Greenberg Traurig, LLP, as applicable, on demand for such Expense Amount not so reimbursed by the Company
on the date hereof or through such withholding at the Closing. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, transfer agent fees, DTC (as defined below) fees or broker’s commissions (other
than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby (including, without limitation,
any fees payable to the Placement Agents, who are the Company’s sole placement agents in connection with the transactions
contemplated by this Agreement). The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating
to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own
expenses in connection with the sale of the Securities to each Buyer.


 






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(h)Pledge of
Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that
the Securities may be pledged by a Buyer in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees to execute
and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities
to such pledgee by a Buyer.


 


(i)Disclosure
of Transactions and Other Material Information. The Company shall, on or before 8:30 a.m., New York time, on the first
(1st) Business Day after the date of this Agreement, issue a press release (the “Press Release”) reasonably
acceptable to the Buyers disclosing all the material terms of the transactions contemplated by the Transaction Documents. On or
before 8:30 a.m., New York time, on the first (1st) Business Day after the date of this Agreement, the Company shall file a Current
Report on Form 8-K describing all the material terms of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement, the
form of Notes, the form of the Warrants and the form of the Registration Rights Agreement) (including all attachments, the “8-K
Filing”). From and after the filing of the 8-K Filing, the Company shall have disclosed all material, non-public information
(if any) provided to any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers, directors,
employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company shall not, and the
Company shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees and agents not
to, provide any Buyer with any material, non-public information regarding the Company or any of its Subsidiaries from and after
the issuance of the Press Release without the express prior written consent of such Buyer. In the event of a breach of any of the
foregoing covenants, including, without limitation, Section 4(o) of this Agreement, or any of the covenants or agreements contained
in any other Transaction Document, by the Company, any of its Subsidiaries, or any of its or their respective officers, directors,
employees and agents (as determined in the reasonable good faith judgment of such Buyer), in addition to any other remedy provided
herein or in the Transaction Documents, such Buyer shall have the right to make a public disclosure, in the form of a press release,
public advertisement or otherwise, of such breach or such material, non-public information, as applicable, without the prior approval
by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees or agents. No Buyer shall
have any liability to the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees, stockholders
or agents, for any such disclosure. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any
press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the Company
shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to
such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by
applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection
with any such press release or other public disclosure prior to its release). Without the prior written consent of the applicable
Buyer, the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Buyer in
any filing, announcement, release or otherwise. Notwithstanding anything contained in this Agreement to the contrary and without
implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees that no Buyer has had, and
no Buyer shall have (unless expressly agreed to by a particular Buyer after the date hereof in a written definitive and binding
agreement executed by the Company and such particular Buyer (it being understood and agreed that no Buyer may bind any other Buyer
with respect thereto)), any duty of confidentiality with respect to, or a duty not to trade on the basis of, any information regarding
the Company or any of its Subsidiaries.


 






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(j)Additional
Registration Statements. Until the Applicable Date (as defined below) and at any time thereafter while any Registration Statement
is not effective or the prospectus contained therein is not available for use, the Company shall not file a registration statement
under the 1933 Act relating to securities that are not the Registrable Securities. “Applicable Date” means the
later of (i) the first date on which the resale by the Buyers of all Registrable Securities is covered by one or more effective
Registration Statements (as defined in the Registration Rights Agreement) (and each prospectus contained therein is available for
use on such date) and (ii) the first anniversary of the Closing Date (or, if a Current Public Information Failure (as defined in
the Registration Rights Agreement) has occurred and is continuing, such later date after which the Company has cured such Current
Public Information Failure).


 


(k)Additional
Issuance of Securities. So long as any Buyer beneficially owns any Securities, the Company will not, without the prior written
consent of the Required Holders, issue any Notes (other than to the Buyers as contemplated hereby) and the Company shall not issue
any other securities that would cause a breach or default under the Notes or the Warrants. The Company agrees that for the period
commencing on the date hereof and ending on the date immediately following the sixty (60) calendar day anniversary of the Applicable
Date (provided that such period shall be extended by the number of calendar days during such period and any extension thereof contemplated
by this proviso on which any Registration Statement is not effective or any prospectus contained therein is not available for use
or any Current Public Information Failure exists) (the “Restricted Period”), neither the Company nor any of
its Subsidiaries shall directly or indirectly issue, offer, sell, grant any option or right to purchase, or otherwise dispose of
(or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or
any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined
under Rule 405 promulgated under the 1933 Act), any Convertible Securities (as defined below), any debt, any preferred stock or
any purchase rights) (any such issuance, offer, sale, grant, disposition or announcement (whether occurring during the Restricted
Period or at any time thereafter) is referred to as a “Subsequent Placement”). Notwithstanding the foregoing,
this Section 4(k) shall not apply in respect of the issuance of (A) shares of Common Stock options to purchase Common Stock or
other equity incentive awards to directors, officers or consultants, endorsers or employees of the Company in their capacity as
such pursuant to an Approved Stock Plan (as defined below), provided that (1) all such issuances (taking into account the shares
of Common Stock issuable upon exercise of such options) after the date hereof pursuant to this clause (A) do not, in the aggregate,
exceed more than 15% of the Common Stock issued and outstanding immediately prior to the date hereof and (2) the exercise price
of any such options is not lowered after issuance by subsequent amendment thereof, none of such options are amended subsequent
to issuance to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are subsequent
to issuance otherwise materially changed in any manner that adversely affects any of the Buyers; (B) shares of Common Stock
issued upon the conversion or exercise of Convertible Securities (other than options to purchase Common Stock or other equity incentive
awards issued pursuant to an Approved Stock Plan that are covered by clause (A) above) issued prior to the date hereof, provided
that the conversion price of any such Convertible Securities (other than options to purchase Common Stock issued pursuant to an
Approved Stock Plan that are covered by clause (A) above) is not lowered by subsequent amendment, none of such Convertible Securities
(other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) are
subsequently amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible
Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A)
above) are otherwise materially changed in any manner that adversely affects any of the Buyers; (C) the Conversion Shares, (D)
the Interest Shares, (E) the Warrant Shares and (F) any securities issued in connection with strategic alliances, acquisitions,
mergers, and strategic partnerships, provided, that (1) the primary purpose of such issuance is not to raise capital as determined
in good faith by the Company’s board of directors, (2) the purchaser or acquirer of the securities in such issuance solely
consists of either (x) the actual participants in such strategic alliance or strategic partnership, (y) the actual owners of such
assets or securities acquired in such acquisition or merger or (z) the stockholders, partners or members of the foregoing Persons
and (3) the number or amount of securities issued to such Person by the Company shall not be disproportionate to either (x) the
fair market value of such Person’s actual contribution to such strategic alliance or strategic partnership or (y) the proportional
ownership of such assets or securities to be acquired by the Company, as applicable (each of the foregoing in clauses (A) through
(F), collectively the “Excluded Securities”), (G) the Permitted Purchase Money Warrants (as defined in the Notes)
and (H) any other securities issued in connection with strategic alliances, acquisitions, mergers, and strategic partnerships.
“Approved Stock Plan” means any benefit plan which has been approved by the board of directors of the Company
prior to or subsequent to the date hereof pursuant to which shares of Common Stock, options to purchase Common Stock and other
equity incentive awards may be issued to any employee, officer, director, consultant or endorser for services provided to the Company
in their capacity as such. “Convertible Securities” means any capital stock or other security of the Company
or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible into, exercisable
or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security of the Company
(including, without limitation, Common Stock) or any of its Subsidiaries.


 






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(l)Reservation
of Shares. So long as any Notes or Warrants remain outstanding, the Company shall take all action necessary to at all times
have authorized, and reserved for the purpose of issuance, no less than (i) 130% of the maximum number of shares of Common Stock
issuable upon conversion of all the Notes then outstanding (assuming for purposes hereof, that the Notes are convertible at the
Conversion Price (as defined in the Notes) and without regard to any limitations on the conversion of the Notes set forth therein),
and (ii) 130% of the maximum number of Interest Shares issuable pursuant to the terms of the Notes then outstanding from the Closing
Date through the thirty-six month anniversary of the Closing Date (determined as if issued on the Trading Day immediately preceding
the Closing Date without taking into account any limitations on the issuance of securities set forth in the Notes) and (iii) the
maximum number of Warrant Shares issuable upon exercise of all the Warrants then outstanding (without regard to any limitations
on the exercise of the Warrants set forth therein).


 


(m)Conduct of
Business. While any of the Notes or Warrants remain outstanding, the business of the Company and its Subsidiaries shall not
be conducted in violation of any law, ordinance or regulation of any Governmental Entity, except where such violations would not
result, either individually or in the aggregate, in a Material Adverse Effect.


 


(n)Variable
Securities. Until all of the Registrable Securities have been sold by the Buyers, the Company and each Subsidiary shall be
prohibited from effecting or entering into an agreement to effect any Subsequent Placement involving a Variable Rate Transaction.
“Variable Rate Transaction” means a transaction in which the Company or any Subsidiary (i) issues or sells any
Convertible Securities either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with
the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such Convertible Securities,
or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance
of such Convertible Securities or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Stock, other than pursuant to customary anti-dilution provisions or (ii) enters into
any agreement (including, without limitation, an equity line of credit) whereby the Company or any Subsidiary may sell securities
at a future determined price (other than customary “preemptive” or “participation” rights). Each Buyer
shall be entitled to obtain injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which remedy
shall be in addition to any right to collect damages.


 






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(o)Participation
Right. From the date hereof through the first anniversary of the Closing Date, neither the Company nor any of its Subsidiaries
shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this Section 4(o).
The Company acknowledges and agrees that the right set forth in this Section 4(o) is a right granted by the Company, separately,
to each Buyer.


 


(i)At
least three (3) Trading Days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer a
written notice of its proposal or intention to effect a Subsequent Placement (each such notice, a “Pre-Notice”),
which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than:
(i) a statement that the Company desires to provide such Buyer with material, non-public information, or, if permissable hereunder,
a statement that the Company proposes or intends to effect a Subsequent Placement, (ii) a statement that the statement in clause
(i) above does not constitute material, non-public information and (iii) a statement informing such Buyer that it is entitled to
receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written
request of a Buyer within three (3) Trading Days after the Company’s delivery to such Buyer of such Pre-Notice, and only
upon a written request by such Buyer, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver
to such Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale
or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a
Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price and other
terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold
or exchanged, (y) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold
or exchanged and (z) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer such Buyer’s
pro rata portion of 50% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the
right to subscribe for under this Section 4(o) shall be (a) based on such Buyer’s pro rata portion of the aggregate original
principal amount of the Notes purchased hereunder by all Buyers (the “Basic Amount”), and (b) with respect to
each Buyer that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic
Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than
their Basic Amounts (the “Undersubscription Amount”).


 






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(ii)To
accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the third (3rd)
Business Day after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion
of such Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic
Amount, the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “Notice of Acceptance”).
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then such Buyer who has
set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed
for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), such Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total Basic Amounts
of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably
necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer in any
material respect prior to the expiration of the Offer Period, the Company may deliver to each Buyer a new Offer Notice and the
Offer Period shall expire on the third (3rd) Business Day after such Buyer’s receipt of such new Offer Notice.


 






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(iii)The
Company shall have five (5) Business Days from the expiration of the Offer Period above (i) to offer, issue, sell or exchange all
or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused
Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only
to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without
limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to
the Company than those set forth in the Offer Notice in any material respect and (ii) to publicly announce (a) the execution of
such Subsequent Placement Agreement, and (b) either (x) the consummation of the transactions contemplated by such Subsequent Placement
Agreement or (y) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Current Report
on Form 8-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.


 


(iv)In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 4(o)(iii) above), then such Buyer may, at its sole option and in its sole discretion, reduce the number
or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or
amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(o)(ii) above multiplied by a fraction,
(i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or
exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(o) prior to such reduction) and
(ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to
reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange
more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the
Buyers in accordance with Section 4(o)(i) above.


 


(v)Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from
the Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance.
The purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the
Company and such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and
substance to such Buyer and its counsel.


 


(vi)Any
Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(o) may not be issued, sold or exchanged
until they are again offered to such Buyer under the procedures specified in this Agreement.


 


(vii)The
Company and each Buyer agree that if any Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with
respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”)
shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities
of the Company 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, any agreement previously entered into with the Company or any instrument received from the Company.


 






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(viii)Notwithstanding
anything to the contrary in this Section 4(o) and unless otherwise agreed to by such Buyer, the Company shall either confirm in
writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession
of any material, non-public information, by the fifth (5th) Business Day following delivery of the Offer Notice. If by such fifth
(5th) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice
regarding the abandonment of such transaction has been received by such Buyer, such transaction shall be deemed to have been abandoned
and such Buyer shall not be deemed to be in possession of any material, non-public information with respect to the Company or any
of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall
provide such Buyer with another Offer Notice and such Buyer will again have the right of participation set forth in this Section
4(o). The Company shall not be permitted to deliver more than one such Offer Notice to such Buyer in any sixty (60) day period,
except as expressly contemplated by the last sentence of Section 4(o)(ii).


 


(ix)The
restrictions contained in this Section 4(o) shall not apply in connection with the issuance of any Excluded Securities or the Permitted
Purchase Money Warrants. The Company shall not circumvent the provisions of this Section 4(o) by providing terms or conditions
to one Buyer that are not provided to all.


 


(p)Dilutive
Issuances. For so long as any Notes or Warrants remain outstanding, the Company shall not, in any manner, enter into or affect
any Dilutive Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is to cause the Company to be required
to issue upon conversion of any Notes or exercise of any Warrant any shares of Common Stock in excess of that number of shares
of Common Stock which the Company may issue upon conversion of the Notes and exercise of the Warrants without breaching the Company’s
obligations under the rules or regulations of the Principal Market.


 


(q)Passive Foreign
Investment Company. The Company shall conduct its business in such a manner as will ensure that the Company will not be deemed
to constitute a passive foreign investment company within the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986,
as amended.


 


(r)Restriction
on Redemption and Cash Dividends. Except as set forth on Schedule 4(r), so long as any Notes are outstanding, the Company
shall not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the Company
without the prior express written consent of the Required Holders.


 


(s)Corporate
Existence. So long as any Buyer beneficially owns any Notes or Warrants, the Company shall not be party to any Fundamental
Transaction (as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Notes and the Warrants.


 






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(t)10b-5 Plans.
So long as any Notes remain outstanding, the Company shall not, directly or indirectly, (and shall not permit any of its officers,
directors or employees, directly or indirectly) to establish any 10b-5 plan (or permit any similar transaction) at any time after
the date hereof, unless (x) any such plan is established after the end of the Restricted Period and (y) the trigger on sales under
any such plan is no less than $0.40 per share of Common Stock for a sixty (60) day period after the expiration of the Restricted
Period (as adjusted for stock splits, stock dividends, recapitalizations and similar events).


 


(u)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 Buyers in order to exercise the Warrants or convert
the Notes. Except as provided in Section 5(d), no additional legal opinion, other information or instructions shall be required
of the Buyers to exercise their Warrants or convert their Notes. The Company shall honor exercises of the Warrants and conversions
of the Notes and shall deliver the Conversion Shares, Interest Shares and Warrant Shares in accordance with the terms, conditions
and time periods set forth in the Notes and Warrants.


 


(v)No Waiver
of Lock-Up Agreements. The Company shall not amend, waive or modify any provision of any of the Lock-Up Agreements (as defined
below).


 


(w)Closing Documents.
On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered, to
each Buyer and Greenberg Traurig, LLP executed copies of the Transaction Documents, Securities and other document required to be
delivered to any party pursuant to Section 7 hereof.


 


5.REGISTER;
TRANSFER AGENT INSTRUCTIONS; LEGEND.


 


(a)Register.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Notes and the Warrants in which the Company shall record the name and
address of the Person in whose name the Notes and the Warrants have been issued (including the name and address of each transferee),
the principal amount of the Notes held by such Person, the number of Conversion Shares issuable upon conversion of the Notes, the
number of Interest Shares issuable with respect to the Notes and the number of Warrant Shares issuable upon exercise of the Warrants
held by such Person. The Company shall keep the register open and available at all times during business hours for inspection of
any Buyer or its legal representatives upon reasonable prior notice.


 






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(b)Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer agent
in a form acceptable to each of the Buyers (the “Irrevocable Transfer Agent Instructions”) to issue certificates
or credit shares to the applicable balance accounts at The Depository Trust Company (“DTC”), registered in the
name of each Buyer or its respective nominee(s), for the Conversion Shares, the Interest Shares and the Warrant Shares in such
amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes or the exercise of the Warrants
(as the case may be). The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company
to its transfer agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books
and records of the Company, as applicable, to the extent provided in this Agreement and the other Transaction Documents. If a Buyer
effects a sale, assignment or transfer of the Securities in accordance with Section 2(g), the Company shall permit the transfer
and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts
at DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment. In the event
that such sale, assignment or transfer involves Conversion Shares, Interest Shares or Warrant Shares sold, assigned or transferred
pursuant to an effective registration statement or in compliance with Rule 144, the transfer agent shall issue such shares to such
Buyer, assignee or transferee (as the case may be) without any restrictive legend in accordance with Section 5(d) below. The Company
acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in
addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any bond or other security being required. The Company
shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Company’s
transfer agent on each Effective Date (as defined in the Registration Rights Agreement). Any fees (with respect to the transfer
agent, counsel to the Company or otherwise) associated with the issuance of such opinion or the removal of any legends on any of
the Securities shall be borne by the Company.


 


(c)Legends.
Each Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares, the Interest
Shares and the Warrant Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable state
securities laws, and except as set forth below, the Securities shall bear any legend as required by the “blue sky”
laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against
transfer of such stock certificates):


 


[NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] 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.


 






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(d)Removal of
Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c) above or
any other legend (i) while a registration statement (including a Registration Statement) covering the resale of such Securities
is effective under the 1933 Act, (ii) following any sale of such Securities pursuant to Rule 144 (assuming neither the transferor
nor the transferee is an affiliate of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred under
Rule 144 (provided that a Buyer 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 Buyer’s counsel), (iv) in connection with a sale, assignment
or other transfer (other than under Rule 144), provided that such Buyer provides the Company with an opinion of counsel to such
Buyer, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without
registration under the applicable requirements of the 1933 Act or (v) if such legend is not required under applicable requirements
of the 1933 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 two (2) Trading Days following the delivery
by a Buyer 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 such Buyer as may be required above in this Section 5(d), as
directed by such Buyer, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated
Securities Transfer Program and such Securities are Conversion Shares, Interest Shares or Warrant Shares, credit the aggregate
number of shares of Common Stock to which such Buyer shall be entitled to such Buyer’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 such Buyer, a certificate
representing such Securities that is free from all restrictive and other legends, registered in the name of such Buyer or its designee
(the date by which such credit is so required to be made to the balance account of such Buyer’s or such Buyer’s nominee
with DTC or such certificate is required to be delivered to such Buyer pursuant to the foregoing is referred to herein as the “Required
Delivery Date”). 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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(e)Failure to
Timely Deliver; Buy-In. If the Company fails to (i) issue and deliver (or cause to be delivered) to a Buyer by the Required
Delivery Date a certificate representing the Securities so delivered to the Company by such Buyer that is free from all restrictive
and other legends or (ii) credit the balance account of such Buyer’s or such Buyer’s nominee with DTC for such number
of Conversion Shares or Warrant Shares so delivered to the Company, and if on or after the Required Delivery Date such Buyer (or
any other Person in respect, or on behalf, of such Buyer) purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by such Buyer of all or any portion of the number of shares of Common Stock, or a sale
of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, that such Buyer so anticipated
receiving from the Company without any restrictive legend, then, in addition to all other remedies available to such Buyer, the
Company shall, within three (3) Trading Days after such Buyer’s request and in such Buyer’s sole discretion, either
(i) pay cash to such Buyer in an amount equal to such Buyer’s total purchase price (including brokerage commissions and other
out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket
expenses, if any) (the “Buy-In Price”), at which point the Company’s obligation to so deliver such certificate
or credit such Buyer’s balance account shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation
to so deliver to such Buyer a certificate or certificates or credit such Buyer’s DTC account representing such number of
shares of Common Stock that would have been so delivered if the Company timely complied with its obligations hereunder and pay
cash to such Buyer in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares
of Conversion Shares or Warrant Shares (as the case may be) that the Company was required to deliver to such Buyer by the Required
Delivery Date multiplied by (B) the lowest Closing Sale Price (as defined in the Warrants) of the Common Stock on any Trading Day
during the period commencing on the date of the delivery by such Buyer to the Company of the applicable Conversion Shares or Warrant
Shares (as the case may be) and ending on the date of such delivery and payment under this clause (ii).


 


6.CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.


 


(a)The obligation
of the Company hereunder to issue and sell the Notes and the related Warrants to each Buyer at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice
thereof:


 


(i)Such
Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.


 


(ii)Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of the lead Buyer, the amounts
withheld by such Buyer pursuant to Section 4(g)) for the Note and the related Warrants being purchased by such Buyer at the Closing
by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.


 


(iii)The
representations and warranties of such Buyer shall be true and correct in all material respects (other than representations and
warranties that are already qualified by materiality or material adverse effect which shall be true and correct in all respects)
as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct as of such specific date), and such Buyer shall have performed,
satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by such Buyer at or prior to the Closing Date.


 






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7.CONDITIONS
TO EACH BUYER’S OBLIGATION TO PURCHASE.


 


(a)The obligation
of each Buyer hereunder to purchase its Note and its related Warrants at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and
may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:


 


(i)The
Company and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer each of the Transaction Documents
to which it is a party and the Company shall have duly executed and delivered to such Buyer either (x) a Series A Note (in such
original principal amount as is set forth across from such Buyer’s name in column (3) of the Schedule of Buyers) or (y) Series
B Note (in such original principal amount as is set forth across from such Buyer’s name in column (4) of the Schedule of
Buyers), together with, in each case, the related Series A Warrants and Series B Warrants (initially for such aggregate number
of shares of Warrant Shares as is set forth across from such Buyer’s name in columns (5) and (6) of the Schedule of Buyers,
respectively) being purchased by such Buyer at the Closing pursuant to this Agreement.


 


(ii)If
any Series B Notes are to be sold to any Buyer at the Closing, each other Buyer shall have executed and delivered the Subordination
Agreement to the Company and such Buyer.


 


(iii)Such
Buyer shall have received the opinion of Roetzel & Andress, the Company’s counsel, dated as of the Closing Date, in the
form reasonably acceptable to such Buyer.


 


(iv)The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such
Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.


 


(v)The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Nevada Secretary
of State within ten (10) days of the Closing Date.


 


(vi)The
Company shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of the
Company and dated as of the Closing Date, as to (I) the resolutions consistent with Section 3(b) as adopted by the Company’s
board of directors in a form reasonably acceptable to such Buyer, (II) the Certificate of Incorporation of the Company and (III)
the Bylaws of the Company, each as in effect at the Closing.


 


(vii)Each
and every representation and warranty of the Company shall be true and correct in all material respects (other than representations
and warranties that are already qualified by materiality or Material Adverse Effect which shall be true and correct in all respects)
as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements and conditions required to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. Such Buyer shall have received a certificate, duly executed by
the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters
as may be reasonably requested by such Buyer in the form acceptable to such Buyer.


 






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(viii)The
Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of
Common Stock outstanding on the Closing Date immediately prior to the Closing.


 


(ix)The
Common Stock (I) shall be designated for quotation or listed (as applicable) on the Principal Market and (II) shall not have been
suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension
by the SEC or the Principal Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal
Market or (B) by falling below the minimum maintenance requirements of the Principal Market.


 


(x)The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities, including without limitation, those required by the Principal Market.


 


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


 


(xii)Since
the date of execution of this Agreement, no event or series of events shall have occurred that has or reasonably could be expected
to have a Material Adverse Effect.


 


(xiii)The
Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Conversion
Shares and the Warrant Shares.


 


(xiv)The
Company shall have duly executed and delivered to such Buyer the lock-up agreements, each in the form of Exhibit F
hereof (the “Lock-Up Agreements”), by and between the Company and each of the stockholders of the Company listed
on Schedule 7(a)(xiv), which in the aggregate beneficially own 26,916,948 shares of Common Stock outstanding immediately
prior to the Closing Date (the “Principal Stockholders”) and the Principal Stockholders shall have duly executed
and delivered to such Buyer the Lock-Up Agreement.


 


(xv)Such
Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company,
setting forth the wire transfer instructions of the Company.


 






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8.TERMINATION.


 


In the event that the
Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall have the
right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business on
such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under
this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been
consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and
purchase of the Notes and the Warrants shall be applicable only to such Buyer providing such written notice, provided further that
no such termination shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described
in Section 4(g) above. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach
by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party
to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.


 


9.MISCELLANEOUS.


 


(a)Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State 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, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. 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 to such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed
or operate to preclude any Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction
to collect on the Company’s obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.


 


(b)Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that
any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page 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 signature page were an original thereof.


 






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(c)Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.


 


(d)Severability;
Maximum Payment Amounts.. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or
unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable
shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
Notwithstanding anything to the contrary contained in this Agreement or any other Transaction Document (and without implication
that the following is required or applicable), it is the intention of the parties that in no event shall amounts and value paid
by the Company and/or any of its Subsidiaries (as the case may be), or payable to or received by any of the Buyers, under the Transaction
Documents (including without limitation, any amounts that would be characterized as “interest” under applicable law)
exceed amounts permitted under any applicable law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection
by any Buyer pursuant the Transaction Documents is finally judicially determined to be contrary to any such applicable law, such
obligation to pay, payment or collection shall be deemed to have been made by mutual mistake of such Buyer, the Company and its
Subsidiaries and such amount shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest,
as the case may be, as would not be so prohibited by the applicable law. Such adjustment shall be effected, to the extent necessary,
by reducing or refunding, at the option of such Buyer, the amount of interest or any other amounts which would constitute unlawful
amounts required to be paid or actually paid to such Buyer under the Transaction Documents. For greater certainty, to the extent
that any interest, charges, fees, expenses or other amounts required to be paid to or received by such Buyer under any of the Transaction
Documents or related thereto are held to be within the meaning of “interest” or another applicable term to otherwise
be violative of applicable law, such amounts shall be pro-rated over the period of time to which they relate.


 






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(e)Entire Agreement;
Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto and
the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the Company,
its Subsidiaries, their affiliates and Persons acting on their behalf solely with respect to the matters contained herein and therein,
and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein
and therein; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed
to) (i) have any effect on any agreements any Buyer has entered into with, or any instruments any Buyer has received from, the
Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Buyer in the Company
or (ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries, or any rights of
or benefits to any Buyer or any other Person, in any agreement entered into prior to the date hereof between or among the Company
and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer received from the Company and/or any of its Subsidiaries
prior to the date hereof, and all such agreements and instruments shall continue in full force and effect. Except as specifically
set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may
be amended other than by an instrument in writing signed by the Company and the Required Holders (as defined below), and any amendment
to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and
holders of Securities, as applicable, provided that no such amendment shall be effective to the extent that it (1) applies to less
than all of the holders of the Securities then outstanding or (2) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No waiver shall be
effective unless it is in writing and signed by an authorized representative of the waiving party, provided that the Required Holders
may waive any provision of this Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions
of this Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that no such waiver shall
be effective to the extent that it (1) applies to less than all of the holders of the Securities then outstanding (unless a party
gives a waiver as to itself only) or (2) imposes any obligation or liability on any Buyer without such Buyer’s prior written
consent (which may be granted or withheld in such Buyer’s sole discretion). No consideration shall be offered or paid to
any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same
consideration also is offered to all of the parties to the Transaction Documents, all holders of the Notes or all holders of the
Warrants (as the case may be). The Company has not, directly or indirectly, made any agreements with any Buyers relating to the
terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents.
Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment
or promise or has any other obligation to provide any financing to the Company, any Subsidiary or otherwise. As a material inducement
for each Buyer to enter into this Agreement, the Company expressly acknowledges and agrees that (i) no due diligence or other investigation
or inquiry conducted by a Buyer, any of its advisors or any of its representatives shall affect such Buyer’s right to rely
on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained
in this Agreement or any other Transaction Document and (ii) unless a provision of this Agreement or any other Transaction Document
is expressly preceded by the phrase “except as disclosed in the SEC Documents,” nothing contained in any of the SEC
Documents shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any
of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document. “Required
Holders” means (i) prior to the Closing Date, each Buyer entitled to purchase Notes at the Closing and (ii) on or after
the Closing Date, holders of a majority of the Registrable Securities as of such time (excluding any Registrable Securities held
by the Company or any of its Subsidiaries as of such time) issued or issuable hereunder or pursuant to the Notes and/or the Warrants
(or the Buyers, with respect to any waiver or amendment of Section 4(o)); provided, that such majority must include Hudson Bay
Master Fund Ltd (to the extent Hudson Bay Master Fund Ltd holds any Notes, Warrants or Registrable Securities as of such time).


 






    	38



    	 



    
 


(f)Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, if delivered personally; (ii) when sent, if sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party);
(iii) when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the
sending party and the sending party does not receive an automatically generated message from the recipient’s e-mail server
that such e-mail could not be delivered to such recipient) and (iv) if sent by overnight courier service, one (1) Business Day
after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party
to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:


 


	 	If to the Company:	 	
        Fuse Science, Inc.

        6135 NW 167th Street

        #E21

        Miami Lakes, Florida 33015

        Phone No.: (305) 503-3873

        Facsimile: (305) 819-0900

        Attention: Chief Executive Officer

	 	 	 	 
	 	With a copy (for informational purposes only) to:	 	
        Roetzel & Andress, LPA

        350 E. Las Olas Boulevard

        Suite #1150

        Fort Lauderdale, Florida 33301

        Phone No.: (954) 759-2721

        Facsimile: (954) 462-4260

        Attention: Dale A. Bergman, Esq.




 






    	39



    	 



    



 


	 	and	 	 
	 	 	 	 
	 		 	
        Boyd & Jenerette

        801 Brickell Ave

        Suite #1440

        Miami, Florida 33131

        Phone No.: (305) 537-9120

        Facsimile: (305) 537-9130

        Attention: Jorge Gutierrez, Esq.

	 	 	 	 
	 	If
to the Transfer Agent:	 	
        Securities Transfer Corporation

        Issuances/Lost Securities

        2591 Dallas Parkway

        Suite #102

        Frisco, Texas 75034

        

        Phone No.: (469) 633-0101 x109

        Facsimile: (469) 633-0088

        Attention: Christina Shelton



 


If to a Buyer, to its address, facsimile
number or e-mail address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on
the Schedule of Buyers,


 


	 	With a copy (for informational purposes only) to: 	 	
        Greenberg Traurig, LLP

        MetLife Building

        200 Park Avenue

        New York, New York 10166

        Telephone: (212) 801-9200

        Facsimile: (212) 805-9222

        Attention: Michael A. Adelstein, Esq.



 


or to such other address, facsimile number
or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change, provided that Greenberg Traurig, LLP shall only be provided
copies of notices sent to the lead Buyer. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver
or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time,
date and recipient facsimile number or (C) provided by an overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iv) above, respectively.
A copy of the e-mail transmission containing the time, date and recipient e-mail address shall be rebuttable evidence of receipt
by e-mail in accordance with clause (iii) above.


 






    	40



    	 



    
 


(g)Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including any assignee of any of the Securities (but only with respect to an assignee of such Securities to the extent
a Buyer has executed a written assignment of rights hereunder with respect thereto). The Company shall not assign this Agreement
or its rights and obligations hereunder without the prior written consent of the Required Holders, including, without limitation,
by way of a Fundamental Transaction (as defined in the Warrants) (unless the Company is in compliance with the applicable provisions
governing Fundamental Transactions set forth in the Warrants) or a Fundamental Transaction (as defined in the Notes) (unless the
Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes). A Buyer may
assign some or all of its rights hereunder in connection with any transfer of any of its Securities without the consent of the
Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.


 


(h)No Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees
referred to in Section 9(k).


 


(i)Survival.
The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.


 


(j)Further Assurances.
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.


 


(k)Indemnification.
In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless each Buyer and each holder of any Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including,
without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation
or warranty made by the Company or any Subsidiary in any of the Transaction Documents, (b) any breach of any covenant, agreement
or obligation of the Company or any Subsidiary contained in any of the Transaction Documents or (c) any cause of action, suit,
proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action
brought on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from
(i) the execution, delivery, performance or enforcement of any of the Transaction Documents, (ii) any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (iii) any disclosure
properly made by such Buyer pursuant to Section 4(i), or (iv) the status of such Buyer or holder of the Securities either as an
investor in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement
(including, without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable
relief). To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make
the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable
law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section
9(k) shall be the same as those set forth in Section 6 of the Registration Rights Agreement.


 






    	41



    	 



    
 


(l)Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality
or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock
and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after
the date of this Agreement.


 


(m)Remedies.
Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities, shall have
all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having
any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond
or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights
granted by law. Furthermore, the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge
any or all of its or such Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law
may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to seek specific
performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction
in any such case without the necessity of proving actual damages and without posting a bond or other security.


 


(n)Withdrawal
Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any
Subsidiary does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be),
any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights


 






    	42



    	 



    
 





(o)Payment Set
Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to any of the
other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or 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, foreign, 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. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other
Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement
and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be
converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the
U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.


 


(p)Judgment
Currency.


 


(i)If
for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction
Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the “Judgment Currency”) an amount due in US Dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:


 


(1)the date
actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or


 


(2)the date
on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which
such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment Conversion
Date”).


 


(ii)If
in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is a change in the
Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with
the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion
Date.


 






    	43



    	 



    
 


(iii)Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement.


 


(q)Independent
Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are several and
not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations
of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the
Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption
that the Buyers are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated
by the Transaction Documents or any matters, and the Company acknowledges that the Buyers are not acting in concert or as a group,
and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by the Transaction
Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction Documents has been made by such Buyer
independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with
such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such Buyer in connection with monitoring
such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Buyer
confirms that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The use
of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of the
Company, not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and
not because it was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained
in this Agreement and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between
the Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers.


 


 


[signature pages follow]


 




    	44



    	 



    

 


IN WITNESS WHEREOF, each Buyer and
the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.


 


 


	 	COMPANY:
	 	 
	 	FUSE SCIENCE, INC.
	 	 
	 	 
	 	By: 	/s/ Brian Tuffin
	 	Name:	Brian Tuffin




	 	Title:	Chief Executive Officer






  




    	 



    	 



    

 


IN WITNESS WHEREOF, each Buyer and
the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.


 


 


	 	BUYERS:
	 	 
	 	HUDSON BAY MASTER FUND LTD
	 	 
	 	 
	 	By: 	/s/ George Antonopoulos




	 	Name:	George Antonopoulos




	 	Title:	Authorized Signatory






 


 




    	 



    	 



    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.


  


 


	 	IROQUOIS MASTER FUND LTD.
	 	 
	 	 
	 	By: 	/s/ Joshua Silverman




	 	Name:	Joshua Silverman




	 	Title:	Authorized Signatory






  




    	 



    	 



    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.


 


 





	 	GRQ CONSULTANTS, INC. 401(K)
	 	 
	 	By:	/s/ Barry
Honig
	 	Name:	Barry Honig
	 	Title:	Trustee




 







    	 



    	 



    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.


  


 


	 	
        OMNIPOINT CAPITAL, LLC 

	 	 
	 	 
	 	By: 	/s/ Leonard Adler




	 	Name:	Leonard Adler




	 	Title:	Manager






  




    	 



    	 



    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.


  


 


	 	
        


CORADOR MULTI STRATEGY PARTNERS, LP

	 	 
	 	 
	 	By: 	/s/ David E Graber




	 	Name:	David E. Graber




	 	Title:	Managing Principal






 







    	 



    	 



    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.


  


 


	 	
        EVOLUTION CAPITAL FUND I, L.P. 

	 	 
	 	 
	 	By: 	/s/ Scott DeBo




	 	Name:	Scott DeBo




	 	Title:	Manager






  




    	 



    	 



    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.





 


	 	 
	 	 	 /s/ Rahoul Mehra




	 	 	RAHOUL MEHRA
	 	 	 


  


	 	 
	 	 	/s/ Glennis Mehra




	 	 	GLENNIS MEHRA
	 	 	 


  




    	 



    	 



    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above. 


 


	 	 
	 	 	/s/ Christopher Hubman




	 	 	CHRISTOPHER HUBMAN
	 	 	 


  




    	 



    	 



    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above. 


 


	 	 
	 	 	/s/ Daniel Foley




	 	 	DANIEL FOLEY
	 	 	 


  




    	 



    	 



    

 


SCHEDULE
OF BUYERS


 





	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
	Buyer	Address and Facsimile Number	Original Principal Amount of

Series A

Notes	Original

Principal Amount of

Series B

Notes	Aggregate

Number of

Series A

Warrant Shares	Aggregate

Number of

Series B

Warrant Shares	Purchase Price	Legal Representative’s

Address and Facsimile Number
	 	 	 	 	 	 	 	 
	Hudson Bay Master Fund Ltd	777 Third Avenue, 30th Floor

New York, NY 10017

Attention: Yoav Roth

Facsimile: (212) 571-1279

E-mail: investments@hudsonbaycapital.com

Residence: Cayman Islands	$625,000	N/A	3,676,471	3,676,471	$625,000	N/A
	 	 	 	 	 	 	 	 
	Iroquois Master Fund Ltd.	
        Iroquois Master Fund Ltd.

        641 Lexington Avenue

        26th Floor

        New York, New York 10022

        Facsimile: (212) 207-3452

        Residence: Cayman Islands
	$625,000	N/A	3,676,471	3,676,471	$625,000	N/A
	 	 	 	 	 	 	 	 
	GRQ Consultants, Inc. 401K 	
        c/o Barry Honig, trustee

        4400 Biscyane Bvd

        Suite 850

        Miami, Florida 33137

        Residence: Florida
	$250,000	N/A	1,470,589	1,470,589	$250,000	N/A
	 	 	 	 	 	 	 	 
	Omnipoint Capital, LLC	
        8004 N.W. 154th Street

        Suite #312

        Miami, Florida 33015
	N/A	$250,0001	1,470,589	1,470589	$250,0001	N/A













 





 



 






















		1	Represents conversion of an outstanding promissory note in the principal amount of $250,000.







  






    	 



    	 



    
 





	Cobrador Capital Advisors, LLC	
        570 Lexington Avenue

        49th Floor

        New York, NY 10022
	N/A	$100,000	588,236	588,236	$100,000	N/A
	 	 	 	 	 	 	 	 
	Evolution Capital Fund I, L.P.	
        c/o Vincent Rees

        175 South Main Street

        15th Floor

        Salt Lake City UT 84111
	N/A	$50,000	294,118	294,118	$50,000	N/A
	 	 	 	 	 	 	 	 
	Rahoul & Glennis Mehra	 	N/A	$50,000	294,118	294,118	$50,000	N/A
	 	 	 	 	 	 	 	 
	Christopher Hubman	

645 Hermitage Circle 

Palm Beach Florida 33410

Facsimilie: 561-354-6039

Residence: Florida	N/A	$50,000	294,118	294,118	$50,000	N/A
	 	 	 	 	 	 	 	 
	Daniel Foley	

27 North Bayard

Mahwah, NJ 07430

Residence: New Jersey	N/A	$50,000	294,118	294,118	$50,000	N/A
	TOTAL:	 	$2,050,000	12,058,828	12,058,828	$2,050,000