SECURITIES
PURCHASE AGREEMENT


Loreto Resources Corporation


 Series A Convertible Preferred
Stock


 


This Securities Purchase
Agreement (this “Agreement”) is dated as of March 8, 2013, by and between Loreto Resources Corporation, a Nevada
corporation (the “Company”), and each purchaser identified on the separate Omnibus Signature Pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).


 


Recitals:


 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Rule 506 under Section 4(2), or Regulation S, under the Securities
Act, the Company desires to issue and sell to the Purchasers, and the Purchasers, severally and not jointly, desire to purchase
from the Company, an aggregate of One Thousand and Three Hundred (1,300) shares of the Company’s Series A Preferred Stock,
for the Aggregate Purchase Price (the “Offering”), as more fully described in this Agreement.


 


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


 


ARTICLE I.

DEFINITIONS


 


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


 


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




 


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


 


“Aggregate
Purchase Price” means One Hundred Thirty Thousand and 00/100 Dollars ($130,000).


 


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


 


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


 


“Certificate
of Designations” means the Company’s Certificate of Designations, Preferences and Rights of Series a Convertible
Preferred Stock, in substantially the form of Exhibit D attached hereto.


 




    	 



    	 



    

 


“Closing”
means the closing of the purchase and sale of the Series A Preferred Stock pursuant to Section 2.1.


 


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


 


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


 


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


 


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


 


“Company Counsel”
means Gottbetter & Partners, LLP (“G&P”), with offices located at 488 Madison Avenue, 12th
Floor, New York, NY 10022.


 


“Conversion
Shares” means the shares of Common Stock to be issued upon conversion of the Series A Preferred Stock pursuant to the
terms of the Certificate of Designations.


 


“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.


 


“DTC”
means The Depository Trust Company.


 


“Escrow Agent”
means G&P, in its capacity as escrow agent under the Escrow Agreement.


 


“Escrow Agreement”
means the Escrow Agreement by and among the Company, the Escrow Agent and each Purchaser, in substantially the form of Exhibit
E attached hereto, pursuant to which the Purchasers shall deposit Subscription Amounts with the Escrow Agent to be applied
to the transactions contemplated hereunder.


 


“Escrow Fee”
means $500 per Purchaser, as further set forth in the Escrow Agreement.


 


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


 




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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Purchase
Price” means $100 per share.


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.6.


 


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


 


“Required
Delivery Date” shall have the meaning ascribed to such term in Section 4.3(c).


 


“Reverse Stock
Split” means a 1-for-100 reverse split of the Company’s Common Stock.


 


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


 


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


 




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


 


“Securities”
means the shares of Series A Preferred Stock and the Conversion Shares.


 


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


 


“Series A
Preferred Stock” means the Company’s Series A Convertible Preferred Stock, par value $0.001 per share, subject
to the terms and conditions set forth in the Certificate of Designations.


 


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


 


“Subscription
Amount” means, as to each Purchaser, the aggregate Purchase Price to be paid for Series A Preferred Stock purchased hereunder
as specified below such Purchaser’s name on the Omnibus Signature Page of this Agreement and above the heading “Subscription
Amount,” in United States dollars and in immediately available funds.


 


“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof.


 


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


 


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


 


“Transaction
Documents” means this Agreement, the Certificate of Designations, and the Escrow Agreement, all exhibits and schedules
thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer
Agent” means Continental Stock Transfer & Trust, the current transfer for the Company’s Common Stock, with
a mailing address of 17 Battery Place, 8th Floor, New York, NY 10004, and a facsimile number of (212) 616-7616 and any
successor transfer agent of the Company.


 




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“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority of the shares of Series A Preferred Stock then outstanding and reasonably acceptable to the Company,
the reasonable fees and expenses of which shall be paid by the Company.


 


ARTICLE II.

PURCHASE AND SALE


 


2.1           Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and each Purchaser
agrees to purchase, severally and not jointly, such number of shares of Series A Preferred Stock as specified below such Purchaser’s
name on such Purchaser’s Omnibus Signature Page above the heading “Number of
Shares”. Concurrently with each Purchaser’s execution of this Agreement, the Purchaser shall deliver to the Escrow
Agent, via wire transfer or a certified check, immediately available funds equal to such Purchaser’s Subscription Amount
as set forth on the Omnibus Signature Page hereto executed by such Purchaser, and the Company shall deliver to each Purchaser certificate(s)
representing its respective shares of Series A Preferred Stock being purchased by such Purchaser at such Closing, as set forth
on the Omnibus Signature Page hereto executed by such Purchaser, and the Company and each Purchaser shall deliver the other items
set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2
and 2.3, the Closing shall occur at the offices of G&P or such other location as the parties shall mutually agree.


 


2.2           Deliveries.


 


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


 


(i)          this
Agreement duly executed by the Company;


 


(ii)         a
certificate representing such Purchaser’s shares of Series A Preferred Stock;


 


(iii)        a
certificate evidencing the formation and good standing of the Company and each of its Subsidiaries in each such entity’s
jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of incorporation or formation
as of a date within thirty (30) days of the Closing Date;


 




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(iv)        a
certified copy of the certificate or articles of incorporation or formation of the Company and each Subsidiary as certified by
the Secretary of State (or comparable office) of such Person’s jurisdiction of incorporation or formation within thirty (30)
days of the Closing Date;


 


(v)         certificates,
in form acceptable to the Purchasers, executed by the Secretary or other officer of the Company and each Subsidiary and dated as
of the Closing Date, as to (i) in the case of the Company, resolutions of its board of directors authorizing 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, in a form reasonably acceptable to the Purchasers, (ii) its articles or certificate of incorporation
or formation, and (iii) its by-laws, operating agreement or other fundamental documents, each as in effect on the Closing Date;


 


(vi)        a
letter from the Transfer Agent certifying the number of shares of Common Stock outstanding on the Closing Date;


 


(vii)       such
other documents relating to the transactions contemplated by this Agreement as such Purchaser, or its counsel, may reasonably request.


 


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


 


(i)          the
Omnibus Signature Page to this Agreement and the Escrow Agreement, duly executed by such Purchaser;


 


(ii)         the
Accredited Investor Certification attached hereto as Exhibit A;


 


(iii)        the
Investor Profile attached hereto as Exhibit B;


 


(iv)        the
Anti-Money Laundering Form attached hereto as Exhibit C;


 


(v)         to
the Escrow Agent, such Purchaser’s Subscription Amount by wire transfer to the account specified in the Escrow Agreement
or by certified or bank check, in United States Dollars, in immediately available funds; and


 


(vi)        such
other documents relating to the transactions contemplated by this Agreement as the Company or its counsel may reasonably request.


 


2.3           Closing
Conditions. 


 


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


 




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(i)          funds
have been deposited in escrow as described in Section 2.2(b)(v) equal to at least the Aggregate Purchase Price, and corresponding
documentation with respect to such amounts has been delivered by the Purchasers as described in Section 2.2(b), and all such funds
have cleared and are available;


 


(ii)         the
Purchasers shall have paid to G&P (A) an aggregate of $37,000 for its professional legal fees in connection with the transactions
contemplated hereby, and (B) an Escrow Fee of $500 per Purchaser as further set forth in the Escrow Agreement;


 


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


 


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


 


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


 


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


 


(i)          the
Company shall have filed the Certificate of Designations with the Secretary of State of the State of Delaware;


 


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


 


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


 


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


 


(v)         there
shall have been no Material Adverse Effect (as defined in Section 3.1(b) below) with respect to the Company since the date hereof;
and


 


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


 




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ARTICLE III.

REPRESENTATIONS AND WARRANTIES


 


3.1           Representations
and Warranties of the Company. Except as set forth in the schedules referred to in
this Section 3.1 (the “Disclosure Schedules”), which Disclosure
Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure
contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and
warranties to each Purchaser as of the date hereof and as of the Closing Date (unless as of a specific date therein in which case
as of such date):


 


(a)          Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company owns, directly
or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the
issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references
to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.


 


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


 




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(c)          Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of each of this Agreement and the other Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith
or therewith other than in connection with the Required Approvals (as defined in Section 3.1(e) below). This Agreement and each
other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.


 


(d)          No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any
of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which
any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals (as defined
in Section 3.1(e) below), conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal
and state securities laws and regulations and the rules and regulations of any Trading Market), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have
or reasonably be expected to result in a Material Adverse Effect.


 


(e)          Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.6 of this Agreement, (ii) the notice and/or application(s), if any, to each applicable
Trading Market for the issuance and sale of the Securities and the listing or qualification of the Conversion Shares for trading
or quotation thereon in the time and manner required thereby and (iii) the filing of Form D with the Commission and such filings
as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).


 




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(f)          Issuance
of the Securities. The shares of Series A Preferred Stock have been duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens other than as may have been imposed by the Purchaser and other than restrictions on transfer provided for in the Transaction
Documents. Upon any conversion of Series A Preferred Stock, the Conversion Shares will have been duly authorized and, when issued
in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear
of all Liens other than as may have been imposed by the Purchaser and other than restrictions on transfer provided for in the Transaction
Documents.


 


(g)          Capitalization.
The authorized and outstanding capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g)
shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the
date hereof. Other than as indicated in Schedule 3.1(g), no Person has any right of first refusal, preemptive right, right
of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as
a result of the purchase and sale of the Securities and as set forth in Schedule 3.1(g), there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any
shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or
may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Securities
will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and
will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under
any of such securities. Other than as indicated in Schedule 3.1(g), 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. Other than as indicated in Schedule 3.1(g), neither the Company nor any Subsidiary has
any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding
shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of
Directors or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s stockholders.


 




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(h)          SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively
referred to herein as the “SEC Reports”) and, other than a report that is required solely pursuant to Item 1.01,
1.02, 2.03, 2.04, 2.05, 2.06, 4.02(a) or 5.02(e) of Form 8-K, has filed such SEC Reports on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect
at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.


 


(i)          Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i) there has
been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v)
the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity
compensation plans. The Company does not have pending before the Commission any request for confidential treatment of information.
Except for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability,
fact, circumstance, occurrence or development has occurred or exists, or is reasonably expected to occur or exist, with respect
to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial condition, that
would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.


 




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


 


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


 


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


 




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


 


(n)          Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective businesses
and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2)
years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited
financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have
a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is
no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except
where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


(o)          Transactions
with Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or
any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $25,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including equity compensation agreements under any equity
compensation plan of the Company.


 




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(p)          Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker,
financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents.


 


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


 


(r)          Registration
Rights. Other than as disclosed on Schedule 3.1(r), no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company or any Subsidiary.


 


(s)          Listing
and Maintenance Requirements. Other than as indicated in Schedule 3.1(s), the Company has not, in the twelve (12) months
preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to
the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company
is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing
and maintenance requirements.


 


(t)          Disclosure.
All of the materials furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby are true and correct and do not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.


 


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


 




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(v)         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 SEC Reports and
is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.


 


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


 


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


 


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


 


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


 




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(aa)         
Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the
Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby and that no Purchaser 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 the Company’s
knowledge, a “beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3
under the Exchange Act. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement
and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby
by the Company and its representatives.


 


(bb)         Regulation
M Compliance.  Neither the Company nor any of its Subsidiaries has, and to the Company’s knowledge no one acting
on their behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased,
or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation
for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation
paid to the Company’s placement agent in connection with the placement of the Securities.


 


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


 


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


 


(ee)         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 Purchaser 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.


 


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


 




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


 


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


 


(c)          Purchaser
Status. The information contained in the Accredited Investor Certification, attached hereto as Exhibit A, and Investor
Profile, attached hereto as Exhibit B, delivered by the Purchaser in connection with this Agreement is complete and accurate
in all respects. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date
on which it converts any Series A Preferred Stock, it will be either: (i) an “accredited investor” as defined in Rule
501(a) of Regulation D under the Securities Act on the basis indicated therein, or (ii) a “qualified institutional buyer”
as defined in Rule 144A(a) under the Securities Act, or (iii) not a U.S. Person as defined in Regulation S under the Securities
Act and a resident of the jurisdiction set forth in Exhibit A hereto. The Purchaser is not required to be a registered broker-dealer
under Section 15 of the Exchange Act.


 




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(d)          Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser has received all information regarding
the Company and its operations and financial conditions as it has requested. Such Purchaser is able to bear the economic risk of
an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. Such Purchaser
understands that an active public market for the Company’s Common Stock may not exist or continue to exist. Such Purchaser,
its advisers, if any, and designated representatives, if any, have received all information about that the Company they have requested
and have reviewed such information and have had an opportunity to discuss the Company’s business, management and financial
affairs and the risks involved with an investment in the Company with its management and have received responses to their queries
to their satisfaction. Such Purchaser understands that such discussions, as well as any written information provided by the Company,
were intended to describe the aspects of the Company’s business and prospects which the Company believes to be material,
but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Agreement, the Company
makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty
of any kind with respect to any information provided by any entity other than the Company. Some of such information may include
projections as to the future performance of the Company, which projections may not be realized, may be based on assumptions which
may not be correct and may be subject to numerous factors beyond the Company’s control. Additionally, such Purchaser understands
and represents that such Purchaser is purchasing the Securities notwithstanding the fact that the Company may disclose in the future
certain material information the Subscriber has not received, including its financial results for its current fiscal quarter.


 


(e)          General
Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented
at any seminar or any other general solicitation or general advertisement.


 


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


 




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(g)          Anti-Terrorism.
Such Purchaser represents that neither it nor, to its knowledge, any person or entity controlling, controlled by or under common
control with it, nor any person having a beneficial interest in it, nor any person on whose behalf such Purchaser is acting: (i)
is a person listed in the Annex to Executive Order No. 13224 (2001) issued by the President of the United States (Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism); (ii) is named
on the List of Specially Designated Nationals and Blocked Persons maintained by OFAC; (iii) is a non-U.S. shell bank or is providing
banking services indirectly to a non-U.S. shell bank; (iv) is a senior non-U.S. political figure or an immediate family member
or close associate of such figure; or (v) is otherwise prohibited from investing in the Company pursuant to applicable U.S. anti-money
laundering, anti-terrorist and asset control laws, regulations, rules or orders (categories (i) through (v), each a “Prohibited
Subscriber”). If such Purchaser is a financial institution that is subject to the USA Patriot Act, such Purchaser represents
that it has met all of its obligations under the USA Patriot Act.


 


(h)          Speculative
Nature of Investment. Such Purchaser or its duly authorized representative realizes that because of the inherently speculative
nature of businesses of the kind conducted and contemplated by the Company, the Company’s financial results may be expected
to fluctuate from month to month and from period to period and will, generally, involve a high degree of financial and market risk
that could result in substantial or, at times, even total losses for investors in securities of the Company.


 


(i)          Complete
Information. All of the information that such Purchaser has heretofore furnished or which is set forth herein is correct and
complete as of the date of this Agreement, and, if there should be any material change in such information prior to the admission
of the undersigned to the Company, such Purchaser will immediately furnish revised or corrected information to the Company.


 


ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES


 


4.1           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 Series A Preferred Stock in which the Company shall record the name
and address of the Person in whose name the Series A Preferred Stock have been issued (including the name and address of each transferee),
the number of shares of Series A Preferred Stock held by such Person, and the number of Conversion Shares issuable upon conversion
of the Series A Preferred Stock held by such Person. The Company shall keep the register open and available at all times during
business hours for inspection of any Purchaser or its legal representatives.


 




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4.2           Transfer
Agent Instructions. If a Purchaser effects a sale, assignment or transfer of the Securities
in accordance with Section 4.3, the Company shall, subject to the terms and conditions hereof, 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 Purchaser to effect such sale, transfer or assignment. In the event that such
sale, assignment or transfer involves Conversion 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 Purchaser, assignee or transferee (as the case
may be) without any restrictive legend in accordance with Section 4.3(c) below. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to a Purchaser. Accordingly, the Company acknowledges that the remedy at
law for a breach of its obligations under this Section will be inadequate and agrees, in the event of a breach or threatened breach
by the Company of the provisions of this Section, that a Purchaser 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.


 


4.3           Transfer
Restrictions. 


 


(a)          The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in
connection with a pledge as contemplated in Section 4.3(b), the Company may require the transferor thereof to provide to the Company
an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred
Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the
terms of this Agreement and shall have the rights and obligations of a Purchaser under this Agreement.


 


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


 


THIS SECURITY HAS NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER
LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT
OR OTHER LOAN SECURED BY SUCH SECURITIES.


 




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(c)          Certificates
evidencing the Securities shall not contain any legend (including the legend set forth in Section 4.3(a) hereof), (i) while a
registration statement (including the Registration Statement) covering the resale of such Security is effective under the Securities
Act, (ii) following any sale of such Securities pursuant to Rule 144, (iii) if such Securities are eligible for sale under Rule
144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as
to such Securities and without volume or manner-of-sale restrictions, or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).
If all or any of a Purchaser’s shares of Series A Preferred Stock is converted at a time when there is an effective registration
statement to cover the resale of the Conversion Shares, or if the Conversion Shares may be sold under Rule 144 and the Company
is then in compliance with the current public information required under Rule 144, or if the Conversion Shares may be sold under
Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144
as to such Conversion Shares, then such Conversion Shares shall be issued free of all legends. The Company agrees that at such
time as such legend is no longer required under this Section 4.3(c), it will no later than three (3) Trading Days following the
delivery by a Purchaser 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 Purchaser as may be required above in
this Section, as directed by such Purchaser, either: (A) provided that the Transfer Agent is participating in the DTC Fast Automated
Securities Transfer Program and such Securities are Conversion Shares, credit the aggregate number of shares of Common Stock to
which such Purchaser shall be entitled to such Purchaser’s or its designee’s balance account with DTC through its
Deposit/Withdrawal at Custodian system or (B) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program or if such Securities are not Conversion Shares, issue and deliver (via reputable overnight courier) to such
Purchaser, a certificate representing such Securities that is free from all restrictive and other legends, registered in the name
of such Purchaser or its designee (the date by which such credit is so required to be made to the balance account of such Purchaser’s
or such Purchaser’s nominee with DTC or such certificate is required to be delivered to such Purchaser pursuant to the foregoing
is referred to herein as the “Required Delivery Date”). The Company may not make any notation on its records
or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section unless the holder
is an Affiliate of the Company. Certificates for Securities subject to legend removal hereunder shall be transmitted by the Transfer
Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the DTC System as directed by such
Purchaser.


 




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(d)          If
the Company fails to (i) issue and deliver (or cause to be delivered) to a Purchaser by the Required Delivery Date a certificate
representing the Securities so delivered to the Company by such Purchaser that is free from all restrictive and other legends or
(ii) credit the balance account of such Purchaser’s or such Purchaser’s nominee with DTC for such number of Conversion
Shares so delivered to the Company, then, in addition to all other remedies available to such Purchaser, the Company shall pay
in cash to such Purchaser on each day after the Required Delivery Date that the issuance or credit of such shares is not timely
effected an amount equal to two percent 2% of the Purchaser’s original Subscription Amount. Nothing herein shall limit such
Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities
as required by the Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief. In addition to the foregoing,
if the Company fails to so properly deliver such unlegended certificates or so properly credit the balance account of such Purchaser’s
or such Purchaser’s nominee with DTC by the Required Delivery Date, and if on or after the Required Delivery Date such Purchaser
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser
of shares of Common Stock that such Purchaser anticipated receiving from the Company without any restrictive legend, then, in addition
to all other remedies available to such Purchaser, the Company shall, within three (3) Trading Days after such Purchaser’s
request and in such Purchaser’s sole discretion, either (i) pay cash to such Purchaser in an amount equal to such Purchaser’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In
Price”), at which point the Company’s obligation to deliver such certificate or credit such Purchaser’s balance
account shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation to deliver to such Purchaser
a certificate or certificates or credit such Purchaser’s DTC account representing such number of shares of Common Stock that
would have been issued if the Company timely complied with its obligations hereunder and pay cash to such Purchaser in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Conversion Shares (as the case may be)
that the Company was required to deliver to such Purchaser by the Required Delivery Date times (B) the VWAP of the Common Stock
on the Trading Day immediately preceding the Required Delivery Date.


 


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


 




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(f)          The
Company is a “shell company” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Pursuant to Rule 144(i), securities issued by a current or former shell company (that is, the Securities) that otherwise
meet the holding period and other requirements of Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year after
the Company (a) is no longer a shell company; and (b) has filed current “Form 10 information“ (as defined in Rule 144(i))
with the SEC reflecting that it is no longer a shell company, and provided that at the time of a proposed sale pursuant to Rule
144, the Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and has filed all reports
and other materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months
(or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports. As a
result, the restrictive legends on certificates for the Securities cannot be removed except in connection with an actual sale meeting
the foregoing requirements or pursuant to an effective registration statement.


 


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


 


4.5           Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities
hereunder to pay its outstanding obligations to advisors, service providers and vendors and to pay any outstanding tax liabilities.
The Company shall not use such proceeds: (a) for the redemption of any Common Stock or Common Stock Equivalents or (b) in violation
of FCPA or OFAC regulations.


 


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


 




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4.7           Reservation
of Common Stock. From and after the effectiveness of the Reverse Stock Split, the
Company shall reserve and keep available at all times, free of preemptive rights, a number of shares of Common Stock equal to 100%
of the maximum number of Conversion Shares issuable pursuant to any conversion of the Series A Preferred Stock (without taking
into account any limitations on the conversion of the Series A Preferred Stock set forth in the Certificate of Designations).



 


4.8           Listing
of Common Stock. The Company hereby agrees to use best efforts to maintain the listing
or quotation of the Common Stock on the Trading Market on which it is currently listed or quoted, and concurrently with the Closing,
the Company shall apply, if required, to list or quote all of the Conversion Shares on such Trading Market and promptly secure
the listing or quotation of all of the Conversion Shares on such Trading Market. The Company further agrees, if the Company applies
to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Conversion Shares,
and will take such other action as is necessary to cause all of the Conversion Shares to be listed or quoted on such other Trading
Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing or quotation
and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Trading Market.


 


4.9           Conduct
of Business. 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.


 




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


 


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


 


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


 


4.13         Authorized
Stock; Stock Split. The Company will effect the Reverse Stock Split within sixty (60)
days after the Closing Date. The Company will give notice thereof to FINRA under Commission Rule 10b-17 and FINRA Rule 6490 and
provide FINRA all necessary documents and information within fifteen (15) days after the Closing Date.


 


ARTICLE V.

MISCELLANEOUS


 


5.1           Termination. 
The outstanding obligations of the Company, on the one hand, and the Purchasers, on the other hand, to effect the Closing shall
terminate as follows:


 


(a)          upon
the mutual written consent of the Company and the Purchasers;


 


(b)          by
the Company if any of the conditions set forth in Section 2.3(a) shall have become incapable of fulfillment, and shall not have
been waived by the Company; or


 


(c)          by
a Purchaser (with respect to itself only) if any of the conditions set forth in Section 2.3(b) or (c) shall have become incapable
of fulfillment, and shall not have been waived by the Investor.


 




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provided,
however, that, except in the case of clause (a) above, the party seeking
to terminate its obligation to effect the Closing shall not then be in breach of any of its representations, warranties, covenants
or agreements contained in this Agreement or the other Transaction Documents if such breach has resulted in the circumstances giving
rise to such party’s seeking to terminate its obligation to effect the Closing.


 


5.2           Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary,
each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company
shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities
to the Purchasers. Notwithstanding the foregoing, the Purchasers shall pay to G&P (a) an aggregate of $37,000 for its professional
legal fees in connection with the transactions contemplated hereby, and (b) an Escrow Fee of $500 per Purchaser as further set
forth in the Escrow Agreement, as provided in Section 2.3(a)(ii) above.


 


5.3           Entire
Agreement. The Transaction Documents, together with the exhibits and Listing s thereto,
contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents,
exhibits and schedules. In the event of any conflict between the terms of this Agreement and the Certificate of Designations, the
Certificate of Designations shall govern.


 


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


 


5.5           Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended
except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers holding at least 67% of the
aggregate number of shares of Series A Preferred Stock issued hereunder, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right.


 


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


 




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


 


5.8           No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.6.


 


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


 


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


 


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


 




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(b)    This Agreement
is intended to be read and construed in conjunction with the additional Transaction Documents. Accordingly, pursuant to the terms
and conditions of this Agreement and the Escrow Agreement, it is hereby agreed that the execution by the Purchaser of this Agreement,
in the place set forth on the Omnibus Signature Page below, shall constitute agreement to be bound by the terms and conditions
hereof and the terms and conditions of the Escrow Agreement, with the same effect as if each of such separate but related agreement
were separately signed by such Purchaser.


 


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


 


5.13         Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods
therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to
the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided,
however, that in the case of a rescission of a conversion of Series A Preferred
Stock, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded conversion
notice concurrently therewith.


 


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


 


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


 




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


 


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


 


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


 


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


 


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


 


(Signature Pages Follow)


 




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


 


	LORETO RESOURCES CORPORATION	 	Address for Notice:
	 	 	 
	By:	/s/ Luis F. Saenz	 	Fax:
	Name: Luis F. Saenz	 	 
	Title: President	 	 
	 	 	 
	With a copy to (which shall not constitute notice):	 	 




   


Gottbetter & Partners, LLP


488 Madison Avenue, 12th Floor


New York, NY 10022


Telephone Number: (212) 400-6900


Facsimile Number: (212) 400-6901


Attention: Adam S. Gottbetter, Esq.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

OMNIBUS SIGNATURE PAGE FOR PURCHASER FOLLOWS.]


 


[Signature Page for Securities Purchase Agreement]


 




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LORETO
RESOURCES corporation


OMNIBUS SIGNATURE PAGE TO


SECURITIES PURCHASE AGREEMENT


AND ESCROW AGREEMENT


 


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


 





	SUBSCRIBER (individual)	 	 	SUBSCRIBER (entity)
	 	 	 	 
	 	 	 	Commonwealth Investments, LLC
	Signature	 	 	Name of Entity
	 	 	 	 
	 	 	 	/s/ Jimmy Wang
	Print Name	 	 	Signature of Authorized Person
	 	 	 	 
	 	 	 	Print Name:	  Jimmy Wang
	Signature (if Joint Tenants or Tenants in Common)	 	 	 	 
	 	 	 	Title:	Manager
	 	 	 	 
	Address of Principal Residence:	 	 	Address of Executive Offices:
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Social Security Number(s):	 	 	IRS Tax Identification Number:
	 	 	 	 
	 	 	 	 
	Telephone Number:	 	 	Telephone Number:
	 	 	 	 
	 	 	 	 
	Facsimile Number:	 	 	Facsimile Number:
	 	 	 	 
	 	 	 	 
	E-mail Address:	 	 	E-mail Address:
	 	 	 	 




    


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


 


	 	 	 
	 	 	 
	 	 	 


 


 


	1,300	 	X	$  100    	=	$    130,000.00               
	Number of Shares	 	 	 	 	Subscription Amount


 


[SIGNATURE PAGES CONTINUE]


 




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EXHIBIT A


 


LORETO RESOURCES CORPORATION


ACCREDITED INVESTOR CERTIFICATION


 


	 	 	 	 	
        For Individual Investors Only

        (all Individual Investors must INITIAL
        where appropriate):

	Initial	 	________	 	I have a net worth (including homes, furnishings and automobiles, but excluding for these purposes the value of my primary residence) in excess of $1 million either individually or through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership interest with my spouse.
	Initial	 	________	 	I have had an annual gross income for the past two years of at least $200,000 (or $300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year.
	Initial	 	________	 	I am a director or executive officer of Loreto Resources Corporation
	 	 		 	 
	 	 		 	
        For Non-Individual Investors

        (all Non-Individual Investors must INITIAL
        where appropriate):

	Initial	 	________	 	The investor certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet at least one of the criteria for Individual Investors set forth above.
	Initial	 	________	 	The investor certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least $5 million and was not formed for the purpose of investing in the Company.
	Initial	 	________	 	The investor certifies that it is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan association, insurance company or registered investment adviser.
	Initial	 	________	 	The investor certifies that it is an employee benefit plan whose total assets exceed $5,000,000 as of the date of this Agreement.
	Initial	 	________	 	The undersigned certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet either of the criteria for Individual Investors.
	Initial	 	________	 	The investor certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity.
	Initial	 	________	 	The undersigned certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934.
	Initial	 	________	 	The investor certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding $5,000,000 and not formed for the specific purpose of investing in the Company.
	Initial	 	________	 	The investor certifies that it is a trust with total assets of at least $5,000,000, not formed for the specific purpose of investing in the Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.
	Initial	 	________	 	The investor certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, and which has total assets in excess of $5,000,000.
	Initial	 	________	 	The investor certifies that it is an insurance company as defined in §2(13) of the Securities Act of 1933, as amended, or a registered investment company.


 




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For Non-U.S.
Person Investors


(all Investors who are not a U.S. Person
must INITIAL this section):


 


	Initial	 	 ________	 	The investor is not a “U.S. Person” as defined in Regulation S; and specifically the investor is not:


 


	 	A.	a natural person resident in the United States of America, including its territories and possessions (“United States”);


 


	 	B.	a partnership or corporation organized or incorporated under the laws of the United States;


 


	 	C.	an estate of which any executor or administrator is a U.S. Person;


 


	 	D.	a trust of which any trustee is a U.S. Person;


 


	 	E.	an agency or branch of a foreign entity located in the United States;


 


	 	F.	a non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person;


 


	 	G.	a discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; or


 


	 	H.	a partnership or corporation: (i) organized or incorporated under the laws of any foreign jurisdiction; and (ii) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.


 


And, in
addition:


 


	 	I.	the investor was not offered the securities in the United States;


 


	 	J.	at the time the buy-order for the securities was originated, the investor was outside the United States; and


 


	 	K.	the investor is purchasing the securities for its own account and not on behalf of any U.S. Person (as defined in Regulation S) and a sale of the securities has not been pre-arranged with a purchaser in the United States.


 









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EXHIBIT B




LORETO RESOURCES CORPORATION


Investor Profile

(Must be completed by Investor)


 


Section A - Personal Investor Information   


 


	Investor Name(s):	 


 


	Individual executing Profile or Trustee:	 


 


	Social Security Numbers / Federal I.D. Number:	 


 





	Date of Birth:	 	 	Marital Status:	 	 





	Joint Party Date of Birth:	 	 	Investment Experience (Years):	 	 





	Annual Income:	 	 	Liquid Net Worth:	 	 


 







	Net Worth*:	 	 	 


 


	Tax Bracket:	_____ 15% or below	_____ 25% - 27.5%	_____ Over 27.5%


 


	Home Street Address:	 


 


	Home City, State & Zip Code:	 




  


	Home Phone:  _______________		Home Fax: __________________		Home Email: ___________________________________


 


	Employer:	 


 


	Employer Street Address:	 


 


	Employer City, State & Zip Code:	 


 


	Bus.
    Phone:  ______________________	 	Bus.
    Fax:  __________________	 	Bus. Email: _________________	 


 


	Type of Business:	 


 


	Outside Broker/Dealer:	 


 


Section B – Certificate Delivery
Instructions


 


	____ 	Please deliver certificate to the Employer Address listed in Section A.
	____ 	Please deliver certificate to the Home Address listed in Section A.
	____ 	Please deliver certificate to the following address:	 


 


Section C – Form of Payment
– Check or Wire Transfer


 


	____ 	Check payable to Gottbetter & Partners, LLP, as Escrow Agent for Loreto Resources Corporation
	____ 	Wire funds from my outside account according to Section 1(a) of the Securities Purchase Agreement.
	____ 	The funds for this investment are rolled over, tax deferred from __________ within the allowed 60 day window.


 


Please check if you are a FINRA member
or affiliate of a FINRA member firm: ____


 


	 	 	 
	Investor Signature	 	Date


 


*         For purposes of calculating your
net worth in this form, (a) your primary residence shall not be included as an asset; (b) indebtedness secured by your primary
residence, up to the estimated fair market value of your primary residence at the time of your purchase of the securities, shall
not be included as a liability (except that if the amount of such indebtedness outstanding at the time of your purchase of the
securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of your primary residence,
the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by your primary residence in
excess of the estimated fair market value of your primary residence at the time of your purchase of the securities shall be included
as a liability


 




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EXHIBIT C


 


ANTI-MONEY LAUNDERING INFORMATION FORM


The following is required in accordance
with the AML provision of the USA PATRIOT ACT.


(Please fill out and return with requested
documentation.)


 


	INVESTOR NAME:	 	 
	 	 	 
	LEGAL ADDRESS:	 	 
	 	 	 
	 	 	 
	SSN# or TAX ID# 	 	 
	OF INVESTOR:	 	 


 


FOR INVESTORS WHO ARE INDIVIDUALS: 


 


	YEARLY
    INCOME: __________________________________________________		AGE: ________________________________________________________


 


	NET WORTH:  _______________________________________________________________	*


 


		*	For purposes of calculating your net worth in this form, (a) your primary residence shall
not be included as an asset; (b) indebtedness secured by your primary residence, up to the estimated fair market value of your
primary residence at the time of your purchase of the securities, shall not be included as a liability (except that if the amount
of such indebtedness outstanding at the time of your purchase of the securities exceeds the amount outstanding 60 days before such
time, other than as a result of the acquisition of your primary residence, the amount of such excess shall be included as a liability);
and (c) indebtedness that is secured by your primary residence in excess of the estimated fair market value of your primary residence
at the time of your purchase of the securities shall be included as a liability.



 


	OCCUPATION: 	 


 


	ADDRESS OF EMPLOYER:	 
	 	 
	 	 


 


INVESTMENT OBJECTIVE(S):  


 


IDENTIFICATION & DOCUMENTATION
AND SOURCE OF FUNDS:


 


		1.	Please submit a copy of
non-expired identification for the authorized signatory(ies) on the investment documents, showing name, date of birth, address
and signature. The address shown on the identification document MUST match the Investor’s address shown on the Investor
Signature Page.


 


	Current Driver’s License	or	Valid Passport	or	Identity Card
	 	 	(Circle one or more)	 	 


 


		2.	If the Investor is a corporation, limited liability company,
trust or other type of entity, please submit the following requisite documents: (i) Articles of Incorporation, By-Laws, Certificate
of Formation, Operating Agreement, Trust or other similar documents for the type of entity; and (ii) Corporate Resolution or power
of attorney or other similar document granting authority to signatory(ies) and designating that they are permitted to make the
proposed investment.



 


		3.	Please advise where the funds were derived from to make
the proposed investment:



 


	Investments	Savings	Proceeds of Sale	Other ____________
	 	 	(Circle one or more)	 


 


	Signature: 	 	 


 


	Print Name: 	 	 


 


	Title (if applicable): 	 	 


 


	Date: 	 


 




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ANTI MONEY LAUNDERING REQUIREMENTS


 


The USA PATRIOT Act


 


The USA PATRIOT Act is designed to detect,
deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money laundering requirements on brokerage
firms and financial institutions. Since April 24, 2002 all brokerage firms have been required to have new, comprehensive anti-money
laundering programs.


 


To help you understand these efforts, we
want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.


 


What is money laundering?


 


Money laundering is the process of disguising
illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection
with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.


 


How big is the problem and why is it
important?


 


The use of the U.S. financial system by
criminals to facilitate terrorism or other crimes could well taint our financial markets. According to the U.S. State Department,
one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year.


 


What are we required to do to eliminate
money laundering?


 


Under rules required by the USA PATRIOT
Act, our anti-money laundering program must designate a special compliance officer, set up employee training, conduct independent
audits, and establish policies and procedures to detect and report suspicious transaction and ensure compliance with such laws.
As part of our required program, we may ask you to provide various identification documents or other information. Until you provide
the information or documents we need, we may not be able to effect any transactions for you.


 




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EXHIBIT D


 


CERTIFICATE OF DESIGNATIONS


 




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EXHIBIT E


 


ESCROW AGREEMENT


 




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