SECURITIES
PURCHASE AGREEMENT


 


This SECURITIES
PURCHASE AGREEMENT (the "Agreement"), dated as
of May 20, 2014, by and
between IDS INDUSTRIES,  INC., a
Nevada  corporation, with
headquarters located at 533 Birch Street, Lake
Elsinore, CA
92530 (the "Company"), and KBM
WORLDWIDE, INC., a
New York corporation , with
its address at 80 Cuttermill Road, 410, Great
Neck, NY
11021 (the "Buyer").


 


WHEREAS:


 


A.                  
The Company and
the  Buyer are executing and delivering
this Agreement reliance upon the
exemption from securities
registration afforded by
the rules and
regulation promulgated by the United States Securities and Exchange Commission (the "SEC")
und Securities Act of 1933,
as amended (the "1933
Act");


 


B.                  
Buyer desires to purchase and the Company desires to issue and sell, up terms and conditions set forth in this Agreement an 8%
convertible note of the Company, form attached hereto as Exhibit A, in the aggregate principal amount of $53,000.00 (to with any
note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms
thereof, the "Note"), convertible into shares of common stock, $0.001 par value per share, of the Company (the "Common
Stock"), upon the term and subject to the limitations and conditions set forth in such Note.


 


C.                  
The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement , such principal amount of Note as is set
forth immediately below its name the signature pages hereto; and


 


NOW
THEREFORE, the Company and the Buyer severally (and not jointly) agree as follows:


 


1.                  
Purchase and Sale of Note.


 


a.                  
Purchase of Note. On the Closing Date (as defined below Company
shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth
immediately below the Buyer's name signature pages hereto.


 


b.                 
Form of Payment. On the Closing Date (as defined below),
( the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the "Purchase
Price") by wire transfer of immediately available funds to the Company, in accordance with the Company's written wiring instructions
, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer's
name on the signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the
Buyer, against delivery of such Purchase Price.


 


c.                  
Closing Date. Subject to the satisfaction (or written waiver)
of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant
to this Agreement (the "Closing Date") shall be 12:00 noon, Eastern Standard Time on or about May 23, 2014, or such
other mutually agreed upon time The closing of the transactions contemplated by this Agreement (the "Closing") shall
occur the Closing Date at such location as may be agreed to by the parties.


 


2.                  
Buyer's Representations and Warranties. The Buyer represent and warrants to the Company that:


 


a.                  
Investment Purpose. As of the date hereof, the Bu purchasing
the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (including, without limitation,
such additional shares of Common St k, if any, as are issuable (i) on account of interest on the Note, (ii) as a result of the
events described in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined
in Section 2(f) below) pursuant to this Agreement, such shares of Co on Stock being collectively referred to herein as the "Conversion
Shares" and, collectively with the Note, the "Securities") for its own account and not with a present view towards
the public sale or distribution thereof, except pursuant to sales registered or exempted from registration un r the 1933 Act;
provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum
or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.



    	 



    	 



    




 


b.                 
Accredited Investor Status. The Buyer is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D (an "Accredited Investor").


 


c.                  
Reliance on Exemptions. The Buyer understands that the Securities
are being offered and sold to it in reliance upon specific exemptions the registration requirements of United States federal and
state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Buyer set forth he order to determine the availability of such
exemptions and the eligibility of the Buyer to the Securities, securities laws or to comply with the terms and conditions of any
exemption thereunder (in case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities
may be pledged as collateral in connection with a bona fide margin account or lending arrangement.


 


g.Legends.
The Buyer understands that the Note and, until sue time as the Conversion Shares have been registered under the 1933 Act may be
sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that
can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):


 


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


 


The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for
sale un effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation
S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such
holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act,
which opinion shall be accepted by the Company so that t sale or transfer is effected. The Buyer agrees to sell all Securities,
including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus


 


d.                 
Information. The Buyer and its advisors, if any, have been,
a for so long as the Note remain outstanding will continue to be, furnished with all materials relating to the business, finances
and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the
Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue
be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to
the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the
public prior to or pro following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation
conducted by Buyer or any of its advisors or representatives shall modify, am affect Buyer's right to rely on the Company's representations
and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant
degree of risk. The Buyer is not aware of any facts that may constitute a breach any of the Company's representations and warranties
made herein.



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e.                  
Governmental Review. The Buyer understands that no United
States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement
of the Securities.


 


f.                  
Transfer or Re-sale. The Buyer understands that (i) the sale
or re-sale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws,
and the Securities may not be transferred unless (a) the Sec are sold pursuant to an effective registration statement under the
1933 Act, (b) the Buyer have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall form, substance
and scope customary for opinions of counsel in comparable transactions effect that the Securities to be sold or transferred may
be sold or transferred pursuant exemption from such registration , which opinion shall be accepted by the Company,) the Securities
are sold or transferred to an "affiliate" (as defined in Rule 144 promulgated und r the 1933 Act (or a successor rule)
("Rule 144")) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section
2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant
to Regulation S under the 1933 Act (or a successor rule) ("Regulation S"), and the Buyer shall have delivered to the
Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of
counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance
on Rule 144 may be made only in accordance with the terms of said Rule and further, if said not applicable, any re-sale of such
Securities under circumstances in which the seller ( person through whom the sale is made) may be deemed to be an underwriter
(as that term defined in the 1933 Act) may require compliance with some other exemption under the 19 or the rules and regulations
of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities
under the 1933 Act or an state delivery requirements, if any. In the event that the Company does not accept the opinion of counsel
provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144
or Regulation S, at the Deadline, it will be consider an Event of Default pursuant to Section 3.2 of the Note.


 


g.                  
Authorization; Enforcement. This Agreement has been duly
and validly authorized. This Agreement has been duly executed and delivered on behalf the Buyer, and this Agreement constitutes
a valid and binding agreement of the Buyer enforceable accordance with its terms.


 


h.                 
Residency. The Buyer is a resident of the jurisdiction set
immediately below the Buyer's name on the signature pages hereto.


 


3.                  
Representations and Warranties of the Company. The Company represents and warrants to the
Buyer that:


 


a.                  
Organization and Qualification. The Company and each Subsidiaries
(as defined below), if any, is a corporation duly organized, validly existing good standing under the laws of the jurisdiction
in which it is incorporated, with full pow authority (corporate and other) to own, lease, use and operate its properties and to
carry on its business as and where now owned, leased, used, operated and conducted. Schedule 3 (a sets forth a list of all of
the Subsidiaries of the Company and the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is
duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its owners use of
property or the nature of the business conducted by it makes such qualification nee except where the failure to be so qualified
or in good standing would not have a Material Adverse Effect. "Material Adverse Effect" means any material adverse effect
on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole,
or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. "Subsidiaries"
means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly,
any equity or other ownership interest.



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b.                 
Authorization; Enforcement. (i) The Company has all requisite
corporate power and authority to enter into and perform this Agreement, the Note consummate the transactions contemplated hereby
and thereby and to issue the Securities accordance with the terms hereof and thereof, (ii) the execution and delivery of this
Agreement, the Note by the Company and the consummation by it of the transactions contemplated and thereby (including without
limitation, the issuance of the Note and the issuance reservation for issuance of the Conversion Shares issuable upon conversion
or exercise thereof) have been duly authorized by the Company's Board of Directors and no further consent or authorization of
the Company, its Board of Directors, or its shareholders is required, (ii ) this Agreement has been duly executed and delivered
by the Company by its authorize representative, and such authorized representative is the true and official representative with
authority to sign this Agreement and the other documents executed in connection herewith bind the Company accordingly, and (iv)
this Agreement constitutes, and upon execution delivery by the Company of the Note, each of such instruments will constitute,
a legal, valid binding obligation of the Company enforceable against the Company in accordance with its terms.


 


c.                  
Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of: (i) 490,000,000 shares of Common Stock, $0.001 par value per share, of which 95,051,393 shares
are issued and outstanding; and (ii) 10,000,000 authorized shares of Preferred Stock, $0.001 par value per share, of which no
shares are issued and outstanding; no shares are reserved for issuance pursuant to the Company's stock option no shares are reserved
for issuance pursuant to securities (other than the Note and a nor convertible promissory note in favor of the Buyer dated March
19, 2014 in the amount of $53,000.00 for which 42,500,000 shares of Common Stock are presently reserved) exercisable for, or convertible
into or exchangeable for shares of Common Stock and 52,500,000 shares are reserved for issuance upon conversion of the Note. All
of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable.
No shares of capital stock of the Company are subject to preemptive rights any other similar rights of the shareholders of the
Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of
this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by
which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, (ii) there are no agreements or arrangements under the Company or any of its Subsidiaries is obligated
to register the sale of any of its o their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment
provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will
be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies
of the Company's Certificate of Incorporation as in effect on the date hereof ("Certificate of Incorporation "), the
Company s By laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities convertible into
or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company
shall provide the Buyer with a written update of this representation signed by the Company's Chief Executive on behalf of the
Company as of the Closing Date.


 


d.                 
Issuance of Shares. The Conversion Shares are duly authorized
and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully
paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not
be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability
upon the holder thereof.


 


e.                  
Acknowledgment of Dilution. The Company understand and acknowledges
the potentially dilutive effect to the Common Stock upon the issuance the Conversion Shares upon conversion of the Note. The Company
further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement,
the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests
of other shareholders of the Company.


 


f.                  
No Conflicts. The execution, delivery and performance of
this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with
or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or
result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in
a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations
and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company
or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except
for such conflicts, defaults, terminations, amendments, accelerations, cancellation violations as would not, individually or in
the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its Certificate
of Incorporation By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and
no event has occurred which with notice or lapse of time or both could Company or any of its Subsidiaries in default) under, and
neither the Company nor any Subsidiaries has taken any action or failed to take any action that would give to others any of termination,
amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries
is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible
defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its
Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in
violation of any law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement
and as required under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory
organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this
Agreement , the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms
hereof and to issue the Conversion Shares upon conversion Note. All consents, authorizations, orders, filings and registrations
which the Company required to obtain pursuant to the preceding sentence have been obtained or effected on or to the date hereof.
The Company is not in violation of the listing requirements of the Over Counter Bulletin Board (the "OTCBB") and does
not reasonably anticipate that the Common Stock will be delisted by the OTCBB in the foreseeable future. The Company a Subsidiaries
are unaware of any facts or circumstances which might give rise to any foregoing.



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g.                  
SEC Documents; Financial Statements. The Company has timely
filed all reports, schedules, forms, statements and other documents required to be filed by I the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act") (all of the foregoing filed prior to
the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits
to such documents) incorporated by reference therein, being hereinafter referred to herein as the "SEC Documents ").
Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits
and incorporated documents. As of their respective dates, the SEC Documents complied in all material re with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time were filed with the SEC, contained any untrue statement of a material fact or omitted to ate a material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading. None of the state made in any such SEC Documents is, or has been, required to be amended or updated
applicable law (except for such statements as have been amended or updated in subs filings prior the date hereof) As of their
respective dates, the financial statements Company included in the SEC Documents complied as to form in all material respect applicable
accounting requirements and the published rules and regulations of the SEC respect thereto. Such financial statements have been
prepared in accordance with United generally accepted accounting principles, consistently applied, during the periods involve
fairly present in all material respects the consolidated financial position of the Company consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to year-end audit adjustments). Except as set forth in the financial statements of the Co included in
the SEC Documents, the Company has no liabilities, contingent or otherwise other than (i) liabilities incurred in the ordinary
course of business subsequent to February 28, 2014, and (ii) obligations under contracts and commitments incurred in the ordinary
course of b and not required under generally accepted accounting principles to be reflected in such fi statements, which, individually
or in the aggregate, are not material to the financial condition operating results of the Company. The Company is subject to the
reporting requirements 1934 Act.


 


h.                 
Absence of Certain Changes. Since February 28, 2014, there
has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations,
financial condition, results of operations, prospects or 193 Act reporting status of the Company or any of its Subsidiaries.


 


i.                   
Absence of Litigation. There is no action, suit, claim, proceeding,
inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries,
or their offices or directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete
list and summary description of any pending or, to the knowledge the Company, threatened proceeding against or affecting the Company
or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company a d its Subsidiaries
are unaware of any facts or circumstances which might give rise to any the foregoing.


 


j.                   
Patents, Copyrights, etc. The Company and each its Subsidiaries
owns or possesses the requisite licenses or rights to use all patents, applications, patent rights, inventions, know-how, trade
secrets, trademarks, trade applications, service marks, service names, trade names and copyrights ("Intellectual Property")
necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future);
there is no claim or action by any person pe1iaining to, or proceeding pending, or to the Company's knowledge threatened, which
challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct
its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company's knowledge,
the Company's or its Subsidiaries' current and intended products, services and processes do not infringe on any Intellectual Property
or other right held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the
foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of their Intellectual Property.


 


k.                 
No Materially Adverse Contracts, Etc. Neither the Comp nor
any of its Subsidiaries is subject to any charter, corporate or other legal restriction, judgment, decree, order, rule or regulation
which in the judgment of the Company's office or is expected in the future to have a Material Adverse Effect. Neither the Company
nor its Subsidiaries is a party to any contract or agreement which in the judgment of the Com officers has or is expected to have
a Material Adverse Effect.


 


l.                   
Tax Status. The Company and each of its Subsidiaries has
made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books
provisions reasonably adequate payment of all unpaid and unreported taxes) and 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, except those
being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.
The Company has not executed a with respect to the statute of limitations relating to the assessment or collection of any foreign
federal, state or local tax. None of the Company's tax returns is presently being audited by taxing authority.


 


m.               
Certain Transactions. Except for arm's length transactions
pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary of business upon terms no less favorable
than the Company or any of its Subsidiaries obtain from third parties and other than the grant of stock options disclosed on Schedule
none of the officers, directors, or employees of the Company is presently a party t transaction with the Company or any of its
Subsidiaries (other than for services as employees officers and directors), including any contract, agreement or other arrangement
providing furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, the knowledge of the Company, any corporation, partnership, trust
or other entity in which officer, director, or any such employee has a substantial interest or is an officer, director, or partner.



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n.                 
Disclosure. All information relating to or concerning the
Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise
in connection with the transactions contemplated her by is true and correct in all material respects and the Company has not omitted
to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under
which they were made, not misleading. No event or circumstance occurred or exists with respect to the Company or any of its Subsidiaries
or its or their business, properties , prospects, operations or financial conditions, which, under applicable law, r le or regulation,
requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming
for this purpose that the Company's report filed under the 1934 Act are being incorporated into an effective registration statement
filed by the Company under the 1933 Act).


 


o.                 
Acknowledgment Regarding Buyer' Purchase of Securities. The
Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm's length purchasers with respect to this
Agreement and the transactions contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated
hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement
and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer' purchase the
Securities. The Company further represents to the Buyer that the Company's decision to into this Agreement has been based solely
on the independent evaluation of the Company representatives.


 


p.                 
No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security
or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance
of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance the
Company's securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or
its securities.


 


q.                 
No Brokers. The Company has taken no action which would rise
to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions
contemplated hereby.


 


r.                   
Permits; Compliance. The Company and each of its Subsidiaries
is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted
(collectively, the "Company Permits"), and there is no action pending or, to the knowledge of the Company, threatened
regarding suspension or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict
with, or in default or violation of, any of the Co Permits, except for any such conflicts, defaults or violations which, individually
or aggregate, would not reasonably be expected to have a Material Adverse Effect. Since Fe 28, 2014, neither the Company nor any
of its Subsidiaries has received any notification respect to possible conflicts, defaults or violations of applicable laws, except
for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material
Adverse Effect.


 


s.                  
Environmental Matters.


 


(i)                  
There are, to the Company's knowledge, with respect
to the Company or any of its Subsidiaries or any predecessor of the Company, no past or violations of Environmental Laws (as defined
below), releases of any material in environment, actions, activities, circumstances, conditions, events, incidents, or contractual
obligations which may give rise to any common law environmental liability or any liability under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor
any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company's
knowledge, threatened in connection with any of the foregoing. The term "Environmental Laws" means all federal, state,
local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata), including, without limitation laws relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes
(collectively, "Hazardous Materials") into the environment, or otherwise relating to the manufacture, processing, distribution
use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees,
demands or demand letters, injunctions, judgments, lie notices or notice letters, orders, permits, plans or regulations issued,
entered, promulgated approved thereunder.



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(ii)                
Other than those that are or were stored, used or
disposed of in compliance with applicable law, no Hazardous Materials are contained on or about an real property currently owned,
leased or used by the Company or any of its Subsidiaries, a d no Hazardous Materials were released on or about any real property
previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, or used by
the Company or any of its Subsidiaries, except in the normal course of the Company's or any of its Subsidiaries' business.


 


(iii)               
There are no underground storage tanks on or und
real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with applicable law.


 


t.                   
Title to Property. The Company and its Subsidiaries have
good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them
which is material to the business of the Company d its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such s are described in Schedule 3(t) or such as would not have a Material Adverse Effect. Any real property and
facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as would not have a Material Adverse Effect.


 


u.                 
Insurance. The Company and each of its Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company
nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect. Upon written request the Company will provide to the Buyer true and correct copies
of all policies relating to directors' and officers' liability coverage, errors and omissions coverage and commercial general
liability coverage.


 


v.                 
Internal Accounting Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment Company's board of directors, to provide
reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii)
transaction are recorded as necessary to permit preparation of financial statements in conformity with gen rally accepted accounting
principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general
or specific authorization and (I the recorded accountability for assets is compared with the existing assets at reasonable interval
and appropriate action is taken with respect to any differences.


 


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



    	7



    	 



    




 


x.                 
Solvency. The Company (after giving effect to the transactions
contemplated by this Agreement) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay
its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information
that would lead it to reasonably conclude that the Company would not, after giving effect to the transaction contemplated this
Agreement, have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time
to time incurred in connection therewith as such debts mature The Company did not receive a qualified opinion from its auditors
with respect to its most recent fiscal year end and, after giving effect to the transactions contemplated by this Agreement does
not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.


 


y.                 
No Investment Company. The Company is not, and up the issuance
and sale of the Securities as contemplated by this Agreement will not be an "investment company" required to be registered
under the Investment Company Act of 1940 (an "Investment Company"). The Company is not controlled by an Investment Company.


 


z.                   Breach
of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set
forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement , it will be
considered an Event of default under Section 3.4 of the Note.


 


4.                  
COVENANTS.


 


a.                  
Best Efforts. The parties shall use their best efforts to
satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.


 


b.                 
Form D; Blue Sky Laws. The Company agrees to file a Form
D with respect to the Securities as required under Regulation D and to provide a copy thereof Buyer promptly after such filing.
The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify
the Securities for sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or "blue
sky" laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence
of any such action so taken to the Buyer on or prior the Closing Date.


 


c.                  
Use of Proceeds. The Company shall use the proceeds for general
working capital purposes.


 


d.                 
Right of First Refusal. Unless it shall have first delivered
the Buyer, at least seventy two (72) hours prior to the closing of such Future Offering (as defined herein), written notice describing
the proposed Future Offering ("ROFR Notice"), including the terms and conditions thereof, identity of the proposed purchaser
and proposed definitive documentation to be entered into in connection therewith, and providing the Buyer an option during the
seventy two (72) hour period following delivery of such notice to purchase the securities being offered in the Future Offering
on the same terms as contemplated by such Offering (the limitations referred to in this sentence and the preceding sentence are
collectively referred to as the "Right of First Refusal") (and subject to the exceptions described below Company will
not conduct any equity (or debt with an equity component) financing in an a less than $100,000 ("Future Offering(s) ")
during the period beginning on the Closing Da ending six (6) months following the Closing Date. Notwithstanding anything contained
he in to the contrary, the Company shall not consummate any Future Offering with an investor, or an affiliate of such investor
(collectively "Prospective Investor"), identified on an ROFR Notice whereby the Buyer exercised its Right of First Refusal
for a period of forty (45) days following such exercise; and any subsequent offer by a Prospective Investor is subject to this
Section 4(d) and the Right of First Refusal. In the event the terms and conditions of a proposed future Offering are amended in
any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new
notice to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall
have an option during the seventy two (72) hour period following delivery of such new no ice to purchase its pro rata share of
the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence
shall apply to such amendments to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall not
apply to any transaction involving (i) issuances of securities in a commitment underwritten public offering (excluding a continuous
offering pursuant to Rule under the 1933 Act) or (ii) issuances of securities as consideration for a merger, consolidate purchase
of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity
capital), or in connection with the disposition acquisition of a business, product or license by the Company. The Right of First
Refuse shall not apply to the issuance of securities upon exercise or conversion of the Company’s options, warrants or other
convertible securities outstanding as of the date hereof or to the of additional options or warrants, or the issuance of additional
securities, under any Company stock option or restricted stock plan approved by the shareholders of the Company.



    	8



    	 



    




 


e.                  
Expenses. At the Closing, the Company shall reimburse Bu
r for expenses incurred by them in connection with the negotiation, preparation , execution, delivery and performance of this
Agreement and the other agreements to be executed in connection herewith ("Documents "), including, without limitation,
reasonable attorneys' and consultants' fees and expenses, transfer agent fees, fees for stock quotation services, fees relating
to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation
of opinions of counsel, escrow fees, and co restructuring the transactions contemplated by the Documents. When possible, the Company
must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and
expenses immediately upon written notice y the Buyer or the submission of an invoice by the Buyer. The Company's obligation with
respect to this transaction is to reimburse Buyer' expenses shall be $3,000.


 


f.                  
Financial Information. Upon written request the Company to
send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all of the Securities:
(i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly Reports on Form
10-Q and any Current Rep s on Form 8-K; (ii) within one (1) day after release, copies of all press releases issued the Company
or any of its Subsidiaries; and (iii) contemporaneously with the making avail le or giving to the shareholders of the Company,
copies of any notices or other information the Company makes available or gives to such shareholders.


 


g.                  
[INTENTIONALLY DELETED]


 


h.                 
Listing. The Company shall promptly secure the listing Conversion
Shares upon each national securities exchange or automated quotation system, upon which shares of Common Stock are then listed
(subject to official notice of issuance so long as the Buyer owns any of the Securities, shall maintain, so long as any other
shares Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the
Note. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common
Stock on the OTC or any equivalent replacement exchange, the Nasdaq National Market ("Nasdaq"), the Nasdaq SmallCap
Market ("Nasdaq SmallCap"), the New York Stock Exchange ("NYSE"), the American Stock Exchange ("AMEX")
and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the Financial
Industry Regulatory Authority ("FINRA") and such exchanges, as applicable. The Company shall promptly provide to the
Buyer copies of any notices it receives from the OTCBB and any other exchanges or quotation systems on which the Common Stock
is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.


 


i.                   
Corporate Existence. So long as the Buyer beneficially o
Note, the Company shall maintain its corporate existence and shall not sell all or substantia of the Company's assets, except
in the event of a merger or consolidation or sale of substantially all of the Company's assets, where the surviving or successor
entity in such transaction (i) assumes the Company's obligations hereunder and under the agreement and instruments entered into
in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCBB, Nasdaq,
Nasdaq SmallCap, NY E or AMEX.


 


j.                   
No Integration. The Company shall not make any offers or
sales of any security (other than the Securities) under circumstances that would require registration of the Securities being
offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering
of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.


 


k.                 
Breach of Covenants. If the Company breaches any the covenants
set forth in this Section 4, and in addition to any other remedies available to the pursuant to this Agreement, it will be considered
an event of default under Section 3.4 Note.



    	9



    	 



    




 


l.                   
Failure to Comply with the 1934 Act. So long as the Buyer
beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue
to be subject to the reporting requirements of the 1934 Act.


 


m.               
Trading Activities. Neither the Buyer nor its affiliates
has an open short position in the common stock of the Company and the Buyer agree that it shall not, that it will cause its affiliates
not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.


 


5.                  
Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer
agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as
specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the
"Irrevocable Transfer Agent Instructions"). In the event that the Borrower proposes to replace its transfer agent, the
Borrower shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions
in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably
reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior
to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to
Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all
such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i)
no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer instructions
to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion Shares under
the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number
of Securities as of a particular date that can then be immediately sold), will be given by the Company to its transfer agent and
that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided
this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or impair, and/or hinder its transfer
agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued
to the Buyer upon conversion otherwise pursuant to the Note as and when required by the Note and this Agreement; and will not
fail to remove (or directs its transfer agent not to remove or impairs, delays, hinders its transfer agent from removing) any
restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares
issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note a this Agreement. Nothing
in this Section shall affect in any way the Buyer's obligation and agreement set forth in Section 2(g) hereof to comply with all
applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the Company, t the
cost of the Buyer, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions
, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such
sale or transfer is effected r (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule
144, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to
issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the Co acknowledges that the remedy at law for a
breach of its obligations under this Section 5 inadequate and agrees, in the event of a breach or threatened breach by the Company
provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining
any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security
being required. 


 


6.                  
Conditions to the Company's Obligation to Sell. The obligation the Company hereunder to issue
and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following
conditions thereto, provided that these conditions are for the Company's sole benefit and may be waived by the Comp y at any time
in its sole discretion: same to the Company. 


 


a.                  
The Buyer shall have executed this Agreement and delivered the same to the Company.


 


b.                  
The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.



    	10



    	 



    




 


c.                   
The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date
, and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed , satisfied or complied with by the Buyer at or prior to the Closing Date.


 


d.                  
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.


 


7.                 
Conditions to The Buyer's Obligation to Purchase.
The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing
Date of each of the following conditions, provided that these conditions are for the Buyer's sole benefit and may be waived by
the Buyer at any time in its sole discretion:


 


a.                  
The Company shall have this Agreement and delivered the same to the Buyer.


 


b.                  
The Company shall have delivered to the Buyer the duly executed
Note (in such denominations as the Buyer shall request) in accordance with Section l (b) above.


 


c.                   
The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Buyer, shall
have been delivered to and acknowledged in writing by the Company's Transfer Agent.


 


d.                  
The representations and warranties of the Company shall be true and correct in all material respects as of the date when made
and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific
date) and the Company shall have performed , satisfied and complied in all material respect with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.
The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as
of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including,
but not limited to ce1iificates with respect to the Com Certificate of Incorporation, By-laws and Board of Directors’ resolutions
relating to transactions contemplated hereby.


 


e.                   
No litigation, statute, rule, regulation , executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.


 


f.                   
No event shall have occurred which could reasonably be ex to have a Material Adverse Effect on the Company including but not limited
to a change 1934 Act reporting status of the Company or the failure of the Company to be timely in it Act reporting obligations.


 


g.                   
The Conversion Shares shall have been authorized for quotation on the OTCBB and trading in the Common Stock on the OTCBB shall
not have been suspended by the SEC or the OTCBB.


 


h.                  
The Buyer shall have received an officer's certificate described in Section 3(c) above, dated as of the Closing Date.


 


8.                 
Governing Law; Miscellaneous.


 


a.                  
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county
of Nassau. The parties this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or venue or have based upon forum non conveniens.
The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable
attorney's fees and cost. In the event that any provision of this Agreement or any other agreement delivered in connection herewith
is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision
which prove invalid or unenforceable under any law shall not affect the validity or enforceability other provision of any agreement.
Each party hereby irrevocably waives personal service process and consents to process being served in any suit, action or proceeding
in connection this Agreement or any other Transaction Document 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.



    	11



    	 



    




 


b.                  
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but
all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party.


 


c.                   
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.


 


d.                  
Severability. In the event that any provision of this Agree invalid or unenforceable under any applicable statute or rule
of law, then such provisions deemed inoperative to the extent that it may conflict therewith and shall be deemed modified conform
with such statute or rule of law. Any provision hereof which may proves invalid unenforceable under any law shall not affect the
validity or enforceability of any other pro hereof.


 


e.                   
Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of
the parties with respect matters covered herein and therein and, except as specifically set forth herein or therein, either the
Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.


 


f.                   
Notices. All notices, demands, requests, consents, approval , and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested , postage prepaid , (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, or facsimile, addressed s set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated bel w (if delivered on a business day during normal business hours where
such notice is to be received ), or the first business day following such delivery (if delivered other than on a business day
ring normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid , addressed to such address, or upon actual receipt of such mailing, whichever shall
first occur. The address s for such communications shall be:


 


If
to the Company, to:


IDS
INDUSTRIES, INC.


533
Birch Street


Lake
Elsinore, CA 92530


Attn:
SCOTT PLANTINGA, Chief Executive Officer


facsimile:
[enter fax number]


 


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


[enter
name of law firm]


Attn:
[attorney name]


[enter
address line 1]


[enter
city, state, zip]


facsimile:
[enter fax number]



    	12



    	 



    

 


If
to the Buyer:


KBM
WORLDWIDE, INC.


80
Cuttermill Road –


Suite
410 Great Neck, NY 11021


Attn:
Seth Kramer, President


e-mail:
info@kwbmlaw.com


 


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


Naidich
Wurman Birnbaum & Maday LLP


Attn:
Bernard S. Feldman, Esq.


acsimile:
516-466-3555


e-mail:
dyork@nwbmlaw.com


 


Each
party shall provide notice to the other party of any change in address.


 


g.                   
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the
prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the may assign its rights hereunder
to any person that purchases Securities in a private transaction from the Buyer or to any of its "affiliates," as that
term is defined under the 1934 Act, without the consent of the Company.


 


h.                  
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is t for the benefit of, nor may any provision hereof be enforced by, any other person.


 


i.                    
Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement
shall survive the closing here notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. Company
agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising
as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants
set forth this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they
are incurred.


 


j.                    
Publicity. The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any
press releases, SEC, OTCBB or FINRA filings, or any other public statements with respect to the transactions contemplated hereby;
provided, however , that the Company shall be entitled, without the prior approval of the Buyer, to make any press
release or SEC, OTCBB (or other applicable trading market) or FINRA filings with respect to such transactions as is required by
applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release
prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).


 


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


 


l.                    
No Strict Construction. The language used in this Agreement be deemed to be the language chosen by the parties to express
their mutual intent, and no les of strict construction will be applied against any party.


 


m.                
Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other
available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this Agreement and to enforce specifically terms and provisions hereof, without the necessity
of showing economic loss and without bond or other security being required.



    	13



    	 



    




 


IN
WITNESS WHEREOF, the undersigned Buyer and the Company have cause this Agreement to be duly executed as of the date first above
written.


 


	IDS
    INDUSTRIES, INC.
	
	By:
    /s/ Scott Plantinga
	Scott
    Plantinga
	Chief
    Executive Officer
	
	KBM
    WORLDWIDE, INC.
	
	By:
    /s/ Seth Kramer
	Seth
    Kramer
	President
	80
    Cuttermill Road – Suite 410
	Great
    Neck, NY 11021


 


 


	AGGREGATE
                           SUBSCRIPTION AMOUNT:

         
	
	Aggregate
    Principal Amount of Note:	$53,000.00
	Aggregate
    Purchase Price:	$53,000.00


 








    	14