Document:

Exhibit 10.1

 

AMENDMENT NO. 6 TO CREDIT AGREEMENT
AND 

EXTENSION AND DECREASE AGREEMENT

 

This AMENDMENT NO.
6 TO CREDIT AGREEMENT AND EXTENSION AND DECREASE AGREEMENT, dated as of July 2, 2015 (this “Amendment”), is
by and among ENBRIDGE ENERGY PARTNERS, L.P., a Delaware limited partnership (the “Borrower”), each Person designated
on the signature pages hereto as an “Extending Lender” (collectively, the “Extending Lenders”),
each Person designated on the signature pages hereto as a “New Lender” (collectively, the “New Lenders”),
each Person designated on the signature pages hereto as an “Exiting Lender” (collectively, the “Exiting Lenders”)
and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”), a Swing Line Lender and an L/C Issuer.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower,
the Exiting Lenders, the Extending Lenders and the Administrative Agent are parties to that certain Credit Agreement, dated as
of July 6, 2012 (as heretofore amended, supplemented or otherwise modified, the “Credit Agreement”);

 

WHEREAS, pursuant to
Section 2.14 of the Credit Agreement, the Borrower has requested that the Revolving Credit Commitment Termination Date for
each Lender be extended to the date that is 364 days after the Revolving Credit Commitment Termination Date in effect immediately
prior to giving effect to this Amendment (the “Extension”);

 

WHEREAS, the Aggregate
Commitments will be decreased to $525,000,000;

 

WHEREAS, the Borrower
has requested that certain provisions of the Credit Agreement be amended, as more fully provided herein; and

 

WHEREAS, the parties
hereto are willing to agree to the foregoing, subject to the terms and conditions set forth herein;

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:

 

SECTION
1. Definitions. Unless otherwise defined in this Amendment, capitalized terms used in this Amendment which are defined
in the Credit Agreement, as amended hereby (the “Amended Credit Agreement”), shall have the meanings assigned
to such terms in the Amended Credit Agreement. The interpretive provisions set forth in Section 1.02 of the Credit Agreement shall
apply to this Amendment.

 

SECTION
2. Extension of Revolving Credit Commitment Termination Date. Each Extending Lender and each New Lender hereby (a) agrees
to the Extension and (b) agrees that, effective as of the date hereof, the Revolving Credit Commitment Termination Date with respect
to such Person’s Commitment shall be July 1, 2016 (which is the day that is 364 days after the Revolving Credit Commitment
Termination Date in effect on the date hereof immediately prior to giving effect to this Amendment). 

 

    	 

    	 

    

 

SECTION
3. New Lenders; Termination of Commitments of Exiting Lenders. 

 

Effective
as of the date hereof:

 

(a)each
New Lender hereby (i) provides a Commitment equal to the amount set forth opposite such New Lender’s name on Schedule
2.01(a) attached hereto and (ii) becomes a Lender under the Amended Credit Agreement (as it may be further amended, restated,
supplemented or otherwise modified from time to time) for all purposes to the same extent as if originally a party thereto and
shall be bound thereby and entitled to the benefits thereof; and

 

(b)the
Commitment of each Exiting Lender is hereby terminated in full and each Exiting Lender shall cease to be a party to the Credit
Agreement and shall no longer be a Lender. Each Exiting Lender joins in the execution of this Amendment solely for the purposes
of acknowledging the termination of its Commitment pursuant to this Section 3(b).

 

For the avoidance of
doubt, the decrease in the Aggregate Commitments pursuant to this Section 3 shall not affect the Borrower exercising its rights
under Section 2.15 of the Credit Agreement.

 

SECTION
4. Amendments to the Credit Agreement. The Credit Agreement is hereby amended as
follows:

 

(a)Cover
Page. The cover page to the Credit Agreement is hereby amended by replacing such cover page in its entirety with Exhibit
A attached hereto.

 

(b)Section
1.01 - “Applicable Rate”. The definition of the term “Applicable Rate” contained in Section 1.01 of
the Credit Agreement is hereby amended to read as follows:

 

“Applicable
Rate” means the following percentages per annum, based upon the Debt Rating as set forth below:

 

	Applicable Rate
	Pricing Level	Debt Ratings S&P/Moody’s	Applicable Rate for Facility Fee Rate	Applicable Rate for Eurodollar Rate Loans and Letters of Credit	Applicable Rate 

for Base Rate Loans and Swing Line Loans at Base Rate
	 	 	 	 	 
	1	A/A2 or higher	0.075%	0.800%	0.000%
	2	A-/A3	0.100%	0.900%	0.000%
	3	BBB+/Baa1	0.125%	1.000%	0.000%
	4	BBB/Baa2	0.150%	1.100%	0.100%
	5	BBB-/Baa3 or lower or unrated	0.200%	1.300%	0.300%

 

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(a)Section
1.01 - “Arranger”. The definition of the term “Arranger” contained in Section 1.01 of the Credit Agreement
is hereby amended to read as follows:

 

“Arranger”
means J.P. Morgan Securities LLC, in its capacities as arranger and bookrunner.

 

(b)Section
1.01 - “FATCA”. The definition of the term “FATCA” contained in Section 1.01 of the Credit Agreement
is hereby amended to read as follows:

 

“FATCA”
Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof,
any agreement entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection
with the implementation of such sections of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant
to such intergovernmental agreement.

 

(c)Arrangers.
(i) Each reference in the Credit Agreement to “Arrangers” is hereby amended to refer to “Arranger” and
(ii) each reference in the Credit Agreement to “each Arranger” or “any Arranger” is hereby amended to refer
to “the Arranger”.

 

(d)Section
3.01(e)(iii). Section 3.01(e)(iii) of the Credit Agreement is hereby amended by adding the following sentence at the end thereof:

 

For purposes
of determining withholding Taxes imposed under FATCA, from and after July 2, 2015, the Borrower and the Administrative Agent shall
treat (and the Lenders hereby authorize the Administrative Agent and the Borrower to treat) this Agreement and the Loans as not
qualifying as “grandfathered obligations” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

 

(e)Schedule
2.01(a). Schedule 2.01(a) of the Credit Agreement is hereby amended by replacing such schedule in its entirety with Schedule
2.01(a) attached hereto.

 

SECTION
5. Representations and Warranties.

 

To induce the other parties
hereto to enter into this Amendment, the Borrower represents and warrants that, as of the date hereof:

 

(a)both immediately
before and after giving effect to this Amendment, all representations and warranties of the Borrower contained in Article V
of the Credit Agreement, and which are contained in any Loan Document furnished by the Borrower at any time under, or in connection
with, this Amendment or the Credit Agreement, are true and correct, except to the extent that such representations and warranties
specifically refer to a different date, in which case they are true and correct as of such date and except that the representations
and warranties contained in clauses (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01
of the Credit Agreement;

 

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(b)both immediately
before and after giving effect to this Amendment, no Default or Event of Default exists;

 

(c)the execution,
delivery and performance by the Borrower of this Amendment and the performance by the Borrower of the Amended Credit Agreement
have been duly authorized by all necessary corporate or other organizational action, and do not and will not (i) violate the
terms of any of the Borrower’s Organization Documents, (ii) result in any breach of, constitute a default under, or
require, pursuant to the express provisions thereof, the creation of any consensual Lien on the properties of the Borrower under,
any Contractual Obligation to which the Borrower is a party or any order, injunction, writ or decree of any Governmental Authority
to which the Borrower or its property is subject, or (iii) violate any Law, in each case with respect to the preceding clauses (i)
through (iii), which would reasonably be expected to have a Material Adverse Effect;

 

(d)this Amendment
and the Amended Credit Agreement constitute legal, valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their terms, subject as to enforcement to bankruptcy, insolvency, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors’ rights and to general equity principles; and

 

(e)no approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is required to be obtained
or made by the Borrower by any material statutory law or regulation applicable to it as a condition to the execution, delivery
or performance by, or enforcement against, the Borrower of this Amendment or the performance by, or enforcement against, the Borrower
of the Amended Credit Agreement.

 

SECTION
6. Conditions to Effectiveness. This Amendment shall become effective as of the date first written above when, and only
when,

 

(a)the
Administrative Agent shall have received:

 

(i)
counterparts of this Amendment duly executed and delivered by each party hereto;

 

(ii)an
opinion of counsel to the Borrower addressed to the Administrative Agent and each Lender party to the Amended Credit Agreement,
in form and substance reasonably satisfactory to the Administrative Agent as to such customary matters regarding this Amendment
and the Amended Credit Agreement as the Administrative Agent may reasonably request;

 

(iii)such
certificates of resolutions or other action, incumbency certificates and/or other certificates of the secretary or an assistant
secretary of the General Partner or the Delegate, as the Administrative Agent may require to establish the identities of and verify
the authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this
Amendment and the Amended Credit Agreement; 

 

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(iv)a
certificate dated as of the date hereof signed by a Responsible Officer of the Borrower certifying as to the matters set forth
in Section 5(a) and Section 5(b) above;

 

(v)such
evidence as the Administrative Agent may reasonably request to verify that the Borrower is duly organized or formed, validly existing
and in good standing in the jurisdiction where organized; and

 

(b)the Borrower shall have (i)
paid all fees it has agreed to pay in connection with this Amendment, including, without limitation, the fees set forth in that
certain fee letter dated June 18, 2015, by and among the Borrower, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC, and
(ii) reimbursed or paid, to the extent timely invoiced to, and reviewed by, the Borrower, all out-of-pocket expenses required to
be reimbursed or paid by the Borrower under the Credit Agreement.

 

SECTION
7. Governing Law. 

 

THIS AMENDMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.

 

SECTION
8. Counterparts. 

 

This Amendment may be
executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument. Delivery of a counterpart to this Amendment
may be made by facsimile or other electronic transmission in .pdf format.

 

SECTION
9. Effect of Amendment. 

 

From and after the effectiveness
of this Amendment, each reference to “hereof”, “hereunder”, “herein” and “hereby”
and each other similar reference and each reference to “this Agreement” and each other similar reference contained
in the Credit Agreement shall refer to the Amended Credit Agreement. Except as expressly set forth herein, this Amendment shall
not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Administrative
Agent or the Lenders under the Credit Agreement or under any other Loan Document, and shall not alter, modify, amend or in any
way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan
Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. This Amendment shall
constitute a Loan Document for all purposes of the Credit Agreement and the other Loan Documents.

 

SECTION
10. Confirmation of Loan Documents. 

 

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The terms, provisions,
conditions and covenants of the Amended Credit Agreement and the other Loan Documents remain in full force and effect and are hereby
ratified and confirmed in all respects, and the execution, delivery and performance of this Amendment shall not, except as expressly
set forth in this Amendment, operate as a waiver of, consent to or amendment of any term, provision, condition or covenant thereof.
Without limiting the generality of the foregoing, nothing contained herein shall be deemed (a) to constitute a waiver of compliance
or consent to noncompliance by the Borrower with respect to any term, provision, condition or covenant of the Credit Agreement
or any other Loan Document, (b) to prejudice any right or remedy that the Administrative Agent or any Lender may now have or may
have in the future under or in connection with the Amended Credit Agreement or any other Loan Document; or (c) to constitute a
waiver of compliance or consent to noncompliance by the Borrower with respect to the terms, provisions, conditions and covenants
of the Amended Credit Agreement and the other Loan Documents made the subject hereof. The Borrower represents and acknowledges
that it has no claims, counterclaims, offsets, credits or defenses to the Loan Documents or the performance of its obligations
thereunder.

 

SECTION
11. Headings. 

 

Section and subsection
headings in this Amendment are for convenience of reference only, and are not part of, and are not to be taken into consideration
in interpreting, this Amendment.

 

SECTION
12. Entire Agreement. 

 

THIS
AMENDMENT, THE AMENDED CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Remainder of Page Intentionally Left
Blank; Signature Pages Follow]

  

IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed as of the date first above written.

 

	 	ENBRIDGE ENERGY PARTNERS, L.P.,
	 	a Delaware limited partnership, as Borrower
	 	 

	 	By:	ENBRIDGE ENERGY MANAGEMENT, L.L.C.,	 
	 	 	as delegate of Enbridge Energy Company, Inc.,	 
	 	 	its General Partner	 
	 	 	 	 	 
	 	 	By:	/s/ Mark A. Maki	 
	 	 	Name:	Mark A. Maki	 
	 	 	Title:	President	 
	 	 	 	 	 

 

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JPMORGAN CHASE BANK, NATIONAL 

ASSOCIATION, as Administrative
Agent, an 

Extending Lender, an L/C Issuer and a Swing Line Lender

 

 

		By:	    /s/ Jay Javellana                        

                                         Name: Jay Javellana

                                         Title: Executive Director

 

Amendment No. 6 to Credit Agreement and Extension and Decrease
Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

 

SUMITOMO MITSUI BANKING 

CORPORATION, as an Extending
Lender

 

 

		By:	    /s/ James D. Weinstein                     

                                         Name: James D. Weinstein

                                         Title: Managing Director

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

 

BARCLAYS BANK PLC,

as an Extending Lender

 

 

		By:	    /s/ Vanessa Kurbatskiy                     

                                         Name: Vanessa Kurbatskiy

                                         Title: Vice President

 

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

CRÉDIT AGRICOLE CORPORATE AND 

INVESTMENT BANK,
as an Extending Lender

 

 

		By:	    /s/ Juliette Cohen                

                                         Name: Juliette Cohen

                                         Title: Managing Director

 

 

		By:	    /s/ Gordon Yip                     

                                         Name: Gordon Yip

                                         Title: Director

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

BANK OF AMERICA, N.A.,

as an Extending Lender

 

 

		By:	    /s/ Marc Ahlers                       

                                         Name: Marc Ahlers

                                         Title: Vice President

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

CREDIT SUISSE AG, TORONTO BRANCH,

as an Extending Lender

 

 

		By:	    /s/ Ahain Daoust                

Name: Ahain Daoust

Title: Authorized Signatory

 

 

		By:	    /s/ Chris Gage                      

                                         Name: Chris Gage

                                         Title: Authorized Signatory

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

 

BRANCH BANKING & TRUST
COMPANY,

as an Extending Lender

 

 

By:    /s/ DeVon J. Lang                     

Name: DeVon J. Lang

Title: Senior Vice President

 

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

 

    	 

    	 

    

BANK HAPOALIM B.M,

as an Extending Lender

 

 

		By:	    /s/ Helen H. Gateson               

                                         Name: Helen H. Gateson

                                         Title: Vice President

 

		By:	    /s/ Charles McLaughlin           

                                         Name: Charles McLaughlin

                                         Title: Senior Vice President

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

 

    	 

    	 

    

 

MIZUHO BANK, LTD., 

as a New Lender

 

 

		By:	    /s/ Brad C. Crilly                    

                                         Name: Brad C. Crilly

                                         Title: Senior Vice President

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

Bank of China, New York Branch,

as a New Lender

 

 

		By:	    /s/ Haifeng Xu                          

                                         Name: Haifeng Xu

                                         Title: Executive Vice President

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

Section 3(b) acknowledged and
agreed to by:

 

GOLDMAN SACHS BANK USA,

as an Exiting Lender

 

 

		By:	   /s/ Rebecca Kratz                    

                                         Name: Rebecca Kratz

                                         Title: Authorized Signatory

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

BNP PARIBAS, acting through its Canada Branch, 

as an
Exiting Lender

 

 

By:      /s/ Evan Ivanov                                   

           Name: Evan Ivanov

           Title: Director

 

 

By:      /s/ Zainuddin Ahmed                            

           Name: Zainuddin Ahmed

           Title: Vice President

 

 

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

U.S. BANK NATIONAL ASSOCIATION,

as an Exiting Lender

 

 

		By:	    /s/ John Prigge                    

                                         Name: John Prigge

                                         Title: Vice President

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

 

BANK OF CHINA (CANADA),

as an Exiting Lender

 

 

		By:	    /s/ Lang Rongxiang                   

                                         Name: Lang Rongxiang

                                         Title: Branch Manager

 

Amendment No. 6 to Credit Agreement and
Extension and Decrease Agreement

(Enbridge Energy Partners, L.P.)

 

    	 

    	 

    

SCHEDULE
2.01(a)

 

COMMITMENTS

AND PRO RATA SHARES

 

	Lender	 	Commitment	 	 	Pro Rata Share	 
	JPMorgan Chase Bank, National Association	 	$	75,000,000	 	 	 	14.29	%
	Sumitomo Mitsui Banking Corporation	 	$	100,000,000	 	 	 	19.05	%
	Mizuho Bank, LTD.	 	$	75,000,000	 	 	 	14.29	%
	Branch Banking & Trust Company	 	$	50,000,000	 	 	 	9.52	%
	Bank of China (New York)	 	$	50,000,000	 	 	 	9.52	%
	Barclays Bank PLC	 	$	50,000,000	 	 	 	9.52	%
	Credit Suisse AG, Toronto Branch	 	$	50,000,000	 	 	 	9.52	%
	Bank of America, N.A.	 	$	25,000,000	 	 	 	4.76	%
	Credit Agricole Corporate and Investment Bank	 	$	25,000,000	 	 	 	4.76	%
	Bank Hapoalim B.M	 	$	25,000,000	 	 	 	4.76	%
	 	 	 	 	 	 	 	 	 
	Total:	 	$	525,000,000	 	 	 	100.00	%

 

    	 

    	 

    

Exhibit A

 

COVER PAGE

 

(See attached.)

 

    	 

    	 

    

CREDIT AGREEMENT

 

Dated as of July 6, 2012

 

among

 

ENBRIDGE ENERGY PARTNERS, L.P.,

as Borrower,

 

JPMorgan
Chase Bank, National Association,

as Administrative Agent,

a Swing Line Lender

and

an L/C Issuer

 

and

 

The Lenders
Party Hereto

 

_________________________

 

J.P.
Morgan Securities LLC,

Lead Arranger and BookrunnerExhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this "Agreement")
is dated as of May ___, 2015 between Xenetic Biosciences, Inc., a Nevada corporation (the "Company"),
and the purchaser identified on the signature pages hereto (the "Purchaser").

 

WHEREAS, subject to the terms and conditions
set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities
Act"), and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchaser, and the Purchaser
desires to purchase from the Company, securities of the Company 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 the Purchaser agree as follows:

 

ARTICLE I.

DEFINITIONS

 

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

 

"Acquiring Person" shall have the meaning ascribed
to such term in Section 4.7. "Action" shall have the meaning ascribed to such term in Section 3.1(j).

 

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

 

"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.

 

"Closing Dates" means
the Trading Day(s) on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto
in connection with a Closing, and all conditions precedent to (i) the Purchaser's obligations to pay the Subscription Amount as
to such Closing and (ii) the Company's obligations to deliver the Securities as to such Closing, in each case, have been satisfied
or waived.

 

"Closing(s)" means the
one or more closings of the purchase and sale of the Securities pursuant to Section 2.2.

 

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"Closing Statement" means
the Closing Statement in the form on Annex A attached hereto.

 

"Commission" means the United States Securities
and Exchange Commission.

 

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

 

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

 

"Company Counsel" means
Person, who will be nominated by Company as counsel.

 

"Conversion Price" shall have the meaning ascribed
to such term in the Note.

 

"Conversion Shares" means
the shares of Common Stock issued and issuable upon conversion or redemption of the Note and issued and issuable in lieu of the
cash payment of interest on the Note in accordance with the terms of the Note.

 

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

 

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

 

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

 

"Exempt Issuance"
means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to
any stock or option plan duly adopted for such purpose by a majority of the non-employee members of the Board of Directors or
a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the
exercise of or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided
that such securities have not been amended since the date of this Agreement to increase the number of such securities or to
decrease the exercise price, exchange price or conversion price of such securities, (c) shares issued pursuant to any
equipment loan or leasing arrangement, reap property leasing arrangement or debt financing from a bank or similar institution
approved by a majority of the disinterested directors of the Company, (d) securities issued pursuant to acquisitions or
strategic transactions approved by a majority of the disinterested directors of the Company, and (e) shares with respect to
which the holders of a majority of the outstanding Note waive their anti-dilution rights, provided that any such issuance
shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating
company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company
additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in
securities.

 

    	2

    	 

    

 

"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).

 

"Holder" or "Holders"
means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

"Indebtedness" shall have the meaning ascribed
to such term in Section 3.1(aa).

 

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

 

"Legend Removal Date"
shall have the meaning ascribed to such term in Section 4.1(c).

 

"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(m).

 

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

 

"Note" means the Ten Percent
(10%) Senior Secured Collateralized Convertible Promissory Note due, subject to the terms therein, twelve (12) months from its
date of issuance, issued by the Company to the Purchaser hereunder, in the form of Exhibit A attached hereto.

 

"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.

 

"Principal Amount" means,
as to the Purchaser, the amount set forth below the Purchaser's signature block on the signature pages hereto next to the heading
"Subscription Amount/Principal Amount," in United States Dollars, which shall equal the Purchaser's Subscription Amount
as to the Closing.

 

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"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.

 

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

 

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

 

"Public Offering Price"
shall mean the most recent price at which Common Stock or Common Stock Equivalents were sold in a Public Offering (as defined in
Section 2.5).

 

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

 

"Registrable Securities"
means, as of any date of determination, (a) all of the shares of Common Stock then issued and issuable upon conversion in full
of the Note (assuming on such date the Note are converted in full without regard to any conversion limitations therein), (b) all
shares of Common Stock issued and issuable as interest or principal on the Note assuming all permissible interest and principal
payments are made in shares of Common Stock and the Note is held until maturity, (c) all of the Warrant Shares then issued and
issuable upon exercise of the Warrants (assuming on such date the Warrants are exercised in full without regard to any exercise
limitations therein), (d) any additional shares of Common Stock issued and issuable in connection with any anti-dilution provisions
in the Note or the Warrants (in each case, without giving effect to any limitations on conversion set forth in the Note or limitations
on exercise set forth in the Warrants) and (e) any securities issued or then issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable Securities
shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another,
Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of
such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have
been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been
previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale
restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect,
addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities
issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable,
were at no time held by any Affiliate of the Company), as reasonably determined by the Company, upon the advice of counsel to the
Company.

 

"Registration Rights Agreement"
means the Registration Rights Agreement, dated the date hereof, among the Company and the Purchaser, in the form of Exhibit
B attached hereto.

 

"Registration Statement"
means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale
of the Underlying Shares by the Purchaser as provided for in the Registration Rights Agreement.

 

    	4

    	 

    

 

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

 

"Required Minimum" means,
as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant
to the Transaction Documents, including any Underlying Shares issuable upon conversion in full of all Notes (including Underlying
Shares issuable as payment of interest on the Note) and upon exercise in full of all Warrants (including any additional Warrants
issuable pursuant to Sections 2.1 or 2.5 hereof), ignoring any conversion or exercise limits set forth therein, and assuming that
the Conversion Price is at all times on and after the date of determination 100% of the then Conversion Price on the Trading Day
immediately prior to the date of determination.

 

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

 

"SEC Reports" shall have the meaning ascribed
to such term in Section 3.1(h). "Securities" means the Note, the Warrant, and the Underlying Shares.

 

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

 

"Securities Effective Date"
means the earliest of the date that (a) the initial Registration Statement has been declared effective by the Commission, (b) all
of the Registrable Securities have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for
the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale
restrictions or (c) following the one year anniversary of the Closing Date provided that a holder of Registrable Securities is
not an Affiliate of the Company, all of the Registrable Securities may be sold pursuant to an exemption from registration under
Section 4(1) of the Securities Act without volume or manner-of-sale restrictions and Company counsel has delivered to such holders
a standing written unqualified opinion that resales may then be made by such holders of the Registrable Securities pursuant to
such exemption which opinion shall be in form and substance reasonably acceptable to such holders.

 

    	5

    	 

    

 

"Security Agreement" means
the Security Agreement, dated the date hereof, among the Company and the Purchaser, in the form of Exhibit E attached hereto.

 

"Security Documents" shall
mean the Security Agreement, the Subsidiary Guarantee, and any other documents and filing required thereunder in order to grant
the Purchaser a first priority security interest in the assets of the Company and the Subsidiaries as provided in the Security
Agreement, including all UCC-1 filing receipts.

 

"Short Sales" means all
"short sales" as defined in Rule 200 of Regulation SHO under the Exchange Act.

 

"Subscription Amount"
means, as to the Purchaser, the aggregate amount to be paid for the Note and Warrant purchased hereunder as specified below the
Purchaser's name on the signature page of this Agreement and next to the heading "Subscription Amount/Principal 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.

 

"Subsidiary Guarantee"
means the Subsidiary Guarantee, dated the date hereof, by each Subsidiary in favor of the Purchaser, in the form of Exhibit
F attached hereto.

 

"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 MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or
the OTC Markets or Bulletin Board (or any successors to any of the foregoing).

 

"Transaction Documents"
means this Agreement, the Note, the Registration Rights Agreement, the Security Agreement, the Subsidiary Guarantee, the Warrant,
all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions
contemplated hereunder.

 

"Transfer Agent" means
Empire Stock Transfer the current transfer agent of the Company, with a mailing address 1859 Whitney Mesa Dr., Henderson NV, 89014
and a facsimile number of (702) 974-1444 and any successor transfer agent of the Company.

 

"Transfer Agent Instruction Letter"
means the letter from the Company to the Transfer Agent which instructs the Transfer Agent to issue Underlying Shares pursuant
to the Transaction Documents, in the form of Exhibit D attached hereto.

 

"Underlying Shares" means the Conversion Shares
and the Warrant Shares.

 

    	6

    	 

    

 

"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
Purchaser and consented to by the Company with such consent not to be unreasonably withheld by the Company, the fees and expenses
of which shall be paid by the Company.

 

"Warrant" means the Common
Stock Purchase Warrant, with a five (5) year term and subject to cashless exercise, and having an exercise price equal to the lesser
of: (i) $0.20 and (ii) 120% of the Public Offering Price, subject to adjustment, issued by the Company to the Purchaser hereunder,
in the form of Exhibit G attached hereto, and any additional warrants issuable pursuant to Sections 2.1 or 2.5 hereof, as
applicable.

 

"Warrant Shares" means
the shares of Common Stock issued and issuable upon exercise of the Warrant and in accordance with the terms of the Warrant, including
and shares issuable upon exercise of any additional warrants issued or issuable pursuant to Sections 2.1 or 2.5 hereof.

 

ARTICLE II.

 

PURCHASE AND SALE

 

2.1Purchase. The Purchaser will purchase an aggregate
of a minimum of $3,000,000 in Subscription Amount, corresponding to the aggregate in Principal Amount of the Note. Additionally,
along with each Note, the Purchaser shall be entitled to a Warrant to purchase [50% of the Note amount] shares of the Company's
common stock. The Warrant granted shall be in the form and on the terms as attached hereto as Exhibit G. In the event that
a Purchaser's Note remains outstanding after six (6) months from the date of issuance, the Purchaser shall be granted an additional
Warrant to purchase [additional 50% of the Note amount] shares of the Company's common stock. The Warrants granted shall be in
the form and on the terms as attached hereto as Exhibit G.

 

2.2Closing. On the Closing Date, upon the terms
and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by
the parties hereto, the Company agrees to sell, and the Purchaser agrees to purchase, the Purchaser's Closing Subscription Amount
as set forth on the signature page hereto executed by the Purchaser. At the Closing, the Purchaser shall deliver to the Company,
via wire transfer or a certified check, immediately available funds equal to the Purchaser's Subscription Amount as set forth
on the signature page hereto executed by the Purchaser, and the Company shall deliver to the Purchaser its Note and Warrant, and
the Company and the Purchaser shall deliver the other items set forth in Section 2.3 deliverable at such Closing. Upon satisfaction
of the covenants and conditions set forth in Sections 2.3 and 2.4 for the Closing, the Closing shall occur at the offices of Covington
& Burling LLP or such other location as the parties shall mutually agree.

 

    	7

    	 

    

 

2.3Deliveries.

 

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

 

(i) this Agreement duly executed by the Company;

 

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

 

(iii)the Transfer Agent Instruction Letter duly executed
by the Company and the Transfer Agent;

 

(iv)the Note with a principal amount equal to the Purchaser's
Principal Amount as to the Closing, registered in the name of the Purchaser; and

 

(v)the Security Agreement, duly executed
by the Company and each Subsidiary, along with all of the Security Documents, including the Subsidiary Guarantee, duly executed
by the parties thereto;

 

(vi)the Registration Rights Agreement
duly executed by the Company;

 

(vii)the Warrants; and

 

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

 

(i)this Agreement duly executed by the Purchaser;

 

(ii)the Purchaser's Subscription Amount as to the Closing
by wire transfer to the account specified in writing by the Company;

 

(iii)the Security Agreement duly executed by the
Purchaser; 

 

(iv)the Registration Rights Agreement duly executed by
the Purchaser; and

 

(v)a fully filled in investor questionnaire
as attached hereto as Exhibit H.

 

2.4Closing Conditions.

 

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

 

    	8

    	 

    

 

(i)the accuracy in all material respects
on the Closing Date of the representations and warranties of the Purchaser contained herein and information provided in the investor
questionnaire (unless as of a specific date therein in which case they shall be accurate as of such date);

 

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

 

(iii)the delivery by the Purchaser
of the items set forth in Section 2.3(b) of this Agreement.

 

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

 

(i)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);

 

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

 

(iii)the delivery by the Company of
the items set forth in Section 2.3(a) of this Agreement;

 

(iv)there is no existing Event of Default
(as defined in the Note) and no existing event which, with the passage of time or the giving of notice, would constitute an Event
of Default;

 

(v)the Company shall be fully current
on all SEC filings and reports and there shall be no adverse proceeding initiated, ongoing, or threatened by any governmental or
regulatory body.

 

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

 

(vii)the Company must be have complied
with SEC Reports and filings as described in Section 3.1(h); and

 

(viii)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 the Purchaser, makes it impracticable or
inadvisable to purchase the Securities at the Closing.

 

    	9

    	 

    

 

2.5Warrant Coverage. In addition to the warrant
coverage described in Section 2.1, in the event that a public offering is consummated while the Note is outstanding (the "Public
Offering") that results in the Company obtaining financing of seven million dollars ($7,000,000) or greater, and such Public
Offering provides greater warrant coverage than provided hereby, then the Purchaser shall be granted additional Warrants such
that the Purchaser is covered, relative to the Subscription Amount, on a percentage basis that equals the warrant coverage provided
in the Public Offering relative to the gross offering price.

 

ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of
the Company. Except as set forth in 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 the Purchaser:

 

(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.

 

(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 nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and 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.

 

    	10

    	 

    

 

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

 

(d)No Conflicts. The execution,
delivery and performance by the Company 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, 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), 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 filing with the Commission pursuant to the Registration
Rights Agreement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities
and the listing of the Conversion Shares for trading thereon in the time and manner required thereby and (iv) 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").

 

    	11

    	 

    

 

(f) Issuance
of the Securities. The Securities, including any additional Warrants issuable pursuant to Sections 2.1 or 2.5 hereof, are
duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents. The Underlying Shares, 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 imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents. The Company has reserved from its duly authorized capital stock a number
of shares of Common Stock for issuance of the Underlying Shares and at least equal to 200% of the Required Minimum on the date
hereof.

 

(g)Capitalization.
The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(2) 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.
Except as set forth on Schedule 3.1(g), the Company has not issued any capital stock since its most recently filed periodic
report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company's stock option
plans, the issuance of shares of Common Stock to employees pursuant to the Company's employee stock purchase plans and
pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed
periodic report under the Exchange Act. 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 set forth in
Schedule 3.1(g) and as a result of the purchase and sale of the Securities, 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 Purchaser)
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. 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.

 

    	12

    	 

    

 

(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") 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 Company has never
been an issuer subject to Rule 144(i) under the Securities Act. 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
Chances: 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) except as set forth in Schedule 3.1(g), the Company has not issued
any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option 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.I(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 1 Trading Day prior to the date that this representation is
made,(vi) the Company has currently changing that auditor and the new auditor will replace current auditor EY, based in UK,
with a Boston based second tier auditor immediately for reporting the second quarter results, (vii) the Company is currently
restructure its finance department and will have only 1 CFO by end of July 2015 and two staff serving the finance department
in total.

 

    	13

    	 

    

 

(j)Litigation. Other than as
specifically identified in Schedule 3.1a) 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)Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company's or its
Subsidiaries' employees is a member of a union that relates to such employee's relationship with the Company or such
Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company,
no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any
other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each
such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the
foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws
and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

    	14

    	 

    

 

(l) 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 (except for normal
informational filings made in Q1 2015 in the U.K. of the separate unconsolidated financial statements of the Company's U.K.
subsidies for the year ended December 31, 2013 which were due to be filed by December 31, 2014) 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.

 

(m)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.

 

(n)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.

 

(o)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"). Neither the Company nor any Subsidiary has knowledge of or 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, and to the knowledge of the Company no such violation or infringement exists or, upon
commercialization, would exist. 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.

 

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

 

(q)Transactions With Affiliates
and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and,
to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or
from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000
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 stock option agreements under any stock option plan of the Company.

 

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

 

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(s)Certain Fees. Other than
as set forth on Schedule 3.1(s), no brokerage or finder's fees or commissions are or will be payable by the Company or any
Subsidiaries to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by the Transaction Documents. The Purchaser shall have no obligation with respect to any
fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may
be due in connection with the transactions contemplated by the Transaction Documents.

 

(t)Private Placement.Assuming
the accuracy of the Purchaser's 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 Purchaser as contemplated hereby. The issuance and sale
of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

 

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

 

 

    	17

    	 

    

 

(v)Registration Rights. Other
than the Purchaser, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities
of the Company or ally Subsidiaries save for the rights detailed in schedule 3.1 (g).

 

(w)Listing and Maintenance Requirements.
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.

 

(x)Application of Takeover Protections.
The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover
provision under the Company's certificate of incorporation (or similar charter documents) or the laws of its state of incorporation
that is or could become applicable to the Purchaser as a result of the Purchaser and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without limitation as a result of the Company's issuance of
the Securities and the Purchaser's ownership of the Securities.

 

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

 

(z)No Integrated Offering.
Assuming the accuracy of the Purchaser's representations and warranties set forth in Section 3.2, without Purchaser's prior approval
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.

 

    	18

    	 

    

 

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

 

(bb)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.

 

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

 

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

 

(ee)Accountants. The Company's
accounting firm is set forth on Schedule 3.1(ee) of the Disclosure Schedules. To the knowledge and belief of the Company,
such accounting firm: (i) is a registered public accounting firm as required by the Exchange Act; and (ii) shall express its opinion
with respect to the financial statements to be included in the Company's Annual Report for the fiscal year ending December 31,
2014.

 

(ff)Seniority. As of the Closing
Date, no Indebtedness or other claim against the Company is senior to the Note in right of payment, whether with respect to interest
or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase money security interests (which is
senior only as to underlying assets covered thereby) and capital lease obligations (which is senior only as to the property covered
thereby).

 

(gg) 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.

 

(hh) Acknowledgment Regarding
Purchaser's Purchase of Securities. The Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by
any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the
transactions contemplated thereby is merely incidental to the Purchaser's purchase of the Securities. The Company further
represents to the 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.

 

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(ii)Acknowledgment Regarding Purchaser's
Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and
4.15 hereof), it is understood and acknowledged by the Company that subject to the limitations contained in Section 4.15: (i) the
Purchaser has not been asked by the Company to agree, nor has the Purchaser agreed, to desist from purchasing or selling, long
and/or short, securities of the Company, or "derivative" securities based on securities issued by the Company or to hold
the Securities for any specified term; (ii) past or future open market or other transactions by the Purchaser, specifically including,
without limitation, Short Sales or "derivative" transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company's publicly-traded securities; (iii) the Purchaser, and counter-parties
in "derivative" transactions to which the Purchaser is a party, directly or indirectly, may presently have a "short"
position in the Common Stock; and (iv) the Purchaser shall not be deemed to have any affiliation with or control over any arm's
length counter-party in any "derivative" transaction. The Company further understands and acknowledges that other than
as specifically restricted herein (y) one or more Purchaser may engage in hedging activities at various times during the period
that the Securities are outstanding, including, without limitation, during the periods that the value of the Underlying Shares
and the Warrant Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could
reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging activities
are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of
the Transaction Documents so long as in compliance with the restrictions contained in paragraph 4.15 herein.

 

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

 

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

 

    	21

    	 

    

 

(ll)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").

 

(mm) U.S. Real Property Holding Corporation.
The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser's request.

 

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

 

(oo) 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.

 

3.2Representations and Warranties of the Purchaser.The
Purchaser hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as
of a specific date therein):

 

(a)Organization; Authority. The 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 the 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 the Purchaser.
Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser
in accordance with the terms hereof, will constitute the valid and legally binding obligation of the 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.

 

    	22

    	 

    

 

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

 

(c)Purchaser Status. At the
time the Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it converts
the Note or exercises a Warrant it will be an "accredited investor" as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7)
or (a)(8) under the Securities Act.

 

(d)Experience of The Purchaser.
The 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. The Purchaser is able to bear the economic risk of an investment
in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

(e)General Solicitation. The
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, the Purchaser has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, executed any
purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
the 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 the Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of the Purchaser's assets and the portfolio managers have no direct knowledge of
the investment decisions made by the portfolio managers managing other portions of the 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, the 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.

 

    	23

    	 

    

 

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

 

ARTICLE IV.

 

OTHER AGREEMENTS OF THE PARTIES

 

4.1Transfer 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 the Purchaser or in connection with a pledge
as contemplated in Section 4.1(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 the Registration Rights Agreement and shall have the rights and obligations of the Purchaser under this Agreement and the Registration
Rights Agreement.

 

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

 

 

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

 

The Company acknowledges and agrees that
the Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a
security interest in some or all of the Securities to a financial institution that is an "accredited investor" as defined
in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and the Registration Rights
Agreement and, if required under the terms of such arrangement, the Purchaser may transfer pledged or secured Securities to the
pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of
legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required
of such pledge. At the appropriate Purchaser's expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including,
if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act
to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights Agreement) thereunder.

 

(c)Certificates evidencing the
Underlying Shares and the Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b)
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 Underlying Shares and Warrant Shares pursuant to Rule
144; (iii) if such Underlying Shares and Warrant Shares are eligible for sale under Rule 144; or (iv) if such legend is not
required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by
the staff of the Commission). The Company and its Transfer Agent shall agree to accept the opinion of any licensed counsel of
Lender's choice or shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after any of the events
described in (i)-(iv) in the preceding sentence if required by the Transfer Agent to effect the removal of the legend
hereunder (with a copy to the applicable Purchaser and its broker). If all or any portion of a Note is converted at a time
when there is an effective registration statement to cover the resale of the Underlying Shares and Warrant Shares, or if such
Underlying Shares and Warrant Shares may be sold under Rule 144 or if such legend is not otherwise required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the
Commission) then such Underlying Shares and Warrant Shares shall be issued free of all legends. The Company agrees that
following the Securities Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it
will, no later than three (3) Trading Days following the delivery by the Purchaser to the Company or the Transfer Agent of a
certificate representing Underlying Shares and Warrant Shares, as applicable, issued with a restrictive legend (such third
Trading Day, the "Legend Removal Date"), deliver or cause to be delivered to the Purchaser a certificate
representing such shares that is free from all restrictive and other legends. The Company may not make any notation on its
records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.
Certificates for Underlying Shares and Warrant Shares subject to legend removal hereunder shall be transmitted by the
Transfer Agent to the Purchaser by crediting the account of the Purchaser's prime broker with the Depository Trust Company
System as directed by the Purchaser.

 

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(d)In addition to the Purchaser's other
available remedies, the Company shall pay to the Purchaser, in cash, as partial liquidated damages and not as a penalty, for each
$10,000 of Underlying Shares and Warrant Shares (based on the VWAP of the Common Stock on the date such Securities are submitted
to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing
to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal
Date until such certificate is delivered without a legend, for so long as such delay is caused by the Company. Nothing herein shall
limit the 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 the 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.

 

4.2Acknowledgment of
Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares and
the Warrant Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set
off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have
against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company. In the event of an issuance of stock involving tranches or other multiple closings, the
anti-dilution adjustment shall be calculated as if all stock was issued at the Closing.

 

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4.3Furnishing of Information; Public Information.

 

(a)If the Common Stock is not registered
under Section 12(b) or 12(g) of the Exchange Act on the date hereof, except for delays which may be caused outside of the Company's
control, the Company agrees to use its best efforts to register the Common Stock under Section 12(g) of the Exchange Act on or
before the ninetieth (90th) calendar day following the date hereof. Until the earliest of the time that no Purchaser
owns Securities, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange
Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required
to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting
requirements of the Exchange Act.

 

(b)At any time during the period commencing
from the six (6) month anniversary of the date hereof and ending at such time that all of the Securities may be sold without the
requirement for the Company to be in compliance with Rule 144(c)( I) and otherwise without restriction or limitation pursuant to
Rule 144, if the Company shall fail for any reason under its control to satisfy the current public information requirement under
Rule 144(c) (a "Public Information Failure") then, in addition to the Purchaser's other available remedies, the
Company upon receipt of a 30 day notice to pay or cure, shall pay to the Purchaser, in cash, as partial liquidated damages and
not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to
two percent (2.0%) of the aggregate Subscription Amount of the Purchaser's Securities on the day of a Public Information Failure
and on every thirtieth (30th) day (pro-rated for periods totaling less than thirty days) thereafter until the earlier
of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required for
the Purchaser to transfer the Underlying Shares and the Warrant Shares pursuant to Rule 144. The payments to which the Purchaser
shall be entitled pursuant to this Section 4.3(b) are referred to herein as "Public Information Failure Payments."
Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public
Information Failure Payments are incurred and (ii) the third (3'1) Business Day after the event or failure giving rise
to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments
in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial
months) until paid in full. Nothing herein shall limit such Purchaser's right to pursue actual damages for the Public Information
Failure, and the 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.

 

4.4Integration. 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.

 

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4.5Conversion and Exercise Procedures. The form
of Notice of Conversion included in the Note set forth the totality of the procedures required of the Purchaser in order to convert
the Note. Without limiting the preceding sentences, no ink-original Notice of Exercise or Notice of Conversion shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required in
order to convert the Note. No additional legal opinion, other information or instructions shall be required of the Purchaser to
convert its Note. The Company shall honor conversions of the Note and shall deliver Underlying Shares and the Warrant Shares in
accordance with the terms, conditions and time periods set forth in the Transaction Documents.

 

4.6Securities Laws Disclosure: Publicity. The
Company shall (a) by 9:30 a.m. (New York City time) on the Trading Day immediately following the date hereof, issue a press release
disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the
Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the
issuance of such press release, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public
information delivered to the Purchaser by the Company or any of its Subsidiaries, or any of their respective officers, directors,
employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company and the Purchaser
shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither
the Company nor the Purchaser shall issue any such press release nor otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of the Purchaser, or without the prior consent of the Purchaser, with
respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure
is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public
statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Purchaser, or
include the name of the Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior
written consent of the Purchaser, except: (a) as required by federal securities law in connection with any registration statement
contemplated by the Registration Rights Agreement and (b) to the extent such disclosure is required by law or Trading Market regulations,
in which case the Company shall provide the Purchaser with prior notice of such disclosure permitted under this clause (b).

 

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

 

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

 

4.9Use of Proceeds. The Company shall use the
net proceeds hereunder as set forth on Schedule 4.9 attached hereto, and shall not use such proceeds: (a) for the satisfaction
of any portion of the Company's debt (other than payment of account payables in the ordinary course of the Company's business and
prior practices); (b) for the redemption of any Common Stock or Common Stock Equivalents; (c) for the settlement of any outstanding
litigation; or (d) in violation of FCPA or OFAC regulations.

 

4.10Indemnification
of Purchaser. Subject to the provisions of this Section 4.10, the Company will indemnify and hold the Purchaser and its
directors, officers, shareholders, members, managers, 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 the 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, managers, 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 Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is
based upon a breach of such Purchaser Party's representations, warranties or covenants under the Transaction Documents or any
agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross
negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of
which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to
the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to
the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has
failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in
the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no
more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any
settlement by the 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 4.10 shall be made by
periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or
are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any
Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

 

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4.11Reservation and Listing. of Securities.

 

(a)The Company shall maintain a reserve
from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may then be
required to fulfill its obligations in full under the Transaction Documents. On a monthly basis, the Company will adjust the reserve
as necessary to make sure that 200% of the Required Minimum is available. However, at no point should the reserve be adjusted downwards.

 

(b)If, on any date, the number of authorized
but unissued (and otherwise unreserved) shares of Common Stock is less than 200% of the Required Minimum on such date, then the
Board of Directors shall use commercially reasonable efforts to amend the Company's certificate or articles of incorporation to
increase the number of authorized but unissued shares of Common Stock to at least 200% of the Required Minimum at such time, as
soon as possible and in any event not later than the ninetieth (9011i) day after such date.

 

(c)The Company shall, if applicable:
(i) in the time and manner required by the principal Trading Market, prepare and file with such Trading Market an additional shares
listing application covering a number of shares of Common Stock at least equal to the Required Minimum on the date of such application;
(ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation on such Trading Market
as soon as possible thereafter; (iii) provide to the Purchaser evidence of such listing or quotation; and (iv) maintain the listing
or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such Trading Market or another
Trading Market.

 

4.12 Reserved.

 

4.13 Reserved.

 

4.14 Equal Treatment of the Purchaser.
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 this Agreement unless the same consideration is also  offered
to all of the parties to this Agreement. Further, the Company shall not make any payment of principal or interest on the Note
in amounts which are disproportionate to the principal amount outstanding on the Note at any applicable time. For clarification
purposes, this provision constitutes a separate right granted to the Purchaser by the Company and negotiated separately by the
Purchaser, and is intended for the Company to treat the Purchaser and shall not in any way be construed as the Purchaser acting
in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

 

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4.15 Certain Transactions and Confidentiality.
The Purchaser covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will (i)
execute any Short Sales or Hedging Transactions, of any of the Company's securities during the period commencing with the execution
of this Agreement and ending at such time as the Company has been listed on the NASDAQ Capital Markets Exchange for a period of
3 months, or (ii) execute any Short Sales or Hedging Transactions of the Common Stock from the date hereof before the Underlying
Shares and Warrants have been registered with the Securities and Exchange Commission (a "Prohibited Short Sale").
The Purchaser covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed and all
required filings are made with the Securities and Exchange Commission, the Purchaser will maintain the confidentiality of the existence
and terms of this transaction and the information included in the Transaction Documents and the Disclosure Schedules. Notwithstanding
the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Purchaser reaffirms its obligations
to maintain confidentiality and not to trade on any material non-public information provided to Purchaser by the Company.

 

4.16 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 the 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 Purchaser 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 the Purchaser.

 

4.17. The Company agrees to implement several cost cutting initiatives
including, but not limited to following: (A) the Company has agree to replace current auditor EY, based in UK, with a Boston based
second tier auditor immediately for reporting the second quarter results, (B) the Company is currently restructure its finance
department and will have only 1 CFO by end of July 2015.

 

4.18. The Company agrees to grant purchaser the right during
the period the note is outstanding, to nominate for appointment to the Company Board of Directors, Dr. Dmitry Gen kin.

 

ARTICLE V.

MISCELLANEOUS

 

5.1Termination. This
Agreement may be terminated by the Purchaser, as to the Purchaser's obligations hereunder, by written notice to the other
parties, if the Closing has not been consummated on or before June 20, 2015; provided, however, that such termination
will not affect the right of any party to sue for any breach by any other party (or parties).

 

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5.2Fees and Expenses. At the Closing, the Company
has agreed to reimburse the Purchaser the sum of $10,000 for expenses associated with due diligence, and its legal fees, which
shall be paid at the Closing. The Company shall deliver to the Purchaser, prior to the Closing, a completed and executed copy of
the Closing Statement, attached hereto as Annex A. 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 (including, without limitation, any fees required for same-day processing of any instruction
letter delivered by the Company and any conversion or exercise notice delivered by the Purchaser), stamp taxes and other taxes
and duties levied in connection with the delivery of any Securities to the Purchaser.

 

5.3Entire Agreement. The Transaction Documents,
together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which
the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.4Notices. 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.

 

5.5Amendments: 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 Purchaser or, 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.

 

5.6Headings. 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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5.7Successors 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 the Purchaser (other than by merger).
The Purchaser may assign any or all of its rights under this Agreement to any Person to whom the 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 "Purchaser."

 

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

 

5.9Governing 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, suit or proceeding to enforce
any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.10, the prevailing
party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys' fees and other costs
and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

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

 

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

 

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5.12Severability. 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.

 

5.13Rescission and Withdrawal Right. Notwithstanding
anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents,
whenever the 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 the 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 a Note, the applicable
Purchaser shall be required to return any shares of Common Stock subject to any such rescinded conversion concurrently with the
return to the Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of the Purchaser's
right to acquire such shares.

 

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.

 

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

 

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

 

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

 

5.18 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.

 

5.19 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.

 

5.20 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.

 

    	35

    	 

    

 

5.21 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)

 

 

 

    	36

    	 

    

 

 

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

 

 

 

	Xenetic Biosciences, Inc.	 	Address for Notice:
	 	 	 
	By: /s/ M. S. Maguire	 	Fax:
	Name: M. S. Maguire	 	 
	Title:	 	 

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

 

 

 

 

 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS

 

 

 

    	37

    	 

    

 

[PURCHASER SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned has caused this Securities Purchase

 

Agreement to be duly executed by its authorized signatory as of
the date first indicated above.

 

Name of Purchaser: OJSC "Pharmsynthez"

 

Signature of Authorized Signatory
of Purchaser: /s/ Peter V. Kruglyako

 

Name of Authorized Signatory: Peter V. Kruglyako

 

Title of Authorized Signatory: Chief Executive Officer

 

Email Address of Authorized Signatory: pknw:lvakov@pharmsynthez.com

 

Facsimile Number of Authorized Signatory: 7 (8 12) 329 8089

 

Address for Notice to Purchaser: Office center "IT-Park",
25 Liter ZH, Krasnogo Kursanta ul.,

St. Petersburg , 197110 , Russia

 

Address for Delivery of Securities to Purchaser (if not same as
address for notice): Office center "ITPark",

25 Liter ZH, Krasnogo Kursanta ul.,

St. Petersburg , 197110 , Russia

 

Subscription Amount/Principal Amount: US $3 000 000

 

Individual Taxpayer Number: 7801075160

 

    	38

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