Document:

THESE SECURITIES HAVE 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 OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

COMMON STOCK PURCHASE WARRANT

 

atossa
genetics inc.

 

	Warrant Shares: _______	Issue Date:  January __, 2014

 

Warrant Certificate No.:________

 

THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on November
29, 2018 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Atossa Genetics Inc.,
a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “Warrant
Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”). The
purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 1(b).

 

Section 1.           Exercise.

 

a)          Exercise
of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as
it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company)
of a duly executed facsimile copy of the Notice of Exercise in the form annexed hereto. Within three (3) Trading Days following
the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable
Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure
set forth in Section 1(c) below is specified in the applicable Notice of Exercise. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the
Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant
to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company.
Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder
shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable
number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased
and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within one (1) Trading Day
of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

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b)          Exercise
Price. The exercise price per share of the Common Stock under this Warrant shall be $3.00, subject to adjustment hereunder
(the “Exercise Price”).

 

c)          Cashless
Exercise. If, at the time of exercise hereof, a registration statement covering the resale of the Warrant Shares has not been
filed by the Company and declared effective by the Securities and Exchange Commission, or such registration statement has been
filed but is no longer effective, then this Warrant may only be exercised, in whole or in part, at such time by means of a “cashless
exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:

 

(A) = the
VWAP on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless
exercise,” as set forth in the applicable Notice of Exercise;

 

(B) = the
Exercise Price of this Warrant, as adjusted hereunder; and

 

(X) =
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant
if such

exercise were by means of a cash exercise rather than a cashless exercise.

 

“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 or the
New York Stock Exchange (or any successors to any of the foregoing).

 

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“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the “Pink Sheets” published by OTC Markets Group, 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 Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.

 

Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 1(c).

 

d)           Mechanics
of Exercise.

 

i.            Delivery
of Warrant Shares Upon Exercise. The Company shall use best efforts to cause the Warrant Shares purchased hereunder to be transmitted
by the Transfer Agent to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such
system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of
the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery to
the address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the latest of (A)
the delivery to the Company of the Notice of Exercise, (B) surrender of this Warrant (if required) and (C) payment of the aggregate
Exercise Price as set forth above (including by cashless exercise, if permitted) (such date, the “Warrant Share Delivery
Date”). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been
exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to
be paid by the Holder, if any, pursuant to Section 1(d)(vi) prior to the issuance of such shares, having been paid.

 

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ii.         Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

 

iii.         Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 1(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.         Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to an exercise on or before
the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction
or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times
(2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in
which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common
Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.
Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

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v.           No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

vi.         Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided, however, that in the event Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise.

 

vii.         Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

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e)          Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of
the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common
Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder
or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of
the Company (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) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any
of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 1(e), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with
Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.
To the extent that the limitation contained in this Section 1(e) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates)
and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 1(e), in determining the number of outstanding shares of Common Stock, a Holder
may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual
report filed with the SEC, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written
notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written
or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of
shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock issuable upon exercise of this Warrant. The Holder, upon not less than 61 days’ prior notice to the Company,
may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1(e), provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to
the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 1(e)
shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is
delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 1(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this
Warrant.

 

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f)         Call
Provision. Subject to the provisions of Section 1(e) and this Section 1(f), if, after the Initial Exercise Date, (i) the VWAP
for each of the 20 consecutive Trading Days (the “Measurement Period,” which 20 consecutive Trading Day period
shall not have commenced until after the Initial Exercise Date) exceeds $6.00 (subject to adjustment for forward and reverse stock
splits, recapitalizations, stock dividends and the like after the Initial Exercise Date), (ii) the daily trading volume for each
Trading Day during the Measurement Period exceeds 250,000 shares of Common Stock (subject to adjustment for forward and reverse
stock splits, recapitalizations, stock dividends and the like after the Initial Exercise Date) and (iii) the Holder is not in possession
of any information that constitutes, or might constitute, material non-public information which was provided by the Company, then
the Company may, within 1 Trading Day of the end of such Measurement Period, call for cancellation of all or any portion of this
Warrant for which a Notice of Exercise has not yet been delivered (such right, a “Call”) for consideration equal
to $0.001 per Warrant Share. To exercise this right, the Company must deliver to the Holder an irrevocable written notice (a “Call
Notice”), indicating therein the unexercised portion of this Warrant to which such notice applies. If the conditions
set forth below for such Call are satisfied from the period from the date of the Call Notice through and including the Call Date
(as defined below), then any portion of this Warrant subject to such Call Notice for which a Notice of Exercise shall not have
been received by the Call Date will be cancelled at 6:30 p.m. (New York City time) on the tenth Trading Day after the date the
Call Notice is received by the Holder (such date and time, the “Call Date”). Any unexercised portion of this
Warrant to which the Call Notice does not pertain will be unaffected by such Call Notice. In furtherance thereof, the Company covenants
and agrees that it will honor all Notices of Exercise with respect to Warrant Shares subject to a Call Notice that are tendered
through 6:30 p.m. (New York City time) on the Call Date. The parties agree that any Notice of Exercise delivered following a Call
Notice which calls less than all the Warrants shall first reduce to zero the number of Warrant Shares subject to such Call Notice
prior to reducing the remaining Warrant Shares available for purchase under this Warrant. For example, if (A) this Warrant then
permits the Holder to acquire 100 Warrant Shares, (B) a Call Notice pertains to 75 Warrant Shares, and (C) prior to 6:30 p.m. (New
York City time) on the Call Date the Holder tenders a Notice of Exercise in respect of 50 Warrant Shares, then (x) on the Call
Date the right under this Warrant to acquire 25 Warrant Shares will be automatically cancelled, (y) the Company, in the time and
manner required under this Warrant, will have issued and delivered to the Holder 50 Warrant Shares in respect of the exercises
following receipt of the Call Notice, and (z) the Holder may, until the Termination Date, exercise this Warrant for 25 Warrant
Shares (subject to adjustment as herein provided and subject to subsequent Call Notices). Subject again to the provisions of this
Section 1(f), the Company may deliver subsequent Call Notices for any portion of this Warrant for which the Holder shall not have
delivered a Notice of Exercise. Notwithstanding anything to the contrary set forth in this Warrant, the Company may not deliver
a Call Notice or require the cancellation of this Warrant (and any such Call Notice shall be void), unless, from the beginning
of the Measurement Period through the Call Date, (1) the Company shall have honored in accordance with the terms of this Warrant
all Notices of Exercise delivered by 6:30 p.m. (New York City time) on the Call Date, and (2) the Registration Statement shall
be effective as to all Warrant Shares and the prospectus thereunder available for use by the Holder for the resale of all such
Warrant Shares, and (3) the Common Stock shall be listed or quoted for trading on the Trading Market, and (4) there is a sufficient
number of authorized shares of Common Stock for issuance of all Warrant Shares, and (5) the issuance of the shares shall not cause
a breach of any provision of Section 1(e) herein. The Company’s right to call the Warrants under this Section 1(f) shall
be exercised ratably among the Holders based on each Holder’s initial purchase of Warrants.

 

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Section 2.           Certain
Adjustments and Reduction of Warrant Shares.

 

a)          Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 2(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)          Fundamental
Transaction. In case of any reclassification, capital reorganization, exchange of shares, liquidation, recapitalization or
change of the Common Stock (other than as a result of a subdivision, combination, stock dividend or reclassification provided for
in Section 2(a) hereof), or in case of any consolidation or merger of the Company with or into another corporation or entity (other
than a merger with a subsidiary in which merger the Company is the continuing corporation and which does not result in any reclassification
or capital reorganization or change of the outstanding Common Stock) or in case of any sale, lease or conveyance to another corporation
or entity of all or substantially all of the assets of the Company, then the Company shall, as a condition precedent to such transaction,
cause lawful and effective provisions to be made (and duly executed documents evidencing the same from the Company or its successor
shall be delivered to the Holder) so that the Holder shall have the right thereafter upon exercise of this Warrant, to purchase
the kind and amount of shares of stock and other securities and property receivable upon such reclassification, capital reorganization,
exchange of shares, liquidation, recapitalization, change, consolidation, merger, sale or conveyance by a holder of the number
of shares of Common Stock which might have been received upon conversion of this Warrant immediately prior to such reclassification,
capital reorganization, exchange of shares, liquidation, recapitalization, change, consolidation, merger, sale or conveyance, and
in any such event, such provision shall include provision for adjustments which shall be as nearly equivalent as may be practicable
to the adjustments provided for herein. The Company shall not effect any such consolidation, merger, sale, transfer or other disposition
described above, unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing or otherwise acquiring such assets shall assume, by written
instrument executed and mailed or delivered to the Holder of this Warrant at the last address of the Holder appearing on the books
of the Company, the obligation to deliver to the Holder such shares of stock, securities, cash or properties as, in accordance
with the foregoing provisions, the Holder may be entitled to acquire. The above provisions of this paragraph shall similarly apply
to successive reorganizations, reclassifications, exchanges, liquidations, recapitalizations, changes, consolidations, mergers,
sales, transfers or other dispositions, if any.

 

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c)           Calculations.
All calculations under this Section 2 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 2, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

d)           Notice
to Holder.

 

i.            Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 2, the Company shall promptly
mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of
Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii.         Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last
address as it shall appear upon the Warrant Register (as defined below), at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective
or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their
shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided
hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company
shall simultaneously file such notice with the SEC pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to
exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such
notice except as may otherwise be expressly set forth herein.

 

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e)          Voluntary
Adjustment by Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to
any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

 

f)          Reduction
of Warrant Shares. Notwithstanding any other terms or provisions of this Warrant, the number of Warrant Shares underlying this
Warrant may be reduced by the Company at the written request of the Holder as necessary to comply with any rules and regulations
promulgated by the Financial Industry Regulatory Authority (“FINRA”).

 

Section 3.           Transfer
of Warrant.

 

a)          Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company (or its designated agent), together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment,
the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in
the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued. Notwithstanding
the foregoing, pursuant to FINRA Rule 5110(g)(1), neither this Warrant nor any securities issued upon exercise of this Warrant
may be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or
call transaction that would result in the effective economic disposition of such securities by any person for a period of 180 days
immediately following the date of effectiveness or commencement of sale of this offering, except the transfer of any security (i)
by operation of law or by reason of our reorganization, (ii) to any FINRA member firm participating in the offering and the officers
or partners thereof, if all of the securities so transferred remain subject to the lock-up restriction described above for the
remainder of the time period, (iii) if the aggregate amount of our securities held by the Holder or related person do not exceed
1% of the securities being offered, (iv) that is beneficially owned on a pro-rata basis by all equity owners of an investment fund,
provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate
do not own more than 10% of the equity in the fund; or (v) the exercise or conversion of any security, if all of the securities
received remain subject to the lock-up restriction set forth above for the remainder of the time period.

 

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b)          New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company (or its designated agent), together with a written notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 3(a), as to any transfer which
may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges
shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant
Shares issuable pursuant thereto.

 

c)          Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary. Upon providing written notice to the Holder, the Company may engage
a warrant agent to administer certain of the Company’s obligations under this Warrant, such as issuing the Warrant Shares
on exercise and maintenance of the Warrant Register (a “Warrant Agent”). Upon providing notice of the engagement
of a Warrant Agent, the Holder shall thereafter substitute the Warrant Agent for the Company for purposes of this Warrant, as appropriate
and as set forth in the notice of the engagement of the Warrant Agent.

 

d)          Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable
state securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee
of this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration
under the Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Company an investment letter in form and substance acceptable to the Company and (iii) that the transferee be an
“accredited investor” as defined in Rule 501(a) promulgated under the Securities Act or a “qualified institutional
buyer” as defined in Rule 144A(a) under the Securities Act.

 

    	11

    	 

    

 

Section 5.           Miscellaneous.

 

a)          No
Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 1(d)(i), except as expressly set forth in
Section 2.

 

b)          Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

 

c)          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 Trading Day, then, such action may be taken or such right may be exercised on the next succeeding
Trading Day.

 

d)          Authorized
Shares.

 

The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise
of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment
for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

    	12

    	 

    

 

Except and
to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions
as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking
any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

 

e)          Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the laws of the State of California.

 

f)           Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does
not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g)          Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any
material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by
the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h)          Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
to the address of record on file with the Company.

 

    	13

    	 

    

 

i)         Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder
for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.

 

j)         Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.

 

k)         Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder.

 

l)         Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

m)       Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions
of this Warrant.

 

n)        Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.

 

********************

(Signature Page Follows)

 

    	14

    	 

    

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	 	atossa genetics inc.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	15

    	 

    

 

NOTICE OF EXERCISE

 

To:atossa
genetics inc.

 

(1)  The undersigned
hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2)  Payment
shall take the form of (check applicable box):

 

 ̈
in lawful money of the United States; or

 

 ̈
if permitted, the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
1(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 1(c).

 

(3)  Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

	 	 

 

The Warrant Shares shall be delivered to
the following DWAC Account Number:

 

	 	 
	 	 
	 	 
	 	 
	 	 

 

[SIGNATURE
OF HOLDER]

 

Name of Investing Entity: ___________________________________________________________________________

Signature of Authorized Signatory of
Investing Entity: _____________________________________________________

Name of Authorized Signatory: _______________________________________________________________________

Title of Authorized Signatory: ________________________________________________________________________

Date: ___________________________________________________________________________________________

 

    	 

    	 

    

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, [all/_______]
shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________
whose address is

 

_______________________________________________________________.

 

_______________________________________________________________

 

	 	Dated:  ______________, _______
	 	 	 
	 	Holder’s Signature:	 
	 	 	 
	 	Holder’s Address:SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of January 23, 2014, by and between Soul and Vibe Interactive Inc.,
a Nevada corporation (the “Company”), and Seaside 88, LP, a Florida limited partnership (such investor, including
its successors and assigns, “Seaside”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act (as defined herein), and
Rule 506 promulgated thereunder, the Company desires to issue and sell to Seaside, and Seaside 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 Seaside agree as follows:

 

ARTICLE I.

DEFINITIONS

 

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

 

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.

 

“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.

 

“Agreement”
shall have the meaning ascribed to such term in the introduction hereof, as the same may be amended from time to time.

 

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

 

“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.

 

“Cap”
means 3,600,000 shares of Common Stock.

 

“Closing”
means the Initial Closing and each Subsequent Closing.

 

“Closing
Dates” means the Initial Closing Date and each Subsequent Closing Date.

 

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

 

“Common
Stock” means the common stock of the Company, no par value, 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.

 

    	1

    	 

    

 

 

“Company”
shall have the meaning ascribed to such term in the introduction hereof, including any successor or assign thereof.

 

“Company
Counsel” means Sichenzia Ross Friedman Ference LLP or other counsel (including in-house counsel of the Company)
reasonably acceptable to Seaside.

 

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

 

“Dollar
Limit” shall have the meaning ascribed to such term in Section 2.5(b).

 

“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.

 

“Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1(ll).

 

“Final
Subsequent Closing Date” shall mean the date of the Subsequent Closing that occurs on the earlier of (a) such time as
Seaside has purchased that number of Shares equal to the Cap, and (b) the one-year anniversary of the Initial Closing Date.

 

“Floor”
shall mean $0.25 (as the same may be proportionately adjusted in respect of any stock split, stock dividend, combination, recapitalization
or the like with respect to the Common Stock).

 

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

 

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

 

“Initial
Closing” means the closing of the purchase and sale of the Shares pursuant to Section 2.1.

 

“Initial
Closing Date” means the date when all of the Transaction Documents and all other documents required to be executed and
delivered in connection with the Initial Closing pursuant this Agreement have been executed and delivered by the applicable parties
thereto, and all conditions precedent to Seaside’s obligations to purchase the Shares, and the Company’s obligations
to issue and deliver the Shares, have been satisfied or waived with respect to the Initial Closing.

 

“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, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Material
Adverse Effect” means any condition, event, change or effect that would reasonably be expected to have a material adverse
effect on (a) the legality, validity or enforceability of any Transaction Document, (b) the results of operations, assets, business,
prospects or financial condition of the Company and its Subsidiaries, taken as a whole, or (c) the Company’s ability to perform
in any material respect on a timely basis its obligations under any Transaction Document, but shall not mean or include any condition,
event or change which (1) is or results from events or occurrences relating to the economy in general (including arising from terrorist
attacks, acts of war or civil unrest) or the Company’s industry in general and not specifically relating to the Company or
having a disproportionate impact on the Company, or (2) results from the announcement of this Agreement or the transactions contemplated
hereby or by the other Transaction Documents.

 

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

 

    	2

    	 

    

 

 

“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(mm).

 

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

 

“Per
Share Purchase Price” shall be an amount equal to the average of the high and low trading prices (measured in hundredths
of cents) of the Common Stock on the Trading Market during normal trading hours for the five (5) consecutive Trading Days immediately
prior to a Closing Date, as shown on Yahoo Finance, multiplied by 0.50.

 

“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.

 

“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).

 

“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).

 

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

 

“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.

 

 

“Seaside”
shall have the meaning ascribed to such term in the introduction hereof.

 

“Seaside
Party” shall have the meaning ascribed to such term in Section 4.8.

 

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

 

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

 

“Share
Amount” means the number of Shares to be purchased at a Closing, such number to be equal to the lesser of (a) 300,000
shares of Common Stock, and (b) ten percent (10.0%) of the total number of shares of Common Stock traded during normal trading
hours during the 20 Trading Days immediately preceding such Closing, as shown on Yahoo Finance.

 

“Shares”
means the shares of Common Stock issued or issuable to Seaside pursuant to this Agreement (as the same may be proportionately adjusted
in respect of any stock split, stock dividend, combination, recapitalization or the like with respect to the Common Stock).

 

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

 

“Subscription
Amount” means the amount to be paid for Shares at a Closing by Seaside in United States dollars and in immediately available
funds, calculated as the product of (a) the Share Amount for such Closing and (b) the Per Share Purchase Price for such Closing.

 

    	3

    	 

    

 

“Subsequent
Closing” means each closing of the purchase and sale of the Shares pursuant to Section 2.2.

 

“Subsequent
Closing Date” means each subsequent monthly anniversary of the Initial Closing Date (or, if such day is not a Trading
Day, then the first day thereafter that is a Trading Day), commencing the month after the Initial Closing Date and ending on the
Final Subsequent Closing Date, or in each case, such later dates when all conditions precedent to Seaside’s obligations to
purchase the Shares, and the Company’s obligations to issue and deliver the Shares, have been satisfied or waived with respect
to the Subsequent Closing, unless this Agreement is earlier terminated pursuant to the terms hereof.

 

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

 

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

 

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

 

“Transaction
Documents” means this Agreement and all schedules hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.

 

“Transfer
Agent” means Island Stock Transfer, the current transfer agent of the Company, with a mailing address of 15500 Roosevelt
Blvd. Suite 301 Clearwater, FL. 33760 and a facsimile number of (727) 289-0069, and any successor transfer agent of the Company.

 

“VWAP”
means the daily volume weighted average of actual trading prices measured in hundreths of cents of the Common Stock of the Company
on the Trading Market on the applicable date.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1Initial
Closing. On the Initial 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 Seaside agrees to purchase,
the Share Amount at the Per Share Purchase Price as calculated for the Initial Closing. Seaside shall deliver to the Company, via
wire transfer of immediately available funds, the Subscription Amount for the Initial Closing, and the Company shall deliver to
Seaside the Share Amount for the Initial Closing, and the Company and Seaside shall deliver the other items set forth in Section
2.3 deliverable at the Initial Closing. Upon satisfaction or waiver of the covenants and conditions set forth in Sections 2.3 and
2.4, the Initial Closing shall occur on the Initial Closing Date electronically or at such physical location as the parties shall
mutually agree.

 

2.2Subsequent
Closings. On each Subsequent Closing Date, upon the terms and subject to the conditions set forth herein, including but not
limited to Section 2.5, the Company agrees to sell, and Seaside agrees to purchase, the Share Amount at the Per Share Purchase
Price as calculated for such Subsequent Closing. Seaside shall deliver to the Company, via wire transfer of immediately available
funds, the Subscription Amount, and the Company shall deliver to Seaside the Share Amount, for such Subsequent Closing, subject
to Section 2.5, and the Company and Seaside shall deliver the other items set forth in Section 2.3 deliverable at such Subsequent
Closing. Upon satisfaction or waiver of the covenants and conditions set forth in Sections 2.3, 2.4 and 2.5, each Subsequent Closing
shall occur on the applicable Subsequent Closing Date electronically or at such physical location as the parties shall mutually
agree.

 

 

    	4

    	 

    

 

2.3Deliveries.

 

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

 

(i)solely
on the Initial Closing Date, this Agreement duly executed by the Company; 

 

(ii)solely
on the Initial Closing Date, the opinion of Company Counsel, substantially in the form of Exhibit A hereto; 

 

(iii)an
officer’s certificate of the Company’s Chief Executive Officer or Chief Financial Officer in the form of Exhibit
B attached hereto; and

 

(iv)a
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis and
in compliance with Section 4.12 hereof, a certificate evidencing the applicable Share Amount purchased by Seaside at such Closing,
registered in the name of Seaside.

 

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

 

(i)solely
on the Initial Closing Date, this Agreement duly executed by Seaside; and

 

(ii)the
applicable Subscription Amount by wire transfer to the account as specified in writing by the Company, and in each case less the
amount due Seaside for reimbursement of its expenses pursuant to Section 5.2 hereof.

 

2.4Closing
Conditions. 

 

(a)The
obligations of the Company hereunder in connection with each Closing are subject to the satisfaction by Seaside, or waiver by the
Company, of the following conditions:

 

(i)the
accuracy on the Closing Date of the representations and warranties of Seaside contained herein (provided that representations
and warranties that speak as of a specific date shall continue to be true and correct as of the Closing with respect to such date);

 

(ii)the
performance or satisfaction by Seaside of all obligations, covenants and agreements required to be performed by Seaside at or prior
to the Closing Date; 

 

(iii)the
delivery by Seaside of the items set forth in Section 2.3(b) of this Agreement; and

 

(iv)with
respect to any Subsequent Closing, the satisfaction of the conditions set forth in Section 2.5 of this Agreement.

 

(b)The
obligations of Seaside hereunder in connection with each Closing are subject to the satisfaction by the Company, or waiver by Seaside,
of the following conditions:

 

(i)the
accuracy on the Closing Date of the representations and warranties of the Company contained herein (provided that representations
and warranties that speak as of a specific date shall continue to be true and correct as of the Closing with respect to such date);

 

 

    	5

    	 

    

 

(ii)the
performance or satisfaction by the Company of all obligations, covenants and agreements required to be performed by the Company
at or prior to the Closing Date, including obtaining all Required Approvals; 

 

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

 

(iv)with
respect to any Subsequent Closing, the satisfaction of the conditions set forth in Section 2.5 of this Agreement;

 

(v)there
shall have been no Material Adverse Effect with respect to the Company since the date hereof; and

 

(vi)from
the date hereof to each Closing Date (up to and including the Final Subsequent Closing Date), trading in the Common Stock shall
not have been suspended by the Commission or the Company’s principal Trading Market (except for any suspension of trading
of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), 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 Seaside,
makes it impracticable or inadvisable to purchase the Shares at the Closing.

 

2.5The
Floor; Limitation on Purchases; The Cap.

 

(a)With
respect to each Subsequent Closing, in the event the Per Share Purchase Price does not equal or exceed the Floor as calculated
with respect to such Subsequent Closing, then such Subsequent Closing will not occur. In each such event, there will be one fewer
Closing pursuant to this Agreement. The failure to have a Subsequent Closing due to failure to meet the Floor will not impact any
other Subsequent Closing.

 

(b)If,
for any Subsequent Closing, the proposed Subscription Amount to be invested by Seaside at such Subsequent Closing is greater than
two and one-half times the Subscription Amount invested by Seaside at the immediately preceding Closing (the “Dollar Limit”),
then Seaside shall have the option to reduce the number of Shares purchased at such Subsequent Closing such that the amount of
the investment at such Closing is an amount equal to, as near as possible, the applicable Dollar Limit.

 

(c)In
no event will any Subsequent Closing occur if, as a result of Seaside’s purchase of Shares at such Subsequent Closing, Seaside’s
beneficial ownership of the Common Stock, calculated in accordance with Rule 13d-3 under the Exchange Act as promulgated by the
Commission, will exceed 9.9% of the Company’s outstanding Common Stock immediately after such Subsequent Closing. In such
event, Seaside will purchase only that number of Shares that will cause its beneficial ownership, calculated in accordance with
Rule 13d-3, to remain below 9.9%.

 

(d)In
no event will any Subsequent Closing occur if, as a result of Seaside’s purchase of the applicable Share Amount at such Subsequent
Closing, Seaside will have purchased an aggregate number of Shares in excess of the Cap. In such event, Seaside will purchase only
that number of Shares at such Subsequent Closing that will cause its purchase of Shares to be equal to, as near as possible, the
Cap.

 

    	6

    	 

    

 

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1Representations
and Warranties of the Company. Except as set forth under the corresponding section of the disclosure schedules delivered concurrently
herewith, which disclosure schedules shall be deemed a part hereof (the “Disclosure Schedules”), the Company
hereby makes the representations and warranties set forth below as of the date hereof and as of each Closing Date (provided
that representations and warranties that speak as of a specific date shall continue to be true and correct as of such Closing with
respect to such date): 

 

(a)Subsidiaries.
All of the significant subsidiaries (as that term is defined in Rule 1-02 of Regulation S-X promulgated by the Commission) of the
Company are listed in the Company’s most recent Annual Report on Form 10-K as modified by any subsequent SEC Reports filed
with the SEC (each a “Subsidiary”). The Company owns, directly or indirectly, all of the capital stock or other
equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock
of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe
for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the
Transaction Documents shall be disregarded.

 

(b)Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in a Material Adverse Effect, and no Action has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

(c)Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery
of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby,
including the issuance and sale of the Shares, 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 therewith
other than in connection with the Required Approvals. Each 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 the Transaction Documents, the issuance and sale of the
Shares and the consummation by it of the transactions contemplated hereby and thereby to which it is a party 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 could not reasonably be expected to have or result in a Material Adverse Effect.

 

 

    	7

    	 

    

 

(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 (if any) required pursuant to Section 4.4 of this Agreement, and (ii) 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”).

 

(f)Issuance
of the Shares. The Shares 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.

 

(g)Capitalization.
The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include the
number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. 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. Except as set forth on Schedule 3.1(g), No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except
as a result of the purchase and sale of the Shares or as set forth on Schedule 3.1(g), there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any
shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or
may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Shares will
not obligate the Company to issue shares of Common Stock or other securities to any Person (other than Seaside) 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 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 Shares. 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.

 

(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, as the same may be amended, 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 and immaterial year-end audit adjustments.

 

 

    	8

    	 

    

 

(i)Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof or the date
of a Subsequent Closing, as applicable: (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 except as otherwise required pursuant to GAAP,
(iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant to existing Company stock option and incentive plans and awards.
The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance
of the Shares contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance,
occurrence or development has occurred or exists, or is reasonably expected to occur or exist, with respect to the Company or its
Subsidiaries or their respective business, 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 or deemed made.

 

(j)Litigation.
There is no action, claim, 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 and including,
without limitation, an informal investigation or partial proceeding, such as a deposition) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares
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 material 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. No executive officer, to the knowledge of the Company, 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.

 

    	9

    	 

    

 

(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 governmental body or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.

 

(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 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 Liens for the payment
of federal, state or other taxes, 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)Patents
and Trademarks. 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 material for use in connection with their respective
businesses and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of,
the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the
latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge
that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have a Material Adverse
Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement
by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures
to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

 

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(p)Insurance.
The Company and the Subsidiaries do not currently have or maintain any insurance. The Company plans on obtaining insurance from
insurers of recognized financial responsibility against 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 from all Closings.

 

(q)Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company and,
to the knowledge of the Company, none of the employees of the Company 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, 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 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 is 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 has established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company 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 Company’s disclosure controls
and procedures as of the end of the period covered by the Company’s 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 Company’s internal
control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely
to materially affect, the Company’s internal control over financial reporting.

 

(s)Certain
Fees. Except for a fee payable to Meyers Associates, L.P., which fee will be paid by the Company, no brokerage or finder’s
fees or commissions are or will be payable by the Company 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. Seaside 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 Seaside’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 Shares by the Company to Seaside as contemplated hereby. The
issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Trading Market.

 

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

 

(v)Registration
Rights. No Person has any right to cause the Company to effect the registration under the Securities Act of any securities
of the Company.

 

(w)Listing
and Maintenance Requirements. The Company has not, in the 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 Seaside as a result of Seaside 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 Shares and Seaside’s ownership of the Shares.

 

(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 Seaside or its agents or counsel with any information
that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that Seaside
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 Seaside regarding the Company, its business 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 Seaside does not make and has not 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 Seaside’s representations and warranties set forth in Section 3.2, neither
the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the
Shares 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. 

 

(aa)Solvency.
Except as set forth on Schedule 3.1(aa), 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 Shares 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, 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 that 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 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.

 

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(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 each Subsidiary (i) has made or filed all United States federal and state 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.

 

(cc)No
General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Shares
by any form of general solicitation or general advertising. The Company has offered the Shares for sale only to Seaside.

 

(dd)Foreign
Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of
the Company, 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 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 the Foreign Corrupt Practices Act of 1977, as amended.

 

(ee)Accountants.
The Company’s accounting firm is HJ & Associates, LLC. To the knowledge and belief of the Company, such accounting firm:
(i) is a registered independent 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 year ending December 31, 2013.

 

(ff)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. 

 

(gg)
Acknowledgment Regarding Seaside’s Purchase of Shares. The Company acknowledges and agrees that Seaside 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 Seaside is not 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 Seaside or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to Seaside’s purchase of the Shares. The Company further represents to Seaside 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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(hh)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 Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any
of the Shares, 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 Shares.

 

(ii)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.

 

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

 

(kk)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 Seaside’s
request.

 

(ll)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 (25%)
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.

 

(mm)Money
Laundering. The operations of the Company 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 with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

3.2Representations
and Warranties of Seaside. Seaside hereby makes the representations and warranties set forth below to the Company as of the
date hereof and as of each Closing Date (provided that representations and warranties that speak as of a specific date shall
continue to be true and correct as of such Closing with respect to such date):

 

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(a)Organization;
Authority. Seaside is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of
its organization with full right, corporate or partnership 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 Seaside 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 Seaside. Each Transaction Document to which it is a party has been duly executed by Seaside, and when delivered
by Seaside in accordance with the terms hereof, will constitute the valid and legally binding obligation of Seaside, enforceable
against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)Status
of Shares; Own Account. Seaside understands that the Shares are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Shares as principal for its own account and
not with a view to or for distributing or reselling such Shares 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 Shares 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 Shares in violation of the Securities Act or any applicable state securities law (this representation
and warranty not limiting Seaside’s right to sell the Shares in compliance with applicable federal and state securities laws).
Seaside is acquiring the Shares hereunder in the ordinary course of its business.

 

(c)Experience
of Seaside. Seaside, 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 Shares,
and has so evaluated the merits and risks of such investment. Seaside is able to bear the economic risk of an investment in the
Shares and, at the present time, is able to afford a complete loss of such investment.

 

(d)Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, Seaside has not directly
or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with Seaside, executed any purchases or
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that Seaside 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. Other than to other Persons
party to this Agreement, Seaside 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.

 

(e)No
Brokers or Finders. No agent, broker, investment bank or firm is or will be entitled to any broker’s or finder’s
fee, or any commission or similar fee, from Seaside in connection with any of the transactions contemplated by this Agreement or
any other Transaction Document.

 

The Company acknowledges
and agrees that the representations contained in Section 3.2 shall not modify, amend or affect Seaside’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.

 

 

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ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1Transfer
Restrictions; Legends and Legend Removal. 

 

(a)The
Shares may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Shares
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of Seaside 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 Shares
under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this
Agreement and shall have the rights and obligations of Seaside under this Agreement.

 

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

 

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

 

The Company
acknowledges and agrees that Seaside 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 Shares to a financial institution that is an “accredited investor”
as defined in Rule 501(a) under the Securities Act and that agrees to be bound by the provisions of this Agreement and, if required
under the terms of such arrangement, Seaside may transfer pledged or secured Shares 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 Seaside’s
expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Shares may reasonably
request in connection with a pledge or transfer of the Shares, including, if the Shares are then registered for resale, 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.

 

(c)Certificates
evidencing the Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof), (i) while a registration
statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Shares pursuant
to Rule 144, (iii) if such Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance
with the current public information required under Rule 144 as to such Shares and without volume or manner-of-sale restrictions,
or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission). From and after six (6) months from the applicable Closing Date, unless
Seaside is then an Affiliate of the Company, at such time as Seaside has sold or proposes to sell all or any portion of the Shares
then eligible to be sold pursuant to Rule 144, the Company shall cause its counsel to issue a legal opinion to the Transfer Agent
if required by the Transfer Agent to effect the removal of the legend hereunder with respect to the Shares sold or proposed to
be sold. The Company agrees that following the time as such legend is no longer required under this Section 4.1(c), it will, no
later than three Trading Days following the delivery by Seaside to the Company or the Transfer Agent of a certificate representing
Shares issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause
to be delivered to Seaside 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 Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent
to Seaside by crediting the account of Seaside’s prime broker with the Depository Trust Company System as directed by Seaside.

 

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(d)In
addition to Seaside’s other available remedies, the Company shall pay to Seaside, in cash, as partial liquidated damages
and not as a penalty, for each $1,000 of Shares (based on the VWAP of the Common Stock on the date such Shares 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. Notwithstanding the foregoing, the Company shall not be responsible
for such partial liquidated damages in the event of delays in processing the issuance of new certificates not directly the result
of events within the Company’s reasonable control. Nothing herein shall limit Seaside’s right to pursue actual damages
for the Company’s failure to deliver certificates representing any Shares as required by the Transaction Documents, and Seaside
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.

 

(e)Seaside
agrees with the Company that Seaside will sell any Shares pursuant to either the registration requirements of the Securities Act,
including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Shares are sold pursuant to a
registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that
the removal of the restrictive legend from certificates representing Shares as set forth in this Section 4.1 is predicated upon
the Company’s reliance upon this understanding.

 

4.2Furnishing
of Information; Public Information. 

 

(a)For
a period of two (2) years from the Closing Date, the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to
Section 15(d) of the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act. As
long as Seaside owns Shares, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish
to Seaside and make publicly available in accordance with Rule 144(c) such information as is required for Seaside to sell the Shares,
including without limitation, under Rule 144. The Company further covenants that it will take such further action as any holder
of Shares may reasonably request, to the extent required from time to time to enable such Person to sell such Shares without registration
under the Securities Act, including without limitation, within the requirements of the exemption provided by Rule 144.

 

(b)At
any time during the period commencing on the Initial Closing Date and ending at such time that all of the Shares may be sold without
the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant
to Rule 144, if the Company shall fail for any reason to satisfy the current public information requirement under Rule 144(c) (a
“Public Information Failure”) then, in addition to Seaside’s other available remedies, the Company shall
pay to Seaside, in cash, as liquidated damages and not as a penalty, for each $1,000 of Shares (based on the VWAP of the Common
Stock on the date on which Seaside shall first attempt a sale) sought to be sold by Seaside, $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 that the Public Information
Failure remains uncured by the Company. The payments to which Seaside shall be entitled pursuant to this Section 4.2(b) are referred
to herein as “Public Information Failure Payments.”  Public Information Failure Payments shall be
paid within five (5) Business Days of the first occurrence of the Public Information Failure and on or before the last day of each
calendar month thereafter if the Public Information Failure continues beyond the first month.  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 one and one-half percent (1.5%) per month (prorated for partial months) until paid in full. Nothing herein
shall limit Seaside’s right to pursue actual damages for the Public Information Failure, and Seaside 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.

 

 

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4.3Integration.
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 Shares in a manner that would require
the registration under the Securities Act of the sale of the Shares or that would be integrated with the offer or sale of the Shares
for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing
of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction. 

 

4.4Securities
Laws Disclosure; Publicity. If required under applicable securities laws, the Company shall timely file a Current Report on
Form 8-K and press release disclosing the material terms of the transactions contemplated hereby, and including the Transaction
Documents as exhibits thereto, in each case reasonably acceptable to Seaside and its counsel. From and after the execution hereof,
the Company shall have publicly disclosed all material, non-public information delivered to Seaside 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 Seaside shall consult with each other in issuing or making any other press releases,
filings or other statements with respect to the transactions contemplated hereby, and neither the Company nor Seaside shall issue
any such press release nor otherwise make any such filing or statement without the prior consent of the other party, which consent
shall not unreasonably be withheld or delayed. 

 

4.5Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that Seaside
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 Seaside
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Shares under the Transaction
Documents or under any other agreement between the Company and Seaside.

 

4.6Non-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 Seaside or its agents
or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto Seaside
shall have executed a written agreement with the Company regarding the confidentiality and use of such information. The Company
understands and confirms that Seaside shall be relying on the foregoing covenant in effecting transactions in securities of the
Company.

 

4.7Use
of Proceeds. The Company shall use the net proceeds from the sale of the Shares hereunder for working capital and general corporate
purposes and shall not use such proceeds for: (a) the satisfaction of any portion of the Company’s debt (other than payment
of trade payables in the ordinary course of the Company’s business consistent with prior practices), (b) the redemption of
any Common Stock or Common Stock Equivalents, (c) the settlement of any outstanding litigation, or (d) in violation of the FCPA
or OFAC regulations.

 

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4.8Indemnification
of Seaside. Subject to the provisions of this Section 4.8, the Company will indemnify and hold Seaside, Seaside 88 Advisors,
LLC, and their respective directors, officers, shareholders, members, partners, employees, agents and Affiliates (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 Seaside (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each,
a “Seaside 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 Seaside 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 Seaside in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who
is not an Affiliate of Seaside, with respect to any of the transactions contemplated by the Transaction Documents (unless such
action is based upon a breach of Seaside’s representations, warranties or covenants under the Transaction Documents or any
agreements or understandings Seaside may have with any such stockholder or any violations by Seaside of state or federal securities
laws or any conduct by Seaside which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall
be brought against any Seaside Party in respect of which indemnity may be sought pursuant to this Agreement, Seaside 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 Seaside Party. Any Seaside 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 Seaside 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 Seaside 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 Seaside Party under this Agreement (y) for any settlement by a Seaside
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 Seaside Party’s breach
of any of the representations, warranties, covenants or agreements made by Seaside Party in this Agreement or in the other Transaction
Documents. The indemnification required by this Section 4.8 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 Seaside Party against the Company or others, and (y) any liabilities
the Company may be subject to pursuant to law.

 

4.9Listing
of Common Stock. The Company agrees to use its best efforts to maintain the listing or quotation (as applicable) of the Common
Stock on its current Trading Market and all other Trading Markets on which such Common Stock may hereafter be listed or quoted
(as applicable) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws
or rules of such Trading Market(s). The Company further agrees that, if the Company applies to have the Common Stock traded on
any Trading Market other than its current Trading Market, it will include in such application all of the Shares and will take such
other action as is reasonably necessary to cause all of the Shares to be listed on such other Trading Market. 

 

4.10Certain
Transactions and Confidentiality. Seaside covenants that neither it, nor any Person acting on its behalf or pursuant to any
understanding with it, will execute any purchases or sales, including Short Sales, of any of the Company’s securities during
the period commencing with the execution of this Agreement and ending upon the earlier of the date of termination of this Agreement
or the Final Subsequent Closing Date.  Seaside covenants that until such time as the transactions contemplated by this Agreement
are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, Seaside 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 Company expressly acknowledges and agrees that (i) Seaside makes no representation, warranty or covenant hereby that
it will not engage in effecting transactions in any securities of the Company after the time end of the period contemplated by
this Section 4.10, (ii) Seaside shall not be restricted or prohibited from effecting any transactions in any securities of the
Company in accordance with applicable securities laws from and after such time, and (iii) Seaside shall have no duty of confidentiality
to the Company or its Subsidiaries after such time, provided, that Seaside will not engage in any Short Sales while it holds
any of the Shares.  

 

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4.11Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Shares as required under Regulation D and
to provide a copy thereof in advance of such filing to Seaside. 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 Shares for, sale to Seaside 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 Seaside.

 

4.12Delivery
of Shares After Closing. The Company shall deliver, or cause to be delivered, to Seaside a certificate representing the applicable
Share Amount purchased by Seaside at each Closing within three (3) Trading Days of the applicable Closing Date.

 

4.13Piggyback
Registration Rights. If, at any time after the Initial Closing Date, the Company shall propose to file with the Commission
a registration statement under the Securities Act (other than on Forms S-4 or S-8 or any successor to such forms), the Company
shall give notice to Seaside and include in such registration statement all or any part of the Shares that Seaside requests to
be registered; provided, however, that the Company shall not be required to register any Shares pursuant to this
Section 4.13 that are eligible for resale pursuant to Rule 144 under the Securities Act without any requirement for the Company
to maintain current public information and without any limitation on volume or manner of sale. The Company shall use best efforts
to cause such registration statement to become effective as soon as practicable.

 

ARTICLE V.

MISCELLANEOUS

 

5.1Termination. 
This Agreement may be terminated:

 

(a)by
Seaside, upon written notice to the Company, if the Initial Closing has not been consummated on or before January 24, 2014;
or

 

(b)by
the Company, upon written notice to Seaside, at any time following the Initial Closing;

 

provided, however, that no
such termination pursuant to this Section 5.1 will affect the right of any party to sue for any breach by the other party (or parties).

 

5.2Fees
and Expenses. Except as otherwise set forth in this Agreement and as set forth in this Section 5.2 below, each party shall
pay the fees and expenses of its own 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 stamp and other taxes and duties levied in connection with the delivery of the Shares. Notwithstanding the foregoing, the
Company shall reimburse Seaside for the fees and expenses of its counsel, White White & Van Etten PC, in an amount equal to
(a) $7,500 at the Initial Closing and (b) $2,500 at every Subsequent Closing. Such legal fees may be withheld by Seaside from the
Subscription Amount to be paid for the Shares at such Closings.

 

5.3Entire
Agreement. The Transaction Documents, together with the schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof 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.

 

 

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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 electronic mail or facsimile at the electronic mail address or facsimile number set forth on the signature pages attached hereto
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 electronic mail or facsimile at the electronic mail address or 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 or as otherwise provided by written notice delivered
in compliance with this Section 5.4 by the addressee to the other party.

 

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 Seaside 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.

 

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
Seaside (other than by merger). Seaside may assign any or all of its rights under this Agreement to any Person to whom Seaside
assigns or transfers any Shares, provided that such transferee agrees in writing to be bound, with respect to the transferred
Shares, by the provisions of the Transaction Documents that apply to Seaside.

 

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 4.8.

 

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, 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 Action, suit or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such Action, suit 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 Action, suit 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 4.8, the prevailing party in such action 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, suit or proceeding.

 

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

 

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 the other party, it being
understood that both 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 “.pdf” 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.

 

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.

 

5.13Replacement
of Shares. If any certificate or instrument evidencing any Shares 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 Shares.

 

5.14Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
Seaside 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.

 

5.15Payment
Set Aside. To the extent that either party hereto makes a payment or payments to the other party hereto pursuant to any Transaction
Document or 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 other party, 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.

 

5.16Liquidated
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.

 

    	22

    	 

    

 

 

5.17Saturdays,
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.

 

5.18Construction.
The parties agree that each of them and/or their respective counsel has 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 hereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.

 

5.19WAIVER
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)

 

    	23

    	 

    

 

 

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.

 

	
        Soul and Vibe Interactive Inc.

         
	Address for Notice:
	
        By:_____________________________________

              Name: Peter Anthony Chiodo

              Title: CEO | President

         
	
        1660 South Hwy 100

        Suite 500

        St. Louis Park, MN 55416

        Attention: Peter Anthony Chiodo

        Fax: (763) 645-5364

        Email: tony@soulandvibe.com

	
         

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

         
	
         

        Sichenzia Ross Friedman Ference LLP

        61 Broadway

        32nd Floor

        New York, NY 10006

        Attention: Richard A. Friedman, Esq.

        Fax: (212) 930-9725

        Email: rfriedman@srff.com

 

	
        Seaside 88, LP

         

        By: Seaside 88 Advisors, LLC
	Address for Notice:
	
         

         

        By:_____________________________________

              Name: William J. Ritger

              Title: Manager

         
	
        750 Ocean Royale Way

        Suite 1101

        Juno Beach, FL 33408

        Attention: William J. Ritger and

        Denis M. O’Donnell, M.D.

        Fax: 866-358-6721

        Email: wjr@seaside88.com

        dod@seaside88.com

         

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

         

         

         
	
        White White & Van Etten PC

        45 School Street

        Boston, MA 02108

        Attention: David A. White, Esq.

        Fax: 617-225-0205

        Email: daw@wwvlaw.com

 

 

    	24

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