Document:

Exhibit 10.23.1

 

Oxysure
Systems, Inc.

 

AMENDED
CERTIFICATE OF DESIGNATION OF PREFERENCES, 

RIGHTS
AND LIMITATIONS

OF

SERIES
B CONVERTIBLE PREFERRED STOCK

 

PURSUANT
TO SECTION 151 OF THE 

Delaware
GENERAL CORPORATION LAW

 

The
undersigned, Julian T. Ross, Chief Executive Officer, does hereby certify that:

 

1.He
is the Chief Executive Officer of Oxysure Systems, Inc., a Delaware corporation (the “Corporation”).

 

2.The
Corporation is authorized to issue up to twenty five million (25,000,000) shares of preferred stock, of which 643,750 shares of
Series A Preferred Stock, and 620 Series B Preferred Stock are presently issued and outstanding.

 

3.
The following resolutions were duly adopted by the board of directors of the Corporation (the “Board of Directors”):

 

WHEREAS,
the certificate of incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting
of 25,000,000 shares, $0.0005 par value per share, issuable from time to time in one or more series;

 

WHEREAS,
the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms
of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting
any series and the designation thereof, of any of them; and

 

WHEREAS,
it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions
and other matters relating to a series of the preferred stock, which shall consist of, except as otherwise set forth in the Purchase
Agreement, up to 3,500 shares of the preferred stock which the Corporation has the authority to issue, as follows:

 

NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for
cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions
and other matters relating to such series of preferred stock as follows:

 

TERMS
OF PREFERRED STOCK

 

Section
1. Definitions. For the purposes hereof, the following terms shall have the following meanings:

 

“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 of the Securities Act.

 

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“Alternate
Consideration” shall have the meaning set forth in Section 7(e).

 

“Bankruptcy
Event” means any of the following events: (a) the Corporation or any Significant Subsidiary (as such term is defined
in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Corporation or any Significant Subsidiary thereof, (b) there is commenced against the Corporation or any Significant Subsidiary
thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Corporation or any Significant
Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding
is entered, (d) the Corporation or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for
it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e)
the Corporation or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Corporation
or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts, or (g) the Corporation or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates
its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of
effecting any of the foregoing.

 

“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 6(d).

 

“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.

 

“Buy-In”
shall have the meaning set forth in Section 6(c)(iv).

 

“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1 of the Purchase Agreement.

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto and all conditions precedent to (i) each Holder’s obligations to pay the Subscription Amount and (ii) the
Corporation’s obligations to deliver the Securities have been satisfied or waived.

 

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

 

“Common
Stock” means the Corporation’s common stock, par value $0.0004 per share, and stock of any other class of securities
into which such securities may hereafter be reclassified or changed.

 

“Common
Stock Equivalents” means any securities of the Corporation or the Subsidiaries including without limitation the Corporation’s
Series A Preferred Stock, Series B Preferred Stock and any other class of preferred stock other than the Preferred Stock which
would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock,
rights, options, warrants 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.

 

“Conversion
Amount” means the sum of the Stated Value at issue.

 

“Conversion
Date” shall have the meaning set forth in Section 6(a).

 

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“Conversion
Price” shall have the meaning set forth in Section 6(b).

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in
accordance with the terms hereof.

 

“Dividend
Conversion Price” shall have the meaning set forth in Section 3(a).

 

“Dividend
Conversion Shares” shall have the meaning set forth in Section 3(d).

 

“Dividend
Notice Period” shall have the meaning set forth in Section 3(a).

 

“Dividend
Payment Date” shall have the meaning set forth in Section 3(a).

 

“Dividend
Share Amount” shall have the meaning set forth in Section 3(a).

 

“Effective
Date” means the earliest of the date that (a) a registration statement has been declared effective by the Commission,
registering for public resale by the Holders thereof, of all of the Conversions Shares and Dividend Conversion Shares, or (b)
all of the Conversion and Dividend Conversion Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without
the requirement for the Company to be in compliance with the current public information requirement under Rule 144 and without
volume or manner-of-sale restrictions and Company counsel has delivered to the Transfer Agent and Holders a standing written unqualified
opinion that resales may then be made by Holders of the Conversion Shares and Dividend Conversion Shares pursuant to such exemption
which opinion shall be in form and substance reasonably acceptable to such holders.

 

“Equity
Conditions” means, during the period in question, (a) the Corporation shall have duly honored all conversions scheduled
to occur or occurring by virtue of one or more Notices of Conversion of the applicable Holder on or prior to the dates so requested
or required, if any, (b) the Corporation shall have paid all liquidated damages and other amounts owing to the applicable Holder
in respect of the Preferred Stock, (c) all of the Conversion Shares issuable pursuant to the Transaction Documents (and shares
issuable in lieu of cash payments of dividends) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions
or current public information requirements as determined by the counsel to the Corporation as set forth in a written opinion letter
to such effect, addressed and acceptable to the Transfer Agent and the affected Holders, (d) the Common Stock is trading on a
Trading Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading
Market (and the Corporation believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted
for the foreseeable future), (e) there is a sufficient number of authorized, but unissued and otherwise unreserved, shares of
Common Stock for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (f) there is no existing
Triggering Event and no existing event which, with the passage of time or the giving of notice, would constitute a Triggering
Event, (g) the issuance of the shares in question to the applicable Holder would not violate the limitations set forth in Section
6(d) herein, (h) there has been no public announcement of a pending or proposed Fundamental Transaction that has not been consummated,
and (i) the applicable Holder is not in possession of any information provided by the Corporation that constitutes, or may constitute,
material non-public information.

 

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

 

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“Exempt
Issuance” means the issuance of (a) shares of Common Stock and options to officers, employees, consultants, or directors
of the Company prior to and after the Original Issue Date in the amounts and on the terms set forth on Schedule 4.13 to the Purchase
Agreement, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder, including shares
paid as dividends on the Preferred Stock pursuant to Section 3(a) of this Certificate of Designation (subject to adjustment for
forward and reverse stock splits and the like that occur after the date hereof) and/or other securities exercisable or exchangeable
for or convertible into shares of Common Stock issued and outstanding on the Original Issue Date, provided that such securities
and any term thereof have not been amended since the Original Issue Date of this Agreement to increase the number of such securities
or to decrease the issue price, exercise price, exchange price or conversion price of such securities and which securities and
the principal terms thereof are set forth on Schedule 3.1(g) to the Purchase Agreement, and described in the SEC Reports filed
not later than ten (10) days before the Original Issue Date, (c) securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person
(or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset
in a business synergistic with the business of the Company and shall be intended to provide to the Company additional benefits
in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily
for the purpose of raising capital or with an entity whose primary business is investing in securities, and (d) securities issued
or issuable pursuant to the Purchase Agreement, this Certificate of Designation or the Warrants, including, without limitation,
Section 4.17 of the Purchase Agreement, or upon exercise or conversion or any such securities.

 

“Fundamental
Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual
or legal entity or “group” (as described in Rule 13d 5(b)(1) promulgated under the Exchange Act), other than a legal
entity majority owned by, or a group wholly consisting of, officers and directors of the Corporation and their Affiliates, of
effective control (whether through legal or beneficial ownership of capital stock of the Corporation, by contract or otherwise)
of in excess of 50% of the voting securities of the Corporation (other than by means of conversion or exercise of Preferred Stock
and the Securities issued together with the Preferred Stock), (b) the Corporation merges into or consolidates with any other Person,
or any Person merges into or consolidates with the Corporation and, after giving effect to such transaction, the stockholders
of the Corporation immediately prior to such transaction own less than 50% of the aggregate voting power of the Corporation or
the successor entity of such transaction, (c) the Corporation, directly or indirectly, effects any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions,
(d) a replacement at one time or within a one year period of more than one half of the members of the Board of Directors which
is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by
those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors
was approved by a majority of the members of the Board of Directors who are members on the Original Issue Date), (e) any, direct
or indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant
to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property
and has been accepted by the holders of 50% or more of the outstanding Common Stock, (f) the Corporation, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities,
cash or property, or (g) the execution by the Corporation of an agreement to which the Corporation is a party or by which it is
bound, providing for any of the events set forth in clauses (a) through (f) above.

 

“GAAP”
means United States generally accepted accounting principles.

 

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“Holder”
shall have the meaning given such term in Section 2.

 

“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $200,000 other than debt financing from a licensed United
States bank regularly engaged in such lending activity, and (b) 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 Corporation’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, but in all cases excluding trade accounts payable incurred by the Company and its Subsidiaries
in the ordinary course of business.

 

“Initial
Series B Preferred Shares” means the Series B Preferred Stock issued at or about December 26, 2013.

 

“Junior
Securities” means the Common Stock and all other Common Stock Equivalents of the Corporation, at any time outstanding
or issuable, including the Series A Preferred Stock of the Company.

 

“Liquidation”
shall have the meaning set forth in Section 5.

 

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

 

“2014
Milestone” ” means the Company reporting in a timely filed Form 10-K, audited gross revenues in the ordinary course
of business of not less than $2,800,000, determined according to GAAP for the 2014 fiscal year. A timely filed Form 10-K includes
a Form 10-K that is filed no later than the fifteenth calendar day following the prescribed due date pursuant to Rule 12b-25 of
the Exchange Act.

 

“2015
Milestone” means the Company reporting in a timely filed Form 10-K, audited gross revenues in the ordinary course of
business of not less than $3,500,000, determined according to GAAP for the 2015 fiscal year. A timely filed Form 10-K includes
a Form 10-K that is filed no later than the fifteenth calendar day following the prescribed due date pursuant to Rule 12b-25 of
the Exchange Act.

 

“Milestone
Default” means the failure to achieve the 2014 Milestone or the 2015 Milestone.

 

“Milestone
Shortfall Factor” means a fraction of the numerator of which is the actual amount of the gross revenues described in
the definition of Milestone and the denominator of which is $2,800,000 with respect to the 2014 Milestone, and which is $3,500,000
with respect to the 2015 Milestone.

 

“New
York Courts” shall have the meaning set forth in Section 11(d).

 

“Notice
of Conversion” shall have the meaning set forth in Section 6(a).

 

“Original
Issue Date” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers
of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such
Preferred Stock.

 

“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.

 

“Preferred
Stock” shall have the meaning set forth in Section 2.

 

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“Purchase
Agreement” means with respect to the Initial Series B Preferred Shares, the Securities Purchase Agreement entered into
at or about December 26, 2013; and with respect to the Subsequent Series B Preferred Shares, the Securities Purchase Agreement,
dated as of December __, 2014, among the Corporation and the original Holders, each as amended, modified or supplemented from
time to time in accordance with its terms.

 

“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.

 

“Securities”
means the Preferred Stock, the Warrants, the Warrant Shares and the Underlying Shares.

 

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

 

“Share
Delivery Date” shall have the meaning set forth in Section 6(c).

 

“Stated
Value” shall have the meaning set forth in Section 2.

 

“Subscription
Amount” shall mean, as to each Holder, the aggregate amount to be paid for the Preferred Stock purchased pursuant to
the Purchase Agreement as specified below such Holder’s name on the signature page of the Purchase Agreement and next to
the heading “Subscription Amount” and on the Exercise Notice in United States dollars and in immediately available
funds.

 

“Subsequent
Series B Preferred Shares” means the Series B Preferred Stock issued and issuable subsequent to the acceptance for filing
by the Secretary of State of Delaware of this Amended Certificate of Designation of Preferences, Rights and Limitations of Series
B Convertible Preferred Stock.

 

“Subsidiary”
means with respect to any entity at any date, any direct or indirect corporation, limited or general partnership, limited liability
company, trust, estate, association, joint venture or other business entity of which (A) more than 30% of (i) the outstanding
capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or
other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital
or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture
or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination,
owned or controlled directly or indirectly through one or more intermediaries, by such entity, or (B) is under the actual control
of the Corporation.

 

“Successor
Entity” shall have the meaning set forth in Section 7(e).

 

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

 

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

 

“Transaction
Documents” means this Certificate of Designation, the Purchase Agreement, the Warrants, the respective Escrow Agreements,
the exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions
contemplated pursuant to the Purchase Agreement.

 

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“Transfer
Agent” means Action Stock Transfer, with offices located at 2469 E. Fort Union Blvd, Ste 214 Salt Lake City,
UT 84121, and any successor transfer agent of the Corporation.

 

“Triggering
Event” shall have the meaning set forth in Section 10(a).

 

“Triggering
Redemption Amount” means, for each share of Preferred Stock, the sum of (a) the greater of (i) 100% of the Stated Value
and (ii) the product of (y) the VWAP on the Trading Day immediately preceding the date of the Triggering Event and (z) the Stated
Value divided by the then Conversion Price, (b) all accrued but unpaid dividends thereon, and (c) all liquidated damages and other
costs, expenses or amounts due in respect of the Preferred Stock.

 

“Triggering
Redemption Payment Date” shall have the meaning set forth in Section 10(b).

 

“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Preferred Stock, the
Warrant Shares and shares of Common Stock issued and issuable in lieu of the cash payment of dividends on the Preferred Stock
in accordance with the terms of this Certificate of Designation.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(b) of the Purchase Agreement.

 

“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 on the OTCQX, OTCQB or OTC Pink Marketplace maintained by the OTC Markets Group, Inc. (or a
similar organization or agency succeeding to its functions of reporting prices), the volume weighted average price of the Common
Stock on the first such facility (or a similar organization or agency succeeding to its functions of reporting prices), or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Corporation, the
fees and expenses of which shall be paid by the Corporation.

 

“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Holder at the Closing in accordance with the Purchase
Agreement.

 

“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.

 

Section
2. Designation, Amount and Par Value. The series of preferred stock shall be designated as its Series B Convertible
Preferred Stock (the “Preferred Stock”) and the number of shares so designated shall be 3,500 (which shall
not be subject to increase without the written consent of the holders of a majority of the then outstanding shares of Preferred
Stock (each, a “Holder” and collectively, the “Holders”)). Each share of Preferred Stock
shall have a par value of $0.0005 per share and a stated value equal to $1,000 (the “Stated Value”).

 

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Section
3. Dividends.

 

a)Dividends
in Cash or in Kind. Holders shall be entitled to receive, and the Corporation shall pay, cumulative dividends at the annual
rate per share (as a percentage of the Stated Value per share) of 6%, with respect to the Initial Series B Preferred Shares through
December 31, 2015, with respect to the Subsequent Series B Preferred Shares through December 31, 2016, and respectively, thereafter
at the annual rate of 18% (subject to increase pursuant to Section 10(b)), payable quarterly on March 31, June 30, September
30, and December 31, beginning on the second such date after the Original Issue Date and on each Conversion Date (with respect
only to Preferred Stock being converted) (each such date, a “Dividend Payment Date”) (if any Dividend Payment
Date is not a Trading Day, the applicable payment shall be due on the next succeeding Trading Day). Such Dividends may be paid,
at the option of the Corporation, in cash, in duly authorized, validly issued, fully paid and non-assessable shares of Common
Stock as set forth in this Section 3(a), or a combination thereof in each case as provided in the next sentence (the amount to
be paid in shares of Common Stock, the “Dividend Share Amount”). The form of dividend payments to each Holder
shall be determined in the following order of priority: (i) if funds are legally available for the payment of dividends and any
of the Equity Conditions have not been met during the 20 consecutive Trading Days immediately prior to the applicable Dividend
Payment Date (the “Dividend Notice Period”), in cash only, (ii) if funds are legally available for the payment
of dividends and all of the Equity Conditions have been met during the Dividend Notice Period, at the sole election of the Corporation,
in cash or shares of Common Stock which shall be valued solely for such purpose at 90% of the average of the VWAPs for the 10
consecutive Trading Days ending on the Trading Day that is immediately prior to the Dividend Payment Date (the “Dividend
Conversion Price”), (iii) if funds are not legally available for the payment of dividends and the Equity Conditions
have been met during the Dividend Notice Period, in shares of Common Stock which shall be valued solely for such purpose at the
Dividend Conversion Price, and (iv) if funds are not legally available for the payment of dividends and the Equity Conditions
have not been met during the Dividend Notice Period, then such dividends shall accrue to the next Dividend Payment Date. The Holders
shall have the same rights and remedies with respect to the delivery of any such shares as if such shares were being issued pursuant
to Section 6.

 

b)Participating
Dividends on As-Converted Basis. In addition to the payment of dividends pursuant to Section 3(a) herein, Holders shall be
entitled to receive, and the Corporation shall pay, dividends on shares of Preferred Stock equal to (on an as-if-converted-to-Common-Stock
basis) and in the same form as dividends (other than dividends in the form of Common Stock) actually paid on shares of Common
Stock when, as and if such dividends (other than dividends in the form of Common Stock) are paid on shares of Common Stock. The
Corporation shall pay no dividends (other than dividends in the form of Common Stock) on shares of Common Stock unless it simultaneously
complies with the previous sentence.

 

c)Corporation’s
Ability to Pay Dividends in Cash or Kind. On the Closing Date, the Corporation shall have notified the Holders whether or
not it may legally pay cash dividends as of the Closing Date. The Corporation shall promptly notify the Holders at any time the
Corporation shall become able or unable, as the case may be, to legally pay cash dividends. If at any time the Corporation has
the right to pay dividends in cash or shares of Common Stock, the Corporation must provide the Holders with at least 20 Trading
Days’ notice of its election to pay a regularly scheduled dividend in shares of Common Stock (the Corporation may indicate
in such notice that the election contained in such notice shall continue for later periods until revised by a subsequent notice).
If at any time the Corporation delivers a notice to the Holders of its election to pay the dividends in shares of Common Stock,
the Corporation shall, to the extent applicable, timely file a prospectus supplement pursuant to Rule 424 disclosing such
election. The aggregate number of shares of Common Stock otherwise issuable to a Holder on a Dividend Payment Date shall be reduced
by the number of shares of Common Stock previously issued to such Holder in connection with such Dividend Payment Date.

 

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d)Dividend
Calculations. Dividends on the Preferred Stock shall be calculated on the basis of a 360-day year, consisting of twelve 30
calendar day periods, and shall accrue daily commencing on the Original Issue Date, and shall be deemed to accrue from such date
whether or not earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally available
for the payment of dividends. Payment of dividends in shares of Common Stock (“Dividend Conversion Shares”)
shall otherwise occur pursuant to Section 6(c)(i) herein and, solely for purposes of the payment of dividends in shares, the Dividend
Payment Date shall be deemed the Conversion Date. Dividends shall cease to accrue with respect to any Preferred Stock converted,
provided that, the Corporation actually delivers the Conversion Shares within the time period required by Section 6(c)(i) herein.
Except as otherwise provided herein, if at any time the Corporation pays dividends partially in cash and partially in shares,
then such payment shall be distributed ratably among the Holders based upon the number of shares of Preferred Stock held by each
Holder on such Dividend Payment Date.

 

e)Late
Fees. Any dividends, whether paid in cash or shares of Common Stock, that are not paid within seven Trading Days following
a Dividend Payment Date shall continue to accrue and shall entail a late fee, which must be paid in cash, at the rate of 18% per
annum or the lesser rate permitted by applicable law which shall accrue daily from the Dividend Payment Date through and including
the date of actual payment in full.

 

f)Other
Securities. So long as at least 25% of the originally issued shares of Preferred Stock shall remain outstanding, neither the
Corporation nor any Subsidiary thereof shall redeem, purchase or otherwise acquire directly or indirectly any Junior Securities
except as expressly permitted by Section 10(a)(v). So long as 25% of the originally issued shares of Preferred Stock shall remain
outstanding, neither the Corporation nor any Subsidiary thereof shall directly or indirectly pay or declare any dividend or make
any distribution upon, nor shall any distribution be made in respect of, any Junior Securities, nor shall any monies be set aside
for or applied to the purchase or redemption (through a sinking fund or otherwise) of any Junior Securities or shares pari
passu with the Preferred Stock. So long as 15% of the originally issued shares of Preferred Stock shall remain outstanding,
neither the Corporation nor any Subsidiary thereof shall issue any security or Common Stock Equivalent which shall be pari
passu or senior to the Preferred Stock in terms of rights upon Liquidation or Dividends. The Series B Preferred Stock is pari
passu with the Preferred Stock in terms of rights upon Liquidation and Dividends.

 

Section
4. Voting Rights. Except as otherwise provided herein or as otherwise required by law, the Preferred Stock shall
have no voting rights. Holders of Preferred Stock shall vote together with the holders of Common Stock on an as converted basis
but may not vote such Preferred Stock, which would exceed the Beneficial Ownership Limitation. In any event, and notwithstanding
the foregoing limitation, as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without the affirmative
vote of the Holders of a majority of the then outstanding shares of the Preferred Stock, (a) alter or change adversely the powers,
preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (b) authorize or create
any class of stock ranking as to dividends, redemption or distribution of assets upon a Liquidation (as defined in Section 5)
senior to, or otherwise pari passu with, the Preferred Stock, (c) amend its certificate of incorporation or other
charter documents in any manner that adversely affects any rights of the Holders, (d) increase the number of authorized shares
of Preferred Stock, or (e) enter into any agreement with respect to any of the foregoing.

 

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Section
5. Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary
(a “Liquidation”), the Holders shall be entitled to receive out of the assets, whether capital or surplus,
of the Corporation an amount equal to the Stated Value, plus any accrued and unpaid dividends thereon and any other fees or liquidated
damages then due and owing thereon under this Certificate of Designation, for each share of Preferred Stock before any distribution
or payment shall be made to the holders of any Junior Securities and if the assets of the Corporation shall be insufficient to
pay in full such amounts, then the entire assets to be distributed to the Holders shall be ratably distributed among the Holders
in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Upon occurrence of a Liquidation which is also a Fundamental Transaction, the Holder may elect to receive the rights and benefits
of this section 5 and/or the rights and benefits set forth in Section 7(e) or any other rights set forth in the Transaction Documents.
The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein,
to each Holder.

 

Section
6. Conversion.

 

a)Conversions
at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after
the Original Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject to the limitations
set forth in Section 6(d)) determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price. Holders
shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a
“Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Preferred Stock to
be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred
Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date may not
be prior to the date the applicable Holder delivers by facsimile such Notice of Conversion to the Corporation (such date, the
“Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall
be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. The calculations and entries set
forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. To effect conversions of shares
of Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing the shares of Preferred Stock
to the Corporation, (although the Holder may surrender the Preferred Stock certificate to, and receive a replacement certificate
from the Corporation, at Holder’s election) unless all of the shares of Preferred Stock represented thereby are so converted,
in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly following the Conversion
Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be
canceled and shall not be reissued.

 

b)Conversion
Price. The conversion price for the Preferred Stock shall equal $0.55, subject to adjustment herein (the “Conversion
Price”). From and after a Milestone Default, the Conversion Price shall be reduced (but not increased) effective as
of January 1, 2015 with respect to the remaining Initial Series B Preferred Shares, if any, in connection with a Milestone Default
related to the 2014 Milestone; and as of January 1, 2016 with respect to the remaining Subsequent Series B Preferred Shares, if
any related to the 2015 Milestone, to an amount derived by multiplying the Conversion Price in effect on the date of occurrence
of a Milestone Default by the relevant Milestone Shortfall Factor, subject to further adjustment as described herein. Conversions
made after adjustments which result in a reduction of the Conversion Price shall have retroactive effect and the Corporation shall
promptly deliver to Holder additional Conversion Shares as a result of such retroactive reduction.

 

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		c)	Mechanics
                                         of Conversion

 

i.Delivery
of Certificate Upon Conversion. Not later than five (5) Trading Days after each Conversion Date (the “Share Delivery
Date”), the Corporation shall deliver, or cause to be delivered, to the converting Holder (A) a certificate or certificates
representing the Conversion Shares (however, the Corporation shall use reasonable commercial efforts to deliver such shares within
three (3) Trading Days), which, on or after the Effective Date, shall be free of restrictive legends and trading restrictions
(other than those which may then be required by the Purchase Agreement), provided that the Conversion Shares meet the requirements
of the Securities Act for removing such restrictive legends, representing the number of Conversion Shares being acquired upon
the conversion of the Preferred Stock (including, if the Corporation has given notice pursuant to Section 3(c) for payment of
dividends in shares of Common Stock at least 20 Trading Days prior to the date on which the Notice of Conversion is delivered
to the Corporation, shares of Common Stock representing the payment of accrued dividends otherwise determined pursuant to Section
3(a) but assuming that the Dividend Notice Period is the 20 Trading Days period immediately prior to the date on which the Notice
of Conversion is delivered to the Corporation and excluding for such issuance the condition that the Corporation deliver the Dividend
Share Amount as to such dividend payment prior to the commencement of the Dividend Notice Period), and (B) a bank check in the
amount of accrued and unpaid dividends (if the Corporation has elected or is required to pay accrued dividends in cash). On or
after the Effective Date, the Corporation shall deliver any certificate or certificates required to be delivered by the Corporation
under this Section 6 electronically through the Depository Trust Company or another established clearing corporation performing
similar functions.

 

ii.Failure
to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to
or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to
the Corporation at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which
event the Corporation shall promptly return to the Holder any original Preferred Stock certificate delivered to the Corporation
and the Holder shall promptly return to the Corporation the Common Stock certificates issued to such Holder pursuant to the rescinded
Conversion Notice.

 

iii.Obligation
Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares upon conversion
of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction
by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against
any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation
of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation
of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may have against such
Holder. In the event a Holder shall elect to convert any or all of the Stated Value of its Preferred Stock, the Corporation may
not refuse conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged
in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining
and/or enjoining conversion of all or part of the Preferred Stock of such Holder shall have been sought and obtained, and the
Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the Stated Value of Preferred Stock and
Dividends which are subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the
absence of such injunction, the Corporation shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion.
If the Corporation fails to deliver to a Holder such certificate or certificates pursuant to Section 6(c)(i) on the second Trading
Day after the Share Delivery Date applicable to such conversion, the Corporation shall pay to such Holder, in cash, as liquidated
damages and not as a penalty, for each $5,000 of Stated Value of Preferred Stock being converted, $50 per Trading Day (increasing
to $100 per Trading Day on the third Trading Day after such damages begin to accrue) for each Trading Day after such second Trading
Day after the Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall
limit a Holder’s right to pursue actual damages or declare a Triggering Event pursuant to Section 10 hereof for the Corporation’s
failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies
available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section
hereof or under applicable law.

 

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iv.Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder,
if the Corporation fails for any reason to deliver to a Holder the applicable certificate or certificates by the Share Delivery
Date pursuant to Section 6(c)(i), and if after such Share Delivery Date such Holder is required by its brokerage firm 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 such Holder of the Conversion Shares which such Holder was entitled to receive upon the
conversion relating to such Share Delivery Date (a “Buy-In”), then as such Holder’s sole remedy against
the Corporation and the Corporation’s sole liability in respect of such Buy-In the Corporation shall (A) pay in cash to
such Holder (in addition to any other remedies available to or elected by such Holder) the amount, if any, by which (x) such Holder’s
total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the
aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion at issue multiplied by
(2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage
commissions) and (B) at the option of such Holder, either reissue (if surrendered) the shares of Preferred Stock equal to the
number of shares of Preferred Stock submitted for conversion (in which case, such conversion shall be deemed rescinded) or deliver
to such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its
delivery requirements under Section 6(c)(i). For example, if a Holder purchases shares of Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect to which
the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was
a total of $10,000 under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder
$1,000. The Holder shall provide the Corporation written notice indicating the amounts payable to such Holder in respect of the
Buy-In and, upon request of the Corporation, 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 Corporation’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of the shares of Preferred Stock as required pursuant to the terms hereof.

 

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v.Reservation
of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of
its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock and
payment of dividends on the Preferred Stock, each as herein provided, free from preemptive rights or any other actual contingent
purchase rights of Persons other than the Holder (and the other holders of the Preferred Stock), not less than such aggregate
number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable
(taking into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding shares of Preferred
Stock and payment of dividends hereunder. The Corporation covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

 

vi.Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Preferred
Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation
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 Conversion Price or round up to the next whole share.

 

vii.Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Preferred Stock shall
be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or
delivery of such certificates, provided that the Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the
Holders of such shares of Preferred Stock and the Corporation shall not be required to issue or deliver such certificates unless
or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall
have established to the satisfaction of the Corporation that such tax has been paid. The Corporation shall pay all Transfer Agent
fees required for same-day processing of any Notice of Conversion.

 

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d)Beneficial
Ownership Limitation. The Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not
have the right to convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set forth
on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting as a
group together with such Holder or any of such 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 such Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of the Preferred
Stock with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are
issuable upon (i) conversion of the remaining, unconverted Stated Value of Preferred Stock beneficially owned by such Holder or
any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the
Corporation subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without
limitation, the Preferred Stock or the Warrants) beneficially owned by such Holder or any of its Affiliates.  Except as set
forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained
in this Section 6(d) applies, the determination of whether the Preferred Stock is convertible (in relation to other securities
owned by such Holder together with any Affiliates) and of how many shares of Preferred Stock are convertible shall be in the sole
discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder’s determination
of whether the shares of Preferred Stock may be converted (in relation to other securities owned by such Holder together with
any Affiliates) and how many shares of the Preferred Stock are convertible, in each case subject to the Beneficial Ownership Limitation.
To ensure compliance with this restriction, each Holder will be deemed to represent to the Corporation each time it delivers a
Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Corporation
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 6(d), in determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Corporation’s
most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by
the Corporation or (iii) a more recent written notice by the Corporation or the Transfer Agent setting forth the number of shares
of Common Stock outstanding.  Upon the written or oral request of a Holder, the Corporation shall within two Trading Days
confirm orally and in writing to such 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
Corporation, including the Preferred Stock, by such 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
conversion of Preferred Stock held by the applicable Holder. A Holder, upon not less than 61 days’ prior notice to the Corporation,
may increase or decrease the Beneficial Ownership Limitation provisions of this Section 6(d) applicable to its Preferred Stock
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 conversion of this Preferred Stock held by the
Holder and the provisions of this Section 6(d) shall continue to apply. Any such increase or decrease will not be effective until
the 61st day after such notice is delivered to the Corporation and shall only apply to such Holder and no other Holder.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 6(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation contained herein 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 Preferred Stock.

 

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Section
7. Certain Adjustments.

 

a)Stock
Dividends and Stock Splits. If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common
Stock Equivalents (which, for avoidance of doubt, shall not include Securities upon the exercise or exchange of or conversion
of any Securities issued or issuable pursuant to the Transaction Documents provided that such Securities and any term thereof
have not been amended since the Closing Date to increase the number of such Securities or to decrease the issue price, exercise
price, exchange price or conversion price of such Securities, any shares of Common Stock issued by the Corporation upon conversion
of, or payment of a dividend on, this Preferred Stock), (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number
of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the
Corporation, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant
to this Section 7(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)Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder of will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of such Holder’s Preferred
Stock (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

c)Pro
Rata Distributions. The Corporation, at any time while this Preferred Stock is outstanding, shall include Holders, on an as-if-converted-to-Common-Stock
basis, in all distributions of any kind (including cash and cash dividends) issued to all holders of Common Stock.

 

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d)Fundamental
Transaction. If, at any time while this Preferred Stock is outstanding, a Fundamental Transaction occurs, then, upon any subsequent
conversion of this Preferred Stock, the Holder shall have the right to receive, for each Conversion Share that would have been
issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation
in Section 6(d) on the conversion of this Preferred Stock), the number of shares of Common Stock of the successor or acquiring
corporation or of the Corporation, if it is the surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common
Stock for which this Preferred Stock is convertible immediately prior to such Fundamental Transaction (without regard to any limitation
in Section 6(d) on the conversion of this Preferred Stock). For purposes of any such conversion, the determination of the Conversion
Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion
Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of this Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate
of Designation with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions
and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration. The Corporation shall cause
any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Corporation under this Certificate of Designation and the other Transaction
Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 7(d) pursuant to written agreements
in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the holder of this Preferred Stock, deliver to the Holder in exchange for
this Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this Preferred Stock which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or
its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Preferred Stock
(without regard to any limitations on the conversion of this Preferred Stock) prior to such Fundamental Transaction, and with
a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Preferred
Stock immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation
and the other Transaction Documents referring to the “Corporation” shall refer instead to the Successor Entity), and
may exercise every right and power of the Corporation and shall assume all of the obligations of the Corporation under this Certificate
of Designation and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Corporation
herein.

 

e)Calculations.
All calculations under this Section 7 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 7, 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 any treasury shares of the Corporation) issued and outstanding.

 

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f)Notice
to the Holders.

 

i.Adjustment
to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7, the Corporation
shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.

 

ii.Notice
to Allow Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock,
(C) the Corporation shall authorize the granting to all holders of the Common Stock of 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 Corporation shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation
is a party, any sale or transfer of all or substantially all of the assets of the Corporation, or any compulsory share exchange
whereby the Common Stock is converted into other securities, cash or property or (E) the Corporation shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall
cause to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock, and shall cause to
be delivered to each Holder at its last address as it shall appear upon the stock books of the Corporation, at least twenty (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 deliver such
notice or any defect therein or in the delivery 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 Corporation or any of the Subsidiaries, the Corporation shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Holder shall remain entitled to convert the Conversion Amount of this Preferred Stock (or
any part hereof) during the 20-day period commencing on the date of such notice through the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.

 

Section
8.Redemption. The Corporation shall have no right to require Holders to surrender Preferred Stock for redemption.

 

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Section
9. Negative Covenants. As long as at least 15% of the originally issued shares of Preferred Stock are outstanding,
unless the holders of more than 50% in Stated Value of the then outstanding shares of Preferred Stock shall have otherwise given
prior written consent, the Corporation shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:

 

a)repay,
repurchase or offer to repay, repurchase or otherwise acquire shares of its Common Stock, Common Stock Equivalents or Junior Securities,
other than as to the Conversion Shares or Warrant Shares as permitted or required under the Transaction Documents;

 

b)enter
into any transaction with any Affiliate of the Corporation which would be required to be disclosed in any public filing with the
Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested
directors of the Corporation (even if less than a quorum otherwise required for board approval);

 

c)incur
any Indebtedness; or

 

d)enter
into any agreement with respect to any of the foregoing.

 

In
addition, as long as any shares of Preferred Stock are outstanding, unless the holders of more than 50% in Stated Value of the
then outstanding shares of Preferred Stock shall have otherwise given prior written consent, the Corporation shall not, directly
or indirectly, amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any
manner that materially and adversely affects any rights of the Holder; this provision notwithstanding, the Corporation shall be
entitled to increase its authorized share capital, issue new Common Stock or Common Stock Equivalents or issue other instruments
in connection with a merger or acquisition described in the definition of Exempt Issuance part (c), or a listing on a national
stock exchange.

 

Section
10. Redemption Upon Triggering Events.

 

a)“Triggering
Event” means, wherever used herein any of the following events (whatever the reason for such event and whether such
event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court,
or any order, rule or regulation of any administrative or governmental body):

 

i.the
Corporation shall fail to deliver certificates representing Conversion Shares issuable upon a conversion hereunder that comply
with the provisions hereof prior to the fifth Trading Day after such shares are required to be delivered hereunder, or the Corporation
shall provide written notice to any Holder, including by way of public announcement, at any time, of its intention not to comply
with requests for conversion of any shares of Preferred Stock in accordance with the terms hereof;

 

ii.the
Corporation shall fail for any reason to pay in full the amount of cash due pursuant to a Buy-In within five calendar days after
notice therefor is delivered hereunder;

 

iii.the
Corporation shall fail to have available a sufficient number of authorized and unreserved shares of Common Stock to issue to such
Holder upon a conversion hereunder;

 

iv.unless
specifically addressed elsewhere in this Certificate of Designation as a Triggering Event, the Corporation shall fail to observe
or perform any other covenant, agreement or warranty contained in, or otherwise commit any breach of the Transaction Documents,
which failure or breach could have a Material Adverse Effect, and such failure or breach shall not, if subject to the possibility
of a cure by the Corporation, have been cured within 30 calendar days after the date on which such failure or breach shall have
first occurred;

 

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v.so
long as at least 15% of the originally issued shares of Preferred Stock remain outstanding, the Corporation shall not redeem more
than a de minimis number of Junior Securities other than as to repurchases of Common Stock or Common Stock Equivalents
from departing employees, officers and directors, provided that, while any of the Preferred Stock remains outstanding, such repurchases
shall not exceed an aggregate of $50,000 in any twelve month period from all employees, officers and directors;

 

vi.there
shall have occurred a Fundamental Transaction;

 

vii.there
shall have occurred a Bankruptcy Event;

 

viii.the
Common Stock shall fail to be listed or quoted for trading on a Trading Market for ten or more Trading Days in any twelve month
period, which need not be consecutive Trading Days;

 

ix.any
monetary judgment, writ or similar final process shall be entered or filed against the Corporation, any subsidiary or any of their
respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days; or

 

x.any
breach of the agreements delivered to the initial Holders at the Closing pursuant to Section 2.2(a) of the Purchase Agreement,
which breach could have a Material Adverse Effect.

 

b)Upon
the occurrence of a Triggering Event, each Holder shall (in addition to all other rights it may have hereunder or under applicable
law) have the right, exercisable at the sole option of such Holder, to require the Corporation to, (A) with respect to the Triggering
Events set forth in Sections 10(a)(ii), (iii), (v), (vi), and (vii) (as to voluntary filings only), redeem all of the Preferred
Stock then held by such Holder for a redemption price, in cash, equal to the Triggering Redemption Amount or (B) at the option
of each Holder and with respect to the Triggering Events set forth in Sections 10(a)(i), (iv), (vi) (as to Fundamental Transactions
not approved by the Board of Directors of the Corporation), (vii) (as to involuntary filings only), (viii), (ix) and (x), either
(a) redeem all of the Preferred Stock then held by such Holder for a redemption price, in shares of Common Stock, equal to a number
of shares of Common Stock equal to the Triggering Redemption Amount divided by 75% of the average of the 10 VWAPs immediately
prior to the date of election hereunder or (b) increase the dividend rate on all of the outstanding Preferred Stock held by such
Holder to 18% per annum thereafter. The Triggering Redemption Amount, in cash or in shares, shall be due and payable or issuable,
as the case may be, within five Trading Days of the date on which the notice for the payment therefor is provided by a Holder
(the “Triggering Redemption Payment Date”). If the Corporation fails to pay in full the Triggering Redemption
Amount hereunder on the date such amount is due in accordance with this Section (whether in cash or shares of Common Stock), the
Corporation will pay interest thereon at a rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable
law, accruing daily from such date until the Triggering Redemption Amount, plus all such interest thereon, is paid in full. For
purposes of this Section, a share of Preferred Stock is outstanding until such date as the applicable Holder shall have received
Conversion Shares upon a conversion (or attempted conversion) thereof that meets the requirements hereof or has been paid the
Triggering Redemption Amount in cash.

 

    	19

    	 

    

 

Section
11.Miscellaneous.

 

a)Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation,
any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service, addressed to the Corporation, at: 10880 John W. Elliott Drive, Suite 600, Frisco, TX 75033, Attn: Julian T. Ross,
Chief Executive Officer, facsimile: 972-294-6501, or such other facsimile number or address as the Corporation may specify for
such purposes by notice to the Holders delivered in accordance with this Section 11. Any and all notices or other communications
or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent
by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder
appearing on the books of the Corporation, or if no such facsimile number or address appears on the books of the Corporation,
at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (New York City time) on any date,
(ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
number set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

b)Absolute
Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the
obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages, accrued dividends and accrued interest,
as applicable, on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.

 

c)Lost
or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen
or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated
certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of
Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction
of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.

 

    	20

    	 

    

 

d)Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation
shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard
to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement
and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its
respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts
sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Certificate of Designation 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 applicable law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising
out of or relating to this Certificate of Designation or the transactions contemplated hereby. If any party shall commence an
action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.

 

e)Waiver.
Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as
or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate
of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to
any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or
any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of
Designation on any other occasion. Any waiver by the Corporation or a Holder must be in writing.

 

f)Severability.
If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation
shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable
to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates
the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the
maximum rate of interest permitted under applicable law.

 

g)Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.

 

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

 

i)Status
of Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be issued pursuant to the Purchase Agreement.
If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status
of authorized but unissued shares of preferred stock and shall no longer be designated as Series B Convertible Preferred Stock.

 

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

 

    	21

    	 

    

 

RESOLVED,
FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation
be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and
Limitations in accordance with the foregoing resolution and the provisions of Delaware law.

 

IN
WITNESS WHEREOF, the undersigned has executed this Certificate this 23rd day of December, 2014.

 

	 	 
	 	Name: Julian T. Ross
	 	Title:   CEO

 

 

22Exhibit 10.26

 

SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”) is dated as of December __, 2014, between Oxysure Systems,
Inc., a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and permitted assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell
to each Purchaser, and each Purchaser, severally and not jointly, 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 each Purchaser agree as follows:

 

ARTICLE
I.

DEFINITIONS

 

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

 

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.

 

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

 

“Additional
Closing” shall have the meaning ascribed to such term in Section 2.4(a).

 

“Additional
Closing Subscription Amount” shall have the meaning ascribed to such term in Section 2.4(a).

 

“Additional
Closing Date” shall have the meaning ascribed to such term in Section 2.4(a).

 

“Additional
Closing Exercise Notice” shall have the meaning ascribed to such term in Section 2.4(a)

 

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

 

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

 

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

 

“Certificate
of Designation” means the Certificate of Designation to be filed prior to the Closing by the Company with the Secretary
of State of Delaware, in the form of Exhibit A attached hereto.

 

    	1

    	 

    

 

“Closing”
means the Closing of the purchase and sale of the Securities pursuant to Section 2.1.

 

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

 

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

 

“Common
Stock” means the common stock of the Company, par value $0.0004 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

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

 

“Company
Counsel” means, Horzepa Spiegel & Associates PC, 802 Lovett Boulevard, Houston, Texas 77006, Attn: Joseph Horzepa,
facsimile: (713) 861-2301.

 

“Conversion
Price” shall have the meaning ascribed to such term in the Certificate of Designation.

 

“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

 

“Effective
Date” means the earliest of the date that (a) a registration statement has been declared effective by the Commission
registering for public resale by the holders thereof, of all of the Underlying Shares, or (b) all of the Underlying Shares have
been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance
with the current public information requirement under Rule 144 and without volume or manner-of-sale restrictions and Company counsel
has delivered to the Transfer Agent and such holders a standing written unqualified opinion that resales may then be made by such
holders of the Underlying Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable
to such holders.

 

“Equity
Line of Credit” shall have the meaning ascribed to such term in Section 4.13.

 

“Escrow
Agreement” means the escrow agreement to be employed in connection with the sale of the Securities, a copy of which
is annexed hereto as Exhibit D.

 

“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.

 

    	2

    	 

    

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock and options to officers, employees, or directors of the Company
prior to and after the Closing Date in the amounts and on the terms set forth on Schedule 4.13, (b) securities upon the
exercise or exchange of or conversion of any Securities issued hereunder, including shares paid as dividends on the Preferred
Stock pursuant to Section 3(a) of the Certificate of Designation (subject to adjustment for forward and reverse stock splits and
the like that occur after the date hereof) and/or other securities exercisable or exchangeable for or convertible into shares
of Common Stock issued and outstanding on the date of this Agreement, provided that such securities and any term thereof have
not been amended since the date of this Agreement to increase the number of such securities or to decrease the issue price, exercise
price, exchange price or conversion price of such securities and which securities and the principal terms thereof are set forth
on Schedule 3.1(g), and described in the SEC Reports filed not later than ten (10) days before the Closing Date, (c) securities
issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company,
provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its
subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall
be intended to provide to the Company substantial additional benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities, and (d) securities issued or issuable pursuant to this Agreement, the Certificate of Designation
or the Warrants, including, without limitation, Section 4.17, or upon exercise or conversion of any such securities.

 

“Exercise
Notice” shall have the meaning ascribed to such term in Section 2.4.

 

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

 

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

 

“FDA
Product” shall have the meaning ascribed to such term in Section 3.1(mm).

 

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

 

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

 

“G&M”
shall mean Grushko & Mittman, P.C., with offices located at 515 Rockaway Avenue, Valley Stream, New York 11581, Fax: 212-697-3575.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.17(a).

 

    	3

    	 

    

 

“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.

 

“Preferred
Stock” means the 1,500 shares of the Company’s Series B Convertible Preferred Stock issued or issuable hereunder
having the rights, preferences and privileges set forth in the Amended Certificate of Designation, in the form of Exhibit A
hereto.

 

“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.17.

 

“Prior
Funding” shall mean the transaction among the Company and Purchasers pursuant to the Prior Funding Agreement, pursuant
to which a closing took place on December 26, 2013.

 

“Prior
Funding SPA” shall mean the Securities Purchase Agreement entered into by the company and Purchasers with respect to
the Prior Funding.

 

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

 

“Pro-Rata
Portion” shall have the meaning ascribed to such term in Section 4.17(e).

 

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

 

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

 

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

 

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

 

“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants
or conversion in full of all shares of Preferred Stock, ignoring any conversion or exercise limits set forth therein, and assuming
that any previously unconverted shares of Preferred Stock will be held until the third anniversary of the Closing Date.

 

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

 

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

 

“Securities”
means the Preferred Stock, the Warrants, and the Underlying Shares.

 

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

 

“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). 

 

    	4

    	 

    

 

“Stated
Value” means $1,000 per share of Preferred Stock.

 

“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Preferred Stock and Warrants purchased
hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately available funds.

 

“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.17.

 

“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.17.

 

“Subsidiary”
means with respect to any entity at any date, any direct or indirect corporation, limited or general partnership, limited liability
company, trust, estate, association, joint venture or other business entity of which (A) more than 30% of (i) the outstanding
capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or
other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital
or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture
or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination,
owned or controlled directly or indirectly through one or more intermediaries, by such entity, or (B) is under the actual control
of the Company.

 

“Termination
Date” shall have the meaning ascribed to such term in Section 2.1.

 

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

 

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

 

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

 

“Transfer
Agent” means Action Stock Transfer, with offices located at 2469 E. Fort Union Blvd, Ste 214 Salt Lake City, UT 84121,
and any successor transfer agent of the Company.

 

“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Preferred Stock and
upon exercise of the Warrants and issued and issuable in lieu of the cash payment of dividends on the Preferred Stock in accordance
with the terms of the Certificate of Designation.

 

“Variable
Priced Equity Linked Instruments” shall have the meaning ascribed to such term in Section 4.13.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13.

 

    	5

    	 

    

 

“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 on the OTCQX, OTCQB or OTC Pink Marketplace maintained by the OTC Markets Group, Inc. (or a
similar organization or agency succeeding to its functions of reporting prices), the volume weighted average price of the Common
Stock on the first such facility (or a similar organization or agency succeeding to its functions of reporting prices), or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.

 

“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section
2.2(a) hereof, in the form of Exhibit C attached hereto.

 

“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.

 

ARTICLE
II.

PURCHASE
AND SALE

 

2.1Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, an aggregate of 525 shares of Preferred Stock with an aggregate Stated Value for each Purchaser equal to such
Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and Warrants as determined
pursuant to Section 2.2(a) (such purchase and sale being the “Closing”). Each Purchaser shall deliver to the
Company such Purchaser’s Subscription Amount, and the Company shall deliver to each Purchaser its respective shares of Preferred
Stock and Warrants, as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items
set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2
and 2.3, the Closing shall occur at the offices of G&M or such other location as the parties shall mutually agree. Notwithstanding
anything herein to the contrary, the Closing Date shall occur on or before December 31, 2014 (“Termination Date”).
If a Closing is not held on or before the Termination Date, the Company shall cause all subscription documents and funds to be
returned, without interest or deduction to each prospective Purchaser.

 

2.2Deliveries.

 

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

 

(i)this Agreement duly executed by the Company;

 

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

 

    	6

    	 

    

 

(iii)a
certificate evidencing a number of shares of Preferred Stock equal to such Purchaser’s Subscription Amount divided by the
Stated Value, registered in the name of such Purchaser, and evidence of the filing and acceptance of the Certificate of Designation
from the Secretary of State of Delaware;

 

(iv)a
Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100% of such Purchaser’s
Subscription Amount divided by $0.55, with an exercise price equal to $1.20 per share, subject to adjustment as provided therein;

 

(v)the
Escrow Agreement duly executed by the Company; and

 

(vi)the acknowledgement described in Section 3.1(nn).

 

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

 

(i)
this Agreement duly executed by such Purchaser;

 

(ii)such
Purchaser’s Subscription Amount by wire transfer or as otherwise permitted under the Escrow Agreement, to the Escrow Agent;
and

 

(iii)the
Escrow Agreement duly executed by such Purchaser.

 

2.3Closing
Conditions.

 

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

 

(i)the
accuracy in all material respects (determined without regard to any materiality, Material Adverse Effect or other similar qualifiers
therein) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific
date therein in which case they shall be accurate as of such date);

 

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

 

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

 

(b)The
respective obligations of a Purchaser hereunder to effect the Closing unless waived by such Purchaser, are subject to the following
conditions being met:

 

(i)the
accuracy in all material respects (determined without regard to any materiality, Material Adverse Effect or other similar qualifiers
therein) on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date
therein in which case they shall be accurate as of such date);

 

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

 

    	7

    	 

    

 

(iii)the
Escrow Agent shall have received executed signature pages to this Agreement with an aggregate Subscription Amount of $525,000
prior to the Closing;

 

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

 

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

 

(vi)The
filing with the Secretary of State of Delaware of the Amended Certificate of Designation of Preferences, Rights and Limitations
of Series B Convertible Preferred Stock, in the form annexed hereto as Exhibit A.

 

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

 

2.4Additional
Closings.

 

(a)Subject
to the satisfaction of the conditions set forth below, until one (1) year after the Closing Date the Company may sell to the Purchasers
and the Purchasers shall be required to purchase from the Company additional Preferred Stocks and Warrants for the aggregate consideration
of up to $1,050,000, (“Additional Closing Subscription Amount”), in up to two (2) closings (each an “Additional
Closing”). The date an Additional Closing occurs is an “Additional Closing Date”.

 

(b)The
Company may exercise its right to conduct an Additional Closing with respect to up to $525,000 of Additional Closing Subscription
Amount provided the company has given written notice to the Purchasers requiring each of them to require its respective Pro Rata
Portion of such Additional Closing Subscription Amount within ten (10) Trading Days after the VWAP for the Common Stock is not
less than $1.05 for ten (10) consecutive Trading Days and the trading volume on the Trading Market for which the VWAP is determined
is not less than 25,000 shares of Common Stock on a Trading Day during such ten (10) Trading Day period.

 

(c)The
Company may exercise its right to conduct an Additional Closing with respect to up to $525,000 of Additional Closing Subscription
Amount provided the company has given written notice to the Purchasers requiring each of them to require its respective Pro Rata
Portion of such Additional Closing Subscription Amount within ten (10) Trading Days after the VWAP for the Common Stock is not
less than $1.30 for ten (10) consecutive Trading Days and the trading volume on the Trading Market for which the VWAP is determined
is not less than 25,000 shares of Common Stock on a Trading Day during such ten (10) Trading Day period.

 

    	8

    	 

    

 

2.5Additional
Closing Deliveries.

 

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

 

(i)a
notice of exercise of the right to conduct an Additional Closing indicating thereon which of Section 2.4 (a), (b) or (c) above
is being exercised (the “Additional Closing Exercise Notice”). The Additional Closing Exercise Note must include details
of the VWAP and trading volume relied upon by the Company, and state the proposed Additional Closing Date which must be not later
than ten (10) Trading Days after the date of such Additional Closing Exercise Notice.

 

(ii)bring
down legal opinions of Company Counsel to the legal opinion delivered at the Closing;

 

(iii)    a
certificate evidencing a number of Shares equal to such Purchaser’s Pro Rata Portion of the Additional Closing Subscription
Amount divided by the Stated Value, registered in the name of such Purchaser;

 

(iv)a
Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to (100%) of such
Purchaser’s Additional Closing Subscription Amount divided by the Conversion Price in effect on such Additional Closing
Date, having an exercise price equal to the then in effect exercise price of the Warrants delivered at the Closing, subject to
adjustment therein; and

 

(v)a
certificate signed by the Company’s CEO or CFO stating that all of the conditions to completing an Additional Closing as
set forth in section 2.6 (b) have been satisfied.

 

(b)On
or prior to the Additional Closing Date, each Purchaser shall deliver to the Company such Purchaser’s Additional Closing
Subscription Amount by wire transfer to the account specified in the Additional Closing Exercise Notice.

 

2.6Additional
Closing Conditions.

 

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

 

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

 

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

 

(iii)the
delivery by each Purchaser of such Purchaser’s Additional Closing Subscription Amount.

 

(b)The
respective obligations of a Purchaser hereunder in connection with any Additional Closing are, unless waived by such Purchaser,
subject to the following conditions being met:

 

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

 

    	9

    	 

    

 

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

 

(iii)
the delivery by the Company of the items set forth in Section 2.5(a) of this Agreement;

 

(iv)not
less than ten (10) Trading Days shall have elapsed since the last to occur of the Closing Date or an Additional Closing Date;

 

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

 

(vi)all
of the Equity Conditions as defined in the Certificate of Designation are in effect, except for item (c) thereof; and

 

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

 

2.7Purchaser’s
Option. Provided the conditions to closing set forth in Section 2.6(a) are or will be satisfied, a Purchaser, may require
the Company to conduct one or more Subsequent Closings with respect to such Purchaser’s aggregate Pro Rata Portion of the
Subsequent Closing Subscription Amount without regard to the occurrence and satisfaction of the conditions set forth in Section
2.4 and at the sole discretion of such Purchaser, the waiver or postponement of one or more of the deliveries required pursuant
to Section 2.5(a). A Purchaser may exercise such right by delivery of a notice to the Company. The Company must conduct a Subsequent
Closing not later than ten (10) Trading Days after such notice of exercise is given to the Company.

 

    	10

    	 

    

 

ARTICLE
III.

REPRESENTATIONS
AND WARRANTIES

 

3.1Representations
and Warranties of the Company. Except as set forth in the SEC Reports or the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof and shall qualify any representation made herein only to the extent of the disclosure contained
in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties
to each Purchaser:

 

(a)Subsidiaries.
All of the direct and indirect subsidiaries of the Company and the Company’s ownership interests therein are set forth on
Schedule 3.1(a). The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary
free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company
has no Subsidiaries relevant to any component of this Agreement, then such reference shall not be applicable.

 

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

 

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

 

    	11

    	 

    

 

(d)No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents, the
issuance and sale of the Securities 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) subject to Required Approvals, conflict
with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in
the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected,
or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.

 

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

 

(f)Issuance
of the Securities. The Securities 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.
The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying
Shares at least equal to the Required Minimum on the date hereof.

 

(g)Capitalization.
The capitalization of the Company is as set forth in 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 conversion and/or exercise of Common
Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has
any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as disclosed on Schedule 3.1(g), there are no outstanding options, employee
or incentive stock option plans 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. Except as set
forth on Schedule 3.1(g), the issuance and sale of the Securities will not obligate the Company to issue shares of Common
Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in material compliance
with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board
of Directors or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s stockholders.

 

    	12

    	 

    

 

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

 

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

 

(j)Litigation.
Except as described in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local
or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have
or reasonably be expected to result in a Material Adverse Effect. Except as set forth in the SEC Reports, since December 31, 2013,
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.

 

    	13

    	 

    

 

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

 

(l)Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has
the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been in violation 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. Except as set forth on Schedule 3.1(n), the Company and the Subsidiaries have good and marketable title
in fee simple to all real property (if any) owned by them and good and marketable title in all personal property owned by them
that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i)
Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to
be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes,
for which appropriate reserves have been made in accordance with GAAP and, the payment of which is neither delinquent nor subject
to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

 

    	14

    	 

    

 

(o)Intellectual
Property.

 

(i)The
term “Intellectual Property Rights” includes:

 

1.the
name of the Company and each Subsidiary, all fictional business names, trading names, registered and unregistered trademarks,
service marks, and applications of the Company and each Subsidiary (collectively, “Marks'');

 

2.all
patents, patent applications, and inventions and discoveries that may be patentable of the Company and each Subsidiary (collectively,
“Patents'');

 

3.all
copyrights in both unpublished works and published works of the Company and each Subsidiary (collectively, “Copyrights”);

 

4.all
rights in mask works of the Company and each Subsidiary (collectively, “Rights in Mask Works''); and

 

5.all
know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology,
plans, drawings, and blue prints (collectively, “Trade Secrets''); owned, used, or licensed by the Company and each
Subsidiary as licensee or licensor

 

(ii)Agreements.
Except as disclosed in the Reports, there are no outstanding and, to Company’s knowledge, no threatened disputes or disagreements
with respect to any agreements relating to any Intellectual Property Rights to which the Company is a party or by which the Company
is bound.

 

(iii)Know-How
Necessary for the Business. The Intellectual Property Rights are all those necessary for the operation of the Company’s
businesses as it is currently conducted. The Company is the owner of all right, title, and interest in and to each of the Intellectual
Property Rights, free and clear of all liens, security interests, charges, encumbrances, equities, and other adverse claims, and
has the right to use all of the Intellectual Property Rights. To the Company’s knowledge, no employee of the Company has
entered into any contract that restricts or limits in any way the scope or type of work in which the employee may be engaged or
requires the employee to transfer, assign, or disclose information concerning his work to anyone other than of the Company.

 

(iv)Patents.
The Company is the owner of all right, title and interest in and to each of the Patents, free and clear of all Liens and other
adverse claims. All of the issued Patents are currently in compliance with formal legal requirements (including payment of filing,
examination, and maintenance fees and proofs of working or use), are valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety days after the Closing Date. No Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To the Company’s knowledge except as set forth in Schedule 3.1(o):
(1) there is no potentially interfering patent or patent application of any third party, and (2) no Patent is infringed or has
been challenged or threatened in any way. To the Company’s knowledge, none of the products manufactured and sold, nor any
process or know-how used, by the Company infringes or is alleged to infringe any patent or other proprietary right of any other
Person.

 

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(v)Trademarks.
The Company is the owner of all right, title, and interest in and to each of the Marks, free and clear of all Liens and other
adverse claims. All Marks that have been registered with the United States Patent and Trademark Office are currently in compliance
with all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability and
renewal applications), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due
within ninety days after the Closing Date. No Mark has been or is now involved in any opposition, invalidation, or cancellation
and, to the Company’s knowledge, no such action is threatened with respect to any of the Marks. To the Company’s knowledge:
(1) there is no potentially interfering trademark or trademark application of any third party, and (2) no Mark is infringed or
has been challenged or threatened in any way. To the Company’s knowledge, none of the Marks used by the Company infringes
or is alleged to infringe any trade name, trademark, or service mark of any third party.

 

(vi)Copyrights.
The Company is the owner of all right, title, and interest in and to each of the Copyrights, free and clear of all Liens and other
adverse claims. All the Copyrights are valid and enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within ninety days after the date of the Closing. To the Company’s knowledge, no Copyright is infringed or has
been challenged or threatened in any way. To the Company’s knowledge, none of the subject matter of any of the Copyrights
infringes or is alleged to infringe any copyright of any third party or is a derivative work based on the work of a third party.
All works encompassed by the Copyrights have been marked with the proper copyright notice.

 

(vii)Trade
Secrets. With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate, and sufficient
in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge or memory
of any individual. The Company has taken all reasonable precautions to protect the secrecy, confidentiality, and value of its
Trade Secrets. The Company has good title and an absolute (but not necessarily exclusive) right to use the Trade Secrets. The
Trade Secrets are not part of the public knowledge or literature, and, to the Company’s knowledge, have not been used, divulged,
or appropriated either for the benefit of any Person (other the Company) or to the detriment of the Company. No Trade Secret is
subject to any adverse claim or has been challenged or threatened in any way.

 

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

 

(q)Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or
any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $100,000 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) except as disclosed on Schedule 3.1(g).

 

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

 

(s)Certain
Fees. Except as set forth on Schedule 3.1(s), no brokerage, finder’s fees, commissions or due diligence fees
are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers
shall have no obligation with respect to any such fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section 3.1(s) that may be due in connection with the transactions contemplated by the Transaction
Documents. The Due Diligence Fee recipient may participate in this Offering and may utilize its Note in lieu of a cash payment
for such Due Diligence Fee recipient’s Subscription Amount.

 

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

 

(u)Registration
Rights. No Person, other than the Purchasers, has any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any Subsidiary.

 

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(v)Reporting
Company/Shell Company. The Company is a publicly-held company subject to reporting obligations pursuant to Sections 13 or
15(d) of the Exchange Act. Pursuant to the provisions of the Exchange Act, the Company has timely filed all reports and other
materials required to be filed by the Company thereunder with the SEC during the preceding twelve months. As of the Closing Date,
the Company is not a “shell company” nor “former shell company” as those terms are employed in Rule 144
under the Securities Act. 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.

 

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

 

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

 

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

 

    	18

    	 

    

 

(z)Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, and the Company’s good faith estimate
of the fair market value of its assets, after giving effect to the receipt by the Company of the proceeds from the sale of the
Securities hereunder: (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be
paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as
they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted
and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business
conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current
cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities
when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as
they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no
knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(z) sets forth
as of the date hereof all outstanding liens secured and unsecured Indebtedness of the Company or any Subsidiary, or for which
the Company or any Subsidiary has commitments which has not been disclosed in the Reports. For the purposes of this Agreement,
“Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $200,000 other than
debt financing from a licensed United States bank regularly engaged in such lending activity which may include the issuance of
a nominal amount of warrants or options exercisable at or above the Conversion Price which would then be in effect, and (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, but in all cases excluding trade
accounts payable incurred by the Company and its Subsidiaries in the ordinary course of business; and (z) the present value of
any lease payments in excess of $200,000 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.

 

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

 

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

 

(cc)Accountants
and Lawyers. The Company’s accounting firm is set forth on Schedule 3.1(cc) of the Disclosure Schedules. To the
knowledge and belief of the Company, such accounting firm: (i) is a registered public accounting firm as required by the Exchange
Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report
for the fiscal year ending December 31, 2014. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and
the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents.

 

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(dd)Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting
solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given
by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents
to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been
based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(ee)Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Section 4.16 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked
by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of
the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any
specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation,
Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions,
may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties
in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently have a
“short” position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control
over any arm’s length counter-party in any “derivative” transaction. The Company further understands and acknowledges
that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding,
including, without limitation, during the periods that the value of the Underlying Shares deliverable with respect to Securities
are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests
in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the Transaction Documents, provided that such activities
do not breach the Investors’ representations made in Section 3.2 of this Agreement.

 

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

 

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

 

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

 

    	20

    	 

    

 

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

 

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

 

(kk)Listing
and Maintenance Requirements. The Common Stock is quoted on the OTCQB under the symbol OXYS. The Company has not, in the twenty-four
(24) 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.

 

(ll)Health
Regulatory Matters. The Company and its Subsidiaries have complied in all material respects with all statutes and regulations
related to the research, manufacture and sale of medical device products to the extent applicable to the Company’s and its
Subsidiaries’ activities. Items manufactured or under investigation by the Company and its Subsidiaries comply with all
applicable manufacturing practices regulations and other requirements established by government regulators in the jurisdictions
in which the Company or its Subsidiaries manufacture their products. To the Company’s knowledge, it is not and its Subsidiaries
are not the subject of any investigation by any competent authority with respect to the development, testing, manufacturing and
distribution of their products, nor has any investigation, prosecution, or other enforcement action been threatened by any regulatory
agency. Neither the Company nor any of its Subsidiaries has received from any regulatory agency any letter or other document asserting
that the Company or any Subsidiary has violated any statute or regulation enforced by that agency with respect to the development,
testing, manufacturing and distribution of their products. To the Company’s knowledge, research conducted by or for the
Company and its Subsidiaries has complied in all material respects with all applicable legal requirements. To the Company’s
knowledge, research involving human subjects conducted by or for the Company and its Subsidiaries has been conducted in compliance
in all respects with all applicable statutes and regulations governing the protection of human subjects and not involved any investigator
who has been disqualified as a clinical investigator by any regulatory agency or has been found by any agency with jurisdiction
to have engaged in scientific misconduct.

 

    	21

    	 

    

 

(mm)FDA. 
Except as set forth on Schedule 3.1(mm), as to each product subject to the jurisdiction of the U.S. Food and Drug Administration
(“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”)
that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries
(each such product, a “FDA Product”), such FDA Product is being manufactured, packaged, labeled, tested, distributed,
sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and
regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing
practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping
and filing of reports, except where the failure to be in compliance would not reasonably be expected to have a Material Adverse
Effect.  There is no pending, completed or, to the Company’s knowledge, threatened, action (including any lawsuit,
arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or
any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication
from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval
of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion
of any FDA Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders
the withdrawal of advertising or sales promotional materials relating to, any FDA Product, (iii) imposes a clinical hold
on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company
or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company
or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company
or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect.   The
properties, business and operations of the Company have been and are being conducted in accordance with all applicable laws, rules and
regulations of the FDA, except for any such non-compliance that would not reasonably be expected to have a Material Adverse Effect. 
The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States
of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving
or clearing for marketing any product being developed or proposed to be developed by the Company.

 

(nn)No
Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the
Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer
of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under
the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”
and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for
a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.

 

(oo)Other
Covered Persons. The Company is not aware of any person that has been or will be paid (directly or indirectly) remuneration
for solicitation of purchasers in connection with the sale of any Regulation D Securities.

 

(pp)Notice
of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.

 

(qq)Survival.
The foregoing representations and warranties shall survive the Closing Date.

 

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

 

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

 

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

 

(c)Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on
which it exercises any Warrants or converts any shares of Preferred Stock it will be either: (i) an “accredited investor”
as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional
buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer
under Section 15 of the Exchange Act. Such Purchaser has the authority and is duly and legally qualified to purchase and own the
Securities. Such Purchaser is able to bear the risk of such investment for an indefinite period and to afford a complete loss
thereof. Such Purchaser has provided the information in the Accredited Investor Questionnaire attached hereto as Exhibit
E (the “Investor Questionnaire”). The information set forth on the signature pages hereto and the Investor
Questionnaire regarding such Purchaser is true and complete in all respects. Except as disclosed in the Investor Questionnaire,
such Purchaser has had no position, office or other material relationship within the past three years with the Company or Persons
(as defined below) known to such Purchaser to be affiliates of the Company, and is not a member of the Financial Industry Regulatory
Authority or an “associated person” (as such term is defined under the FINRA Membership and Registration Rules Section
1011).

 

(d)Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

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(e)Information
on Company. Such Purchaser has been furnished with or has had access to the EDGAR Website of the Commission to the Company’s
filings made with the Commission during the period from the date that is two years preceding the date hereof through the tenth
business day preceding the Closing Date in which such Purchaser purchases Securities hereunder, including but not limited to the
Company’s amended Annual Report on Form 10-K/A filed with the Commission on April 15, 2014 (hereinafter referred to collectively
as the “Reports”).  Purchasers are not deemed to have any knowledge of any information not included in the
Reports unless such information is delivered in the manner described in the next sentence.  In addition, such Purchaser
may have received in writing from the Company such other information concerning its operations, financial condition and other
matters as such Purchaser has requested, identified thereon as OTHER WRITTEN INFORMATION (such other information is collectively,
the “Other Written Information”). Such Purchaser believes that it has received all the
information such Purchaser considers necessary or appropriate for deciding whether to purchase the Securities and considered all
factors such Purchaser deems material in deciding on the advisability of investing in the Securities.  Such Purchaser
was afforded (i) the opportunity to ask such questions as such Purchaser deemed necessary of, and to receive answers from, representatives
of the Company concerning the merits and risks of acquiring the Securities; (ii) the right of access to information about the
Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable
such Purchaser to evaluate the Securities; and (iii) the opportunity to obtain such additional information that the Company possesses
or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to
acquiring the Securities. Such Purchaser acknowledges that it is not relying on any statements or representations of the Company
or its agents for legal advice with respect to this investment or the transactions contemplated by this Agreement or the Transaction
Documents.

 

(f)Compliance
with Securities Act; Reliance on Exemptions. Such Purchaser understands and agrees that the Securities have not been registered
under the 1933 Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require
registration under the 1933 Act, and that such Securities must be held indefinitely unless a subsequent disposition is registered
under the 1933 Act or any applicable state securities laws or is exempt from such registration. Such Purchaser understands and
agrees that the Securities are being offered and sold to such Purchaser in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and regulations and that the Company is relying in part upon the
truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility
of such Purchaser to acquire the Securities.

 

(g)Communication
of Offer. Such Purchaser is not purchasing the Securities as a result of any “general solicitation” or “general
advertising,” as such terms are defined in Regulation D, which includes, but is not limited to, any advertisement, article,
notice or other communication regarding the Securities published in any newspaper, magazine or similar media or on the internet
or broadcast over television, radio or the internet or presented at any seminar or any other general solicitation or general advertisement.

 

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

 

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(i)No
Conflicts. The execution, delivery and performance of this Agreement and performance under the other Transaction Documents
and the consummation by such Purchaser of the transactions contemplated hereby and thereby or relating hereto or thereto do not
and will not (i) result in a violation of such Purchaser’s charter documents, bylaws or other organizational documents,
if applicable, (ii) conflict with nor constitute a default (or an event which with notice or lapse of time or both would become
a default) under any agreement to which such Purchaser is a party, nor (iii) result in a violation of any law, rule, or regulation,
or any order, judgment or decree of any court or governmental agency applicable to such Purchaser or its properties (except for
such conflicts, defaults and violations as would not, individually or in the aggregate, have a material adverse effect on such
Purchaser). Such Purchaser is not required to obtain any consent, authorization or order of, or make any filing or registration
with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement
or perform under the other Transaction Documents nor to purchase the Securities in accordance with the terms hereof, provided
that for purposes of the representation made in this sentence, such Purchaser is assuming and relying upon the accuracy of the
relevant representations and agreements of the Company herein.

 

(j)Tax
Liability. Such Purchaser has reviewed with its own tax advisors the federal, state, local and foreign tax consequences of
this investment and the transactions contemplated by this Agreement. Such Purchaser understands that it (and not the Company)
shall be responsible for its own tax liability that may arise as a result of this investment or the transactions contemplated
by this Agreement.

 

(k)Survival.
The foregoing representations and warranties shall survive the Closing Date.

 

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

 

ARTICLE
IV.

OTHER
AGREEMENTS OF THE PARTIES

 

4.1Transfer
Restrictions.

 

(a)The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in
connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company
at the Company’s expense, an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the
form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not
require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee
shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser under
this Agreement.

 

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

 

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

 

The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, such Purchaser may transfer pledge or secure Securities to the pledgees
or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel
of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such
pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities.

 

(c)Certificates
evidencing the Underlying 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 Underlying Shares pursuant to Rule 144, (iii) if such Underlying 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 Underlying
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). The Company
shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective Date if required by the Transfer
Agent to effect the removal of the legend hereunder. If all or any shares of Preferred Stock are converted or any portion of a
Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Underlying Shares,
or if such Underlying Shares may be sold under Rule 144 or if such legend is not otherwise required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such
Underlying Shares shall be issued free of all legends. The Company agrees that following such time as such legend is no longer
required under this Section 4.1(c), it will, no later than five Trading Days following the delivery by a Purchaser to the Company
or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with a restrictive legend (such fifth
Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing
such shares that is free from all restrictive and other legends (however, the Corporation shall use reasonable best efforts to
deliver such shares within three (3) Trading Days). 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. In lieu of delivering physical certificates
representing the unlegended shares, upon request of a Purchaser, so long as the certificates therefor do not bear a legend and
the Purchaser is not obligated to return such certificate for the placement of a legend thereon, the Company shall cause its transfer
agent to electronically transmit the unlegended shares by crediting the account of Purchaser’s prime broker with the Depository
Trust Company through its Deposit Withdrawal At Custodian system, provided that the Company’s Common Stock is DTC eligible
and the Company’s transfer agent participates in the Deposit Withdrawal at Custodian system. Such delivery must be made
on or before the Legend Removal Date.

 

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(d)In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date such Securities
are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading
Day for each Trading Day after the Legend Removal Date (increasing to $20 per Trading Day after the tenth Trading Day) until such
certificate is delivered without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual damages for
the Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents, and
such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief.

 

(e)In
the event a Purchaser shall request delivery of unlegended shares as described in this Section 4.1 and the Company is required
to deliver such unlegended shares, the Company may not refuse to deliver unlegended shares based on any claim that such Purchaser
or anyone associated or affiliated with such Purchaser has not complied with Purchaser’s obligations under the Transaction
Documents, or for any other reason, unless, an injunction or temporary restraining order from a court, on notice, restraining
and or enjoining delivery of such unlegended shares shall have been sought and obtained by the Company and the Company has posted
a surety bond for the benefit of such Purchaser in the amount of the greater of (i) 15% of the amount of the aggregate purchase
price of the Underlying Shares which is subject to the injunction or temporary restraining order, or (ii) the VWAP of the Common
Stock on the trading day before the issue date of the injunction multiplied by the number of unlegended shares to be subject to
the injunction, which bond shall remain in effect until the completion of arbitration/’litigation of the dispute and the
proceeds of which shall be payable to such Purchaser to the extent Purchaser obtains judgment in Purchaser’s favor. 

 

(f)Buy-In.
In addition to any other rights available to Purchaser, if the Company fails to deliver to a Purchaser unlegended shares as required
pursuant to this Agreement and after the Legend Removal Date the Purchaser, or a broker on the Purchaser’s behalf, purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of
the shares of Common Stock which the Purchaser was entitled to receive in unlegended form from the Company (a “Buy-In”),
then the Company shall promptly pay in cash to the Purchaser (in addition to any remedies available to or elected by the Purchaser)
the amount, if any, by which (A) the Purchaser’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (B) the aggregate purchase price of the shares of Common Stock delivered to the Company
for reissuance as unlegended shares together with interest thereon at a rate of 15% per annum accruing until such amount and any
accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty). For example,
if a Purchaser purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to $10,000
of purchase price of Shares delivered to the Company for reissuance as unlegended shares, the Company shall be required to pay
the Purchaser $1,000, plus interest, if any. The Purchaser shall provide the Company written notice indicating the amounts payable
to the Purchaser in respect of the Buy-In.

 

(g)Each
Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell the Securities
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance
with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.

 

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4.2Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant
to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive
effect that such issuance may have on the ownership of the other stockholders of the Company.

 

4.3Furnishing
of Information; Public Information.

 

(a)Until
no Purchaser owns any Securities, 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 the Exchange Act
and file such reports even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

(b)At
any time commencing on the Closing Date and ending at such time that all of the Securities may be sold without the requirement
for the Company to be in compliance with Rule 144(c)(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 such Purchaser’s other available remedies, the Company shall pay to
a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability
to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate Stated Value of Preferred Stock held by
such Purchaser on the day of a Public Information Failure and on every thirtieth (30th) day (pro-rated for periods totaling less
than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that
such public information is no longer required for the Purchasers to transfer the Underlying Shares pursuant to Rule 144. The payments
to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public Information
Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar
month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event
or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information
Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month
(prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages
for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in
equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

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

 

4.5Conversion
and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants and the form of Notice of Conversion
included in the Certificate of Designation set forth the totality of the procedures required of the Purchasers in order to exercise
the Warrants or convert the Preferred Stock. No additional legal opinion, other information or instructions shall be required
of the Purchasers to exercise their Warrants or convert their Preferred Stock. The Company shall honor exercises of the Warrants
and conversions of the Preferred Stock and shall deliver Underlying Shares in accordance with the terms, conditions and time periods
set forth in the Transaction Documents.

 

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4.6Securities
Laws Disclosure; Publicity. The Company shall, by 9:00 a.m. (New York City time) on the third (3rd) Trading Day
immediately following each Closing Date, issue a press release disclosing the material terms of the transactions contemplated
hereby, and shall file a Current Report on Form 8-K including the Transaction Documents as exhibits thereto within one Business
Day of the date hereof. From and after the issuance of such press release and Form 8-K, the Company represents to the Purchasers
that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers 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 each Purchaser shall consult with each other in issuing any other press
releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such
press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which
consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing
party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing
with the Commission or any regulatory agency or Trading Market unless the name of such Purchaser is already included in the body
of the Transaction Documents, without the prior written consent of such Purchaser, except: (a) as required by federal or state
securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure
is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of
such disclosure permitted under this clause (b).

 

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

 

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

 

4.9Use
of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the sale
of the Securities hereunder for corporate and working capital purposes and shall not use such proceeds: (a) for 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 and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement
of any outstanding litigation or (d) in violation of FCPA or OFAC regulations. The proceeds of the offering will be employed by
the Company substantially for the purposes set forth on Schedule 4.9.

 

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4.10Indemnification
of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser’s Party’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations
by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross
negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser
Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will
not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that
a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of its representations, warranties or
covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder
or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance. The indemnification required by this Section 4.10 shall be made by
periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are
incurred however, each Purchaser Party who receives such interim payment agrees to reimburse the Company for any such payment
made by the Company to such Purchaser Party if it is finally determined in such action or proceeding that such Purchaser Party
is not entitled to indemnification pursuant to this Section 4.10. The indemnity agreements contained herein shall be in addition
to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may
be subject to pursuant to law.

 

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4.11Reservation
and Listing of Securities.

 

(a)The
Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents
in such amount as may then be required to fulfill its obligations in full under the Transaction Documents, but not less than the
Required Minimum.

 

(b)If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall amend the Company’s certificate or articles of incorporation to
increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon as
possible and in any event not later than the 60th day after such date.

 

(c)The
Company hereby agrees to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently
listed, and concurrently with each Closing, the Company shall apply to list or quote all of the Underlying Shares at least equal
to the Required Minimum on such Trading Market and promptly secure the listing of all of the Underlying Shares at least equal
to the Required Minimum on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded
on any other Trading Market, it will then include in such application all of the Underlying Shares at least equal to the Required
Minimum, and will take such other action as is necessary to cause all of the Underlying Shares at least equal to the Required
Minimum to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action necessary
to continue the listing or quotation and trading of its Common Stock on a Trading Market until the later of (i) at least five
years after the Closing Date, and (ii) for so long as the Warrants are outstanding, and will comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Trading Market at least until five years after the Closing
Date and for so long as the Warrants are outstanding. In the event the aforedescribed listing is not continuously maintained for
five years after the Closing Date (a “Listing Default”), then in addition to any other rights the Purchasers
may have hereunder or under applicable law, on the first day of a Listing Default and on each monthly anniversary of each such
Listing Default date (if the applicable Listing Default shall not have been cured by such date) until the applicable Listing Default
is cured, the Company shall pay to each Purchaser an amount in cash, as partial liquidated damages and not as a penalty, equal
to 2% of the aggregate Subscription Amount and purchase price of Warrant Shares held by such Purchaser on the day of a Listing
Default and on every thirtieth day (pro-rated for periods less than thirty days) thereafter until the date such Listing Default
is cured. If the Company fails to pay any liquidated damages pursuant to this Section in a timely manner, the Company will pay
interest thereon at a rate of 1.5% per month (pro-rated for partial months) to the Purchaser.

 

4.12Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers
at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide
evidence of such actions promptly upon request of any Purchaser.

 

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4.13Subsequent
Equity Sales. Without prior written approval from Holder, from the date hereof until such time as the Preferred Stock and
Warrants are no longer outstanding, the Company will not, without the consent of the Purchasers, enter into any Equity Line of
Credit or similar agreement, nor issue nor agree to issue any common stock, floating or Variable Priced Equity Linked Instruments
nor any of the foregoing or equity with price reset rights (subject to adjustment for stock splits, distributions, dividends,
recapitalizations and the like) (collectively, the “Variable Rate Transaction”).   For purposes
hereof, “Equity Line of Credit” shall include any transaction involving a written agreement between the Company
and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter
over an agreed period of time and at an agreed price or price formula, and “Variable Priced Equity Linked Instruments”
shall include: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right
to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt
or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date
at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s
Common Stock since date of initial issuance, and (B) any amortizing convertible security which amortizes prior to its maturity
date, where the Company is required or has the option to (or any investor in such transaction has the option to require the Company
to) make such amortization payments in shares of Common Stock which are valued at a price that is based upon and/or varies with
the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security (whether
or not such payments in stock are subject to certain equity conditions).  For purposes of determining the total consideration
for a convertible instrument (including a right to purchase equity of the Company) issued, subject to an original issue or similar
discount or which principal amount is directly or indirectly increased after issuance, the consideration will be deemed to be
the actual cash amount received by the Company in consideration of the original issuance of such convertible instrument. Until
twenty-four (24) months after the Closing Date, the Company will not issue any Common Stock or Common Stock Equivalents to officers,
directors, employees, consultants and service providers of the Company except in the amounts and on the terms set forth on Schedule
4.13. Except as may be issued to the Purchasers pursuant to this Agreement, the Company will not issue or reissue any Preferred
Stock. For so long as Preferred Stock or Warrants are outstanding, the Company will not amend the terms of any securities or Common
Stock Equivalents or of any agreement outstanding or in effect as of the date of this Agreement pursuant to which same were or
may be acquired nor issue any Common Stock or Common Stock Equivalents, if such issuance or the result of such amendment would
be at an effective price per share of Common Stock less than the higher of the Conversion Price or Warrant Exercise Price in effect
at the time of such lower price issuance or amendment or would be issued or made on terms more favorable to such other holder
or recipient than the Purchaser, with respect to the terms of the offering pursuant to the Transaction Documents.

 

4.14Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of any of this Agreement unless the same consideration
is also offered on a ratable basis to all of the parties to this Agreement. For clarification purposes, this provision constitutes
a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the
Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group
with respect to the purchase, disposition or voting of Securities or otherwise. 

 

4.15Capital
Changes. Until the one year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock split
or reclassification of the Common Stock without 10 days prior written notice to the Purchasers, unless such reverse split is made
in conjunction with the listing of the Common Stock on a national securities exchange.

 

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4.16Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither
it, nor any Affiliate 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
at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
or Form 8-K as described in Section 4.6.  Each Purchaser, severally and not jointly with the other Purchasers, covenants
that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the
initial press release or Form 8-K as described in Section 4.6, such Purchaser will maintain the confidentiality of the existence
and terms of this transaction and the information included in the Transaction Documents and the Disclosure Schedules. Notwithstanding
the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release or Form 8-K as described in Section 4.6, (ii) no Purchaser shall be restricted or prohibited
from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after
the time that the transactions contemplated by this Agreement are first publicly announced in a press release or pursuant to the
Form 8-K as described in Section 4.6 and (iii) no Purchaser shall have any duty of confidentiality to the Company or its Subsidiaries
after the filing of the Form 8-K or disclosed in the initial press release as described in Section 4.6.  Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only
apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the
Securities covered by this Agreement.

 

4.17Participation
in Future Financing.

 

(a)Subject
to the rights granted to the Purchasers pursuant to the Prior Funding SPA, from the date hereof until the date that is the 24
month anniversary of the final Additional Closing Date, upon any proposed issuance by the Company or any of its Subsidiaries of
Common Stock, Common Stock Equivalents for cash consideration, Indebtedness or a combination thereof, other than (i) a rights
offering to all holders of Common Stock (which may include extending such rights offering to holders of Preferred Stock) or (ii)
an Exempt Issuance, (a “Subsequent Financing”), each Purchaser shall have the right to participate in up to
an amount of the Subsequent Financing equal to 100% of the Subsequent Financing (the “Participation Maximum”)
on the same terms, conditions and price provided for in the Subsequent Financing, unless the Subsequent Financing is an underwritten
public offering, in which case the Company shall offer each Purchaser the right to participate in such public offering when it
is lawful for the Company to do so, but no Purchaser shall be entitled to purchase any particular amount of such public offering.

 

(b)At
least seven (7) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser
if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The
requesting Purchaser shall be deemed to have acknowledged that the Subsequent Financing Notice may contain material non-public
information. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing,
the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing
is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment.

 

(c)Any
Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30
p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice that
the Purchaser is willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation, and representing
and warranting that such Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent
Financing Notice. If the Company receives no such notice from a Purchaser as of such fifth (5th) Trading Day, such
Purchaser shall be deemed to have notified the Company that it does not elect to participate.

 

    	33

    	 

    

 

(d)If
by 5:30 p.m. (New York City time) on the fifth (5th ) Trading Day after all of the Purchasers have received the Pre-Notice,
notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to
participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may affect the remaining
portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice.

 

(e)If
by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice,
the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount
of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of
the Participation Maximum.  “Pro Rata Portion” means the ratio of (x) the Subscription Amount of shares
of Preferred Stock and Warrants purchased hereunder by a Purchaser participating under this Section 4.17 and (y) the sum of the
aggregate Subscription Amounts of Securities purchased hereunder by all Purchasers participating under this Section 4.17.

 

(f)The
Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of
participation set forth above in this Section 4.17, if the Subsequent Financing subject to the initial Subsequent Financing Notice
is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after
the date of the initial Subsequent Financing Notice.

 

(g)The
Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required to agree
to any restrictions on trading as to any of the Securities purchased hereunder (for avoidance of doubt, the securities purchased
in the Subsequent Financing shall not be considered securities purchased hereunder) or be required to consent to any amendment
to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior
written consent of such Purchaser.

 

(h)Notwithstanding
anything to the contrary in this Section 4.17 and unless otherwise agreed to by such Purchaser, the Company shall either confirm
in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser
will not be in possession of any material, non-public information, by the tenth (10th) Business Day following delivery of the
Subsequent Financing Notice. If by such tenth (10th) Business Day, no public disclosure regarding a transaction with respect to
the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received by such
Purchaser, such transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession
of any material, non-public information with respect to the Company or any of its Subsidiaries.

 

    	34

    	 

    

 

4.18Reimbursement.
If any Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is a stockholder of the Company
(except as a result of sales, pledges, margin sales and similar transactions by such Purchaser to or with any current stockholder),
solely as a result of such Purchaser’s acquisition of the Securities under this Agreement, the Company will reimburse such
Purchaser for its reasonable legal and other expenses (including the cost of any investigation preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred. The reimbursement obligations of the Company under
this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and
conditions to any Affiliates of the Purchasers who are actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may be, of the Purchasers and any such Affiliate, and
shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company,
the Purchasers and any such Affiliate and any such Person. The Company also agrees that neither the Purchasers nor any such Affiliates,
partners, directors, agents, employees or controlling persons shall have any liability to the Company or any Person asserting
claims on behalf of or in right of the Company solely as a result of acquiring the Securities under this Agreement.

 

4.19DTC
Program. At all times that Warrants are outstanding, the Company will employ as the transfer agent for the Common Stock and
Warrant Shares a participant in the Depository Trust Company Automated Securities Transfer Program and cause the Common Stock
to be transferable pursuant to such program.

 

4.20Piggy-Back
Registrations. If at any time after the Closing Date there is not an effective registration statement covering all of the
Underlying Shares and the Company determines to prepare and file with the Commission a registration statement relating to an offering
for its own account or the account of others under the Securities Act of any of its equity securities, but excluding Forms S-4
or S-8 and similar forms which do not permit such registration, then the Company shall send to each holder of any of the Securities
written notice of such determination and, if within ten (10) business days after receipt of such notice, any such holder shall
so request in writing, the Company shall include in such registration statement all or any part of the Underlying Shares such
holder requests to be registered and which inclusion of such Underlying Shares will be subject to customary underwriter cutbacks
applicable to all holders of registration rights and minimum cutbacks in accordance with guidance provided by the Commission (including,
but not limited to, Rule 415). The obligations of the Company under this Section may be waived by any holder of any of the Securities
entitled to registration rights under this Section 4.20. The holders whose Underlying Shares are included or required to be included
in such registration statement are granted the same rights, benefits, liquidated or other damages and indemnification granted
to other holders of securities included in such registration statement. In no event shall the liability of any holder of Securities
or permitted successor in connection with any Underlying Shares included in any such registration statement be greater in amount
than the dollar amount of the net proceeds actually received by such holder upon the sale of the Underlying Shares sold pursuant
to such registration or such lesser amount in proportion to all other holders of securities included in such registration statement.
All expenses incurred by the Company in complying with Section 4.20, including, without limitation, all registration and filing
fees, printing expenses (if required), fees and disbursements of counsel and independent public accountants for the Company, fees
and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or “blue sky”
laws, fees of the FINRA, transfer taxes, and fees of transfer agents and registrars, are called “Registration Expenses.”
All underwriting discounts and selling commissions applicable to the sale of Registrable Securities and legal expenses of such
holders are called "Selling Expenses." The Company will pay all Registration Expenses in connection with the
registration statement under Section 4.20. Selling Expenses in connection with each registration statement under Section 4.20
shall be borne by the holder and will be apportioned among such holders in proportion to the number of Shares included therein
for a holder relative to all the securities included therein for all selling holders, or as all holders may agree. It shall be
a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to
the Underlying Shares of a particular holder that such holder shall furnish to the Company in writing such information and representation
letters, including a completed form of a securityholder questionnaire, with respect to itself and the proposed distribution by
it as the Company may reasonably request to assure compliance with federal and applicable state securities laws.

 

    	35

    	 

    

 

4.21Maintenance
of Property. The Company shall keep all of its property, which is necessary or useful to the conduct of its business, in good
working order and condition, ordinary wear and tear excepted.

 

4.22Indebtedness.
For so long as any Preferred Stock is outstanding, the Company will not incur any Indebtedness.

 

4.23Preservation
of Corporate Existence. The Company shall for itself and each Subsidiary, preserve and maintain its corporate existence, rights,
privileges and franchises in the jurisdiction of its incorporation, and qualify and remain qualified, as a foreign corporation
in each jurisdiction in which such qualification is necessary in view of its business or operations and where the failure to qualify
or remain qualified might reasonably have a Material Adverse Effect upon the financial condition, business or operations of the
Company taken as a whole.

 

4.24Waiver.
In order to facilitate the offering described in this Agreement and the other Transaction Documents, Purchasers waive the restrictions
and prohibitions, to the extent they may be applicable, contained in Sections 4.4 and 4.13 of the Prior Funding SPA and further
exclude the offering described in this Agreement from the definition of ‘Subsequent Financing’ as such term is defined
in the Prior Funding SPA.

 

4.25Consent.
Provided a Closing occurs, with respect only to the offering made pursuant to the Transaction Documents, the Purchasers by executing
this Agreement waive the restrictions contained in Section 4.13 of the Prior Funding SPA and the Company’s strict compliance
with the terms of Section 4.17 of the Prior Funding SPA. The Purchasers consent to the amendment of the Certificate of Designation
of Preferences, Rights and Limitations of Series B Convertible Preferred Stock to the form annexed hereto as Exhibit F.

 

ARTICLE
V.

MISCELLANEOUS

 

5.1Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing
has not been consummated on or before December 31, 2014; provided, however, that such termination will not affect
the right of any party to sue for any breach by any other party (or parties).

 

5.2Fees
and Expenses. At the Closing, the Company has agreed to pay G&M for the Purchasers’ legal fees in connection with
the Closing in the amount of $15,000, of which $5,000 has been paid, which shall be paid from Escrow upon Closing. Except as expressly
set forth in the Transaction Documents, each party shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required
for same-day processing of any instruction letter delivered by the Company and any conversion or exercise notice delivered by
a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.

 

    	36

    	 

    

 

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

 

5.4Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be: (i) if to the Company, to: Oxysure Systems, Inc., 10880 John W. Elliott Drive,
Suite 600, Frisco, TX 75033, Attn: Julian Ross, Chief Executive Officer, facsimile: 972-294-6501, with a copy by fax only
to (which shall not constitute notice): Horzepa Spiegel & Associates PC,802 Lovett Boulevard, Houston, Texas 77006, Attn:
Joseph Horzepa, Esq., facsimile: (713) 861-2301, and (ii) if to the Purchasers, to: the addresses and fax numbers indicated on
the signature pages hereto, with an additional copy by fax only to (which shall not constitute notice): Grushko & Mittman,
P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

 

5.5Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Purchasers holding at least a majority in interest of the component of the
affected Securities then outstanding 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
each Purchaser. Following the Closing, any Purchaser may assign any or all of its rights under this Agreement to any Person to
whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect
to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”

 

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

 

    	37

    	 

    

 

5.9Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either
party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the
obligations of the Company under Section 4.10, the prevailing party in such action, suit or proceeding shall be reimbursed by
the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

 

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

 

5.11Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.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.

 

5.13Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser
may, at any time prior to the Company’s performance of such obligations, rescind or withdraw, in its sole discretion from
time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice
to its future actions and rights; provided, however, that in the case of a rescission of a conversion of the Preferred
Stock or exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any
such rescinded conversion or exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid
to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s
Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).

 

    	38

    	 

    

 

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

 

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

 

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

 

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

 

    	39

    	 

    

 

5.18Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience only, each
Purchaser and its respective counsel have chosen to communicate with the Company through G&M. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required
or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement
and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers
collectively and not between and among the Purchasers.

 

5.19Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages
or other amounts are due and payable shall have been canceled.

 

5.20Saturdays,
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.

 

5.21Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.

 

5.22WAIVER
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)

 

    	40

    	 

    

 

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.

 

	Oxysure Systems, Inc. 	
        Address for Notice:

         

        10880 John W. Elliott Drive

        Suite 600 Frisco, TX 75033

        Fax: 972-294-6501

	By: 	 	 
	 	Name: Julian Ross	 
	 	Title: Chief Executive Officer	 
	 	 	 
	 	
        With a copy to (which shall not constitute notice):

         

        Horzepa Spiegel & Associates PC

        802 Lovett Boulevard

        Houston, Texas 77006

        Attn: Joseph Horzepa, Esq.

        Fax: (713) 861-2301

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

    	41

    	 

    

 

[PURCHASER
SIGNATURE PAGE TO Oxysure Systems, Inc.

SECURITIES
PURCHASE AGREEMENT]

 

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

 

	Name
of Purchaser:	 

 

	Signature of Authorized Signatory of Purchaser: 	 

 

	Name of Authorized Signatory: 	 

 

	Title of Authorized Signatory: 	 

 

	Email Address of Authorized Signatory: 	 

 

	Facsimile Number of Authorized Signatory: 	 

 

	Address for Notice to Purchaser: 	 

 

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

 

 

 

 

 

 

 

 

 

 

Subscription
Amount: US$________________

 

Preferred
Stock: ___________________ Shares

 

Warrants
___________________

 

	EIN Number, if applicable, will be provided under separate cover: 	 

 

 

[SIGNATURE
PAGES CONTINUE]

 

    	42

    	 

    

 

EXHIBIT
E

 

ACCREDITED
INVESTOR QUESTIONNAIRE

IN
CONNECTION WITH INVESTMENT IN PREFERRED STOCK AND WARRANTS

OF
OXYSURE SYSTEMS, INC., A DELAWARE CORPORATION

PURSUANT
TO SECURITIES PURCHASE AGREEMENT DATED DECEMBER___, 2014

 

	TO :	Oxysure Systems, Inc.

10880
John W. Elliott Drive, Suite 600

Frisco,
TX 75033

Fax:
972-294-6501

 

INSTRUCTIONS

 

PLEASE
ANSWER ALL QUESTIONS. If the appropriate answer is “None” or “Not Applicable”, so state. Please print
or type your answers to all questions. Attach additional sheets if necessary to complete your answers to any item.

 

Your
answers will be kept strictly confidential at all times. However, Oxysure Systems, Inc. (the “Company”) may present
this Questionnaire to such parties as it deems appropriate in order to assure itself that the offer and sale of securities of
the Company will not result in a violation of the registration provisions of the Securities Act of 1933, as amended, or a violation
of the securities laws of any state.

 

	1.	Please provide the following information:

 

	Name:	

 

	Name of
additional purchaser:	 
	(Please complete information in Question 5)

 

Date of
birth, or if other than an individual, year of organization or incorporation:

 

 

 

 

 

 

 

	2.	Residence address, or if other than an individual, principal office address:

 

 

 

 

 

 

 

 

 

 

	Telephone
number:	 
	 	 
	Social Security
Number:	 
	 	 
	Taxpayer Identification Number: 	 

 

    	43

    	 

    

 

	3.	Business address:	 

 

 

 

 

 

 

 

	Business telephone number:	 

 

	4.	Send mail to:                      Residence
______                                      Business
_______

 

5.
With respect to tenants in common, joint tenants and tenants by the entirety, complete only if information differs from that above:

 

	Residence address:	 

 

 

 

 

 

 

 

	Telephone number:	 

 

	Social Security Number:	    
	 	 
	Taxpayer Identification Number:	 
	 	 
	Business
address:	 

 

 

 

 

 

 

 

	Business telephone number:	 

 

	 	Send mail to:                      Residence
______                                      Business
_______

 

6.
Please describe your present or most recent business or occupation and indicate such information as the nature of your employment,
how long you have been employed there, the principal business of your employer, the principal activities under your management
or supervision and the scope (e.g. dollar volume, industry rank, etc.) of such activities:

 

 

 

 

 

 

 

 

 

 

    	44

    	 

    

 

7.
Please state whether you (i) are associated with or affiliated with a member of the Financial Industry Regulatory Association,
Inc. (“FINRA”), (ii) are an owner of stock or other securities of FINRA member (other than stock or other securities
purchased on the open market), or (iii) have made a subordinated loan to any FINRA member:

 

	 	 	 	 	 
	 	Yes	 	No	 

 

If
you answered yes to any of (i) – (iii) above, please indicate the applicable answer and briefly describe the facts below:

 

 

 

 

 

 

 

 

 

 

8A.
Applicable to Individuals ONLY. Please answer the following questions concerning your financial condition as an “accredited
investor” (within the meaning of Rule 501 of Regulation D). If the purchaser is more than one individual, each individual
must initial an answer where the question indicates a “yes” or “no” response and must answer any other
question fully, indicating to which individual such answer applies. If the purchaser is purchasing jointly with his or her spouse,
one answer may be indicated for the couple as a whole:

 

8.1
Does your net worth* (or joint net worth with your spouse) exceed $1,000,000?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

8.2
Did you have an individual income** in excess of $200,000 or joint income together with your spouse in excess of $300,000 in each
of the two most recent years (2012 and 2013) and do you reasonably expect to reach the same income level in the current year (2014)?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

8.3
Are you an executive officer of the Company?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

*
For purposes hereof, net worth shall be deemed to include ALL of your assets, liquid or illiquid MINUS any liabilities.

 

**
For purposes hereof, the term “income” is not limited to “adjusted gross income” as that term is defined
for federal income tax purposes, but rather includes certain items of income which are deducted in computing “adjusted gross
income”. For investors who are salaried employees, the gross salary of such investor, minus any significant expenses personally
incurred by such investor in connection with earning the salary, plus any income from any other source including unearned income,
is a fair measure of “income” for purposes hereof. For investors who are self-employed, “income” is generally
construed to mean total revenues received during the calendar year minus significant expenses incurred in connection with earning
such revenues.

 

    	45

    	 

    

 

8.B
Applicable to Corporations, Partnerships, Trusts, Limited Liability Companies and other Entities ONLY:

 

The
purchaser is an accredited investor because the purchaser falls within at least one of the following categories (Check all appropriate
lines):

 

		___	(i)
                                         a bank as defined in Section 3(a)(2) of the Act or a savings and loan association or
                                         other institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual
                                         or fiduciary capacity;

 

		___	(ii)
                                         a broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934,
                                         as amended;

 

		___	(iii)
                                         an insurance company as defined in Section 2(13) of the Act;

 

		___	(iv)
                                         an investment company registered under the Investment Company Act of 1940, as amended
                                         (the “Investment Act”) or a business development company as defined in Section
                                         2(a)(48) of the Investment Act;

 

		___	(v)
                                         a Small Business Investment Company licensed by the U.S. Small Business Administration
                                         under Section 301(c) or (d) of the Small Business Investment Act of 1958, as amended;

 

		___	(vi)
                                         a plan established and maintained by a state, its political subdivisions, or any agency
                                         or instrumentality of a state or its political subdivisions, for the benefit of its employees,
                                         where such plan has total assets in excess of $5,000,000;

 

		___	(vii)
                                         an employee benefit plan within the meaning of Title 1 of the Employee Retirement Income
                                         Security Act of 1974, as amended (the “Employee Act”), where the investment
                                         decision is made by a plan fiduciary, as defined in Section 3(21) of the Employee Act,
                                         which is either a bank, savings and loan association, insurance company, or registered
                                         investment adviser, or an employee benefit plan that has total assets in excess of $5,000,000,
                                         or a self-directed plan the investment decisions of which are made solely by persons
                                         that are accredited investors;

 

		___	(viii)
                                         a private business development company, as defined in Section 202(a)(22) of the Investment
                                         Advisers Act of 1940, as amended;

 

    	46

    	 

    

 

		___	(ix)
                                         an organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation,
                                         a Massachusetts or similar business trust, or a partnership, not formed for the specific
                                         purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

 

		___	(x)
                                         a trust, with total assets in excess of $5,000,000, not formed for the specific purpose
                                         of acquiring the securities offered, whose purchase is directed by a “sophisticated”
                                         person, as described in Rule 506(b)(2)(ii) promulgated under the Act, who has such knowledge
                                         and experience in financial and business matters that he or she is capable of evaluating
                                         the merits and risks of the prospective investment;

 

		___	(xi)
                                         an entity in which all of the equity investors are persons or entities described above
                                         (“accredited investors”). ALL EQUITY OWNERS MUST COMPLETE “EXHIBIT
                                         A” ATTACHED HERETO.

 

9.ADo
you have sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and
risks associated with investing in the Company?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

ANSWER QUESTION
9B ONLY IF THE ANSWER TO QUESTION 9A WAS “NO.”

 

9.BIf
the answer to Question 9A was “NO,” do you have a financial or investment adviser (a) that is acting in the capacity
as a purchaser representative and (b) who has sufficient knowledge and experience in financial and business matters so as to be
capable of evaluating the merits and risks associated with investing in the Company?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

If
you have a financial or investment adviser(s), please identify each such person and indicate his or her business address and telephone
number in the space below. (Each such person must complete, and you must review and acknowledge, a separate Purchaser Representative
Questionnaire which will be supplied at your request).

 

 

 

 

 

 

 

    	47

    	 

    

 

10.You
have the right, will be afforded an opportunity, and are encouraged to investigate the Company and review relevant factors and
documents pertaining to the officers of the Company, and the Company and its business and to ask questions of a qualified representative
of the Company regarding this investment and the properties, operations, and methods of doing business of the Company.

 

Have
you or has your purchaser representative, if any, conducted any such investigation, sought such documents or asked questions of
a qualified representative of the Company regarding this investment and the properties, operations, and methods of doing business
of the Company?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

	If so, briefly describe:	 

 

 

 

 

If
so, have you completed your investigation and/or received satisfactory answers to your questions?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

11.Do
you understand the nature of an investment in the Company and the risks associated with such an investment?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

12.Do
you understand that there is no guarantee of any financial return on this investment and that you will be exposed to the risk
of losing your entire investment?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

13.Do
you understand that this investment is not liquid?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

14.Do
you have adequate means of providing for your current needs and personal contingencies in view of the fact that this is not a
liquid investment?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

15.Are
you aware of the Company’s business affairs and financial condition, and have you acquired all such information about the
Company as you deem necessary and appropriate to enable you to reach an informed and knowledgeable decision to acquire the Interests?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

    	48

    	 

    

 

16.Do
you have a “pre-existing relationship” with the Company or any of the officers of the Company?

 

	 	 	 	 	 
	 	Yes	 	No	 

 

(For
purposes hereof, “pre-existing relationship” means any relationship consisting of personal or business contacts of
a nature and duration such as would enable a reasonably prudent investor to be aware of the character, business acumen, and general
business and financial circumstances of the person with whom such relationship exists.)

 

If
so, please name the individual or other person with whom you have a pre-existing relationship and describe the relationship:

 

 

 

 

 

 

 

17.Exceptions
to the representations and warranties made in Section 3.2 of the Securities Purchase Agreement (if no exceptions, write
“none” – if left blank, the response will be deemed to be “none”): _______________________________

 

 

 

 

Dated: _______________,
2014

 

If purchaser
is one or more individuals (all individuals must sign):

 

 

 

(Type or print name of prospective purchaser)

 

 

 

Signature of prospective purchaser

 

 

 

Social Security Number

 

 

 

(Type or print name of additional purchaser)

 

 

 

Signature of spouse, joint tenant, tenant in common or other signature, if required

 

 

 

Social Security Number

 

    	49

    	 

    

 

Annex
A

 

Definition
of Accredited Investor

 

The
securities will only be sold to investors who represent in writing in the Securities Purchase Agreement that they are accredited
investors, as defined in Regulation D, Rule 501 under the Act which definition is set forth below:

 

1.A
natural person whose net worth, or joint net worth with spouse, at the time of purchase exceeds $1 million (excluding home); or

 

2.
A natural person whose individual gross income exceeded $200,000 or whose joint income with that person’s spouse
exceeded $300,000 in each of the last two years, and who reasonably expects to exceed such income level in the current year;
or

 

3.A
trust with total assets in excess of $5 million, not formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person described in Regulation D; or

 

4.A
director or executive officer of the Company; or

 

5.The
investor is an entity, all of the owners of which are accredited investors; or

 

6.(a)
bank as defined in Section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Act, (b) any broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, (c)
an insurance Company as defined in Section 2(13) of the Act, (d) an investment Company registered under the Investment Company
Act of 1940 or a business development Company as defined in Section 2(a)(48) of such Act, (e) a Small Business Investment Company
licensed by the United States Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of
1958, (f) an employee benefit plan established and maintained by a state, its political subdivisions, or any agency or instrumentality
of a state or its political subdivisions, if such plan has total assets in excess of $5 million, (g) an employee benefit plan
within the meaning of Title I of the Employee Retirement Income Securities Act of 1974, and the employee benefit plan has assets
in excess of $5 million, or the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, that
is either a bank, savings and loan institution, insurance Company, or registered investment advisor, or, if a self-directed plan,
with an investment decisions made solely by persons that are accredited investors, (h) a private business development company
as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, or (i) an organization described in Section 501(c)(3)
of the Internal Revenue code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific
purpose of acquiring the securities offered, with assets in excess of $5 million.

 

    	50

    	 

    

 

EXHIBIT
“A” TO ACCREDITED INVESTOR QUESTIONNAIRE

 

ACCREDITED
CORPORATIONS, PARTNERSHIPS, LIMITED LIABILITY COMPANIES, TRUSTS OR OTHER ENTITIES INITIALING QUESTION 8B(xi) MUST PROVIDE THE
FOLLOWING INFORMATION.

 

I
hereby certify that set forth below is a complete list of all equity owners in __________________ [NAME OF ENTITY], a                                               
[TYPE OF ENTITY] formed pursuant to the laws of the State of                                    
. I also certify that EACH SUCH OWNER HAS INITIALED THE SPACE OPPOSITE HIS OR HER NAME and that each such owner understands
that by initialing that space he or she is representing that he or she is an accredited individual investor satisfying the test
for accredited individual investors indicated under “Type of Accredited Investor.”

 

	 	 
	 	signature
of authorized corporate officer, general partner or trustee

 

	 	Name of Equity Owner	Type of Accredited Investor1

 

	1.	 
	 	 
	2.	 
	 	 
	3.	 
	 	 
	4.	 
	 	 
	5.	 
	 	 
	6.	 
	 	 
	7.	 
	 	 
	8.	 
	 	 
	9.	 
	 	 
	10. 	 

 

 

 

1Indicate
which Subparagraph of 8.1 - 8.3 the equity owner satisfies.

 

 

51

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