Document:

Exhibit 4.2

 

[FORM
OF SERIES G WARRANT]

 

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

 

real
goods solar, INC.

 

SERIES G Warrant
To Purchase Common Stock

 

Warrant No.: G-[  ]

Number of Shares of Common Stock: [         ]

Date of Issuance: April 1, 2016
("Issuance Date")

 

Real Goods Solar, Inc.,
a Colorado corporation (the "Company"), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [PURCHASER], the registered holder
hereof or its permitted assigns (the "Holder"), is entitled, subject to the terms set forth below, to purchase
from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after the date that is six
(6) months after the Issuance Date (the "Initial Exercisability Date"), but not after 11:59 p.m., New York time,
on the Expiration Date, (as defined below), up to such number of fully paid and nonassessable shares of Common Stock equal to [        ]1
(the "Warrant Share Number"), subject to adjustment as provided herein (the "Warrant Shares").
Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any warrants to Purchase
Common Stock issued in exchange, transfer or replacement hereof, this "Warrant"), shall have the meanings set
forth in Section 17. This Warrant is one of the Series G Warrants to purchase Common Stock (the "SPA Warrants")
issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of April 1, 2016  (the "Subscription
Date"), by and among the Company and the investors (the "Buyers") referred to therein (the "Securities
Purchase Agreement"). Capitalized terms used herein and not otherwise defined shall have the definitions ascribed to such
terms in the Securities Purchase Agreement.

 

 

1
Insert 40% of the number of shares of Common Stock issuable to the Holder if the Holder elected to convert the SPA Securities at
the Fixed Conversion Price (as defined in the SPA Securities) purchased by the Holder pursuant to the Securities Purchase Agreement
(without regard to any limitations on conversion contained therein) on the Closing Date.

  

     

     

    

 

1.            EXERCISE
OF WARRANT.

 

(a)  Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date, in whole or
in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the "Exercise Notice"),
of the Holder's election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal to the applicable Exercise
Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the "Aggregate Exercise Price")
in cash by wire transfer of immediately available funds or (B) if the provisions of Section 1(d) are applicable, by notifying the
Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not
be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice
with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance
of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise
Notice for all of the then remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant
after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first (1st) Trading Day following
the date on which the Company has received the Exercise Notice, the Company shall transmit by facsimile an acknowledgment of confirmation
of receipt of the Exercise Notice to the Holder and the Company's transfer agent (the "Transfer Agent"). On or
before the third (3rd) Trading Day following the date on which the Company has received the Exercise Notice, so long as the Holder
delivers the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the second (2nd) Trading Day following
the date on which the Company has received the Exercise Notice (the "Share Delivery Date") (provided that if the
Aggregate Exercise Price has not been delivered by such date, the Share Delivery Date shall be one (1) Trading Day after the Aggregate
Exercise Price (or notice of a Cashless Exercise) is delivered), the Company shall (X) provided that the Warrant Shares can be
immediately sold or transferred by the Holder either (1) pursuant to an effective registration statement, (2)
pursuant to Rule 144 if the Holder indicates on the applicable Exercise Notice that the shares of Common Stock issuable in connection
with such Exercise Notice are being sold contemporaneously by the Holder, or (3) pursuant to Rule 144 without having to comply
with the information requirements under Rule 144(c)(1), credit such aggregate number of Warrant Shares to which the Holder
is entitled pursuant to such exercise to the Holder's or its designee's balance account with The Depository Trust Company ("DTC")
through its Deposit / Withdrawal At Custodian system, or (Y) otherwise, issue and dispatch by overnight courier to the address
as specified in the Exercise Notice, a certificate, registered in the Company's share register in the name of the Holder or its
designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall be responsible
for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC,
if any. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares
are credited to the Holder's DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case
may be. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise,
then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any exercise and at its own
expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares
issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant
is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant
Shares to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes (other than the Holder's
income taxes) which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The
Company's obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are
absolute and unconditional, irrespective of any action or inaction by the 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. NOTWITHSTANDING ANY PROVISION OF THIS WARRANT TO THE CONTRARY, NO MORE
THAN THE MAXIMUM ELIGIBILITY NUMBER OF WARRANT SHARES SHALL BE EXERCISABLE HEREUNDER.

 

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(b)  Exercise
Price. For purposes of this Warrant, "Exercise Price" means $0.8280, subject to adjustment as provided
herein.

 

(c)  Company's
Failure to Timely Deliver Securities. If (I) the Company shall fail for any reason or for no reason on or prior to the applicable
Share Delivery Date, to credit the Holder's balance account with DTC or issue and deliver a certificate to the Holder and register
such shares of Common Stock on the Company's share register, as required pursuant to the terms of Section 1(a), for such number
of shares of Common Stock to which the Holder is entitled upon the Holder's exercise of this Warrant, (II) the Registration Statement
(as defined in the Registration Rights Agreement) covering the resale of all of the Warrant Shares that are the subject of the
Exercise Notice (the "Unavailable Warrant Shares"), to the extent all such Unavailable Warrant Shares are required
to be included in such Registration Statement pursuant to the terms of the Registration Rights Agreement, is not available for
the resale of such Unavailable Warrant Shares and the Company fails to promptly, but in no event later than as required pursuant
to the Registration Rights Agreement, (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive
legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's
or its designee's balance account with DTC through its Deposit / Withdrawal At Custodian system (the event described in the immediately
foregoing clause (II) is hereinafter referred as a "Notice Failure" and together with the event described in clause
(I) above, an "Exercise Failure"), or (III) if the Company shall fail for any reason or for no reason to issue
and deliver a certificate to the Holder and register such shares of Common Stock on the Company's share register or credit the
Holder's balance account with DTC, as required pursuant to the terms of Section 1(a)), for the number of shares of Common Stock
to which the Holder is entitled pursuant to the Company's obligation pursuant to clause (ii) below, and if on or after such Trading
Day the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion of the number of shares of Common
Stock equal to or any portion of the number of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving
from the Company (a "Buy-In"), then, in addition to all other remedies available to the Holder, the Company shall,
within three (3) Trading Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an
amount equal to the Holder's total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for
the shares of Common Stock so purchased (the "Buy-In Price"), at which point the Company's obligation to deliver
such certificate (and to issue such shares of Common Stock) or credit such Holder's balance account with DTC for such shares of
Common Stock shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing
such shares of Common Stock or credit such Holder's balance account with DTC, as applicable, and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) any trading
price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the date of
the applicable Exercise Notice and ending on the date of such issuance and payment under this Section 3(c). Nothing shall limit
the Holder's right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates
representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise of this Warrant
as required pursuant to the terms hereof.

 

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(d)  Cashless
Exercise.  Notwithstanding anything contained herein to the contrary, if the Registration Statement (as defined in the
Registration Rights Agreement) covering the resale of the Unavailable Warrant Shares is not available for the resale of such Unavailable
Warrant Shares the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead
to receive upon such exercise the "Net Number" of shares of Common Stock determined according to the following formula
(a "Cashless Exercise"):

 

Net Number
= (A x B) - (A x C)

D

 

For purposes
of the foregoing formula:

 

A=  the
total number of shares with respect to which this Warrant is then being exercised.

 

B=  the
arithmetic average of the Closing Sale Prices of the Common Stock for the five (5) consecutive Trading Days ending on the date
immediately preceding the date of the Exercise Notice.

 

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C=  the
Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

D=  the
Closing Sale Price of the Common Stock on the date of the Exercise Notice.

 

For
purposes of Rule 144(d) promulgated under the 1933 Act, as in effect on the date hereof, the Warrant Shares issued in a Cashless
Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement.

 

(e)  Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 12.

 

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(f)  Beneficial
Ownership Limitation on Exercises. Notwithstanding anything to the contrary contained herein, the Company shall not effect
the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant
to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent
that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially
own in excess of 9.99% (the "Maximum Percentage") of the number of shares of Common Stock outstanding immediately
after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially
owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and
all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to
which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable
upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including,
without limitation, any convertible notes or convertible preferred stock or warrants) beneficially owned by the Holder or any other
Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f).
For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"). For purposes of this Warrant, in determining the number of
outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage,
the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company's most recent Annual Report
on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange
Commission (the "SEC"), as the case may be, (y) a more recent public announcement by the Company or (3) any other
written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding (the "Reported
Outstanding Share Number"). If the Company receives an Exercise Notice from the Holder at a time when the actual number
of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder
in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise
cause the Holder's beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder
must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares
by which such purchase is reduced, the "Reduction Shares") and (ii) as soon as reasonably practicable, the Company
shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the
written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic
mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant,
by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In
the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the
other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of
outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which
the Holder's and the other Attribution Parties' aggregate beneficial ownership exceeds the Maximum Percentage (the "Excess
Shares") shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote
or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null
and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of
a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first
(61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of
9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the
sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply
only to the Holder and the other Attribution Parties and not to any other holder of SPA Warrants that is not an Attribution Party
of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of
the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section
13(d) or Rule 16a-1(a)(1) of the 1934 Act. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 1(f) to the extent necessary to correct this paragraph or any portion
of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section
1(f) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained
in this paragraph may not be waived and shall apply to a successor holder of this Warrant.

 

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(g)  Insufficient
Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least
a number of shares of Common Stock equal to 200% of the maximum number of shares of Common Stock as shall from time to time be
necessary to effect the exercise of all of this Warrant then outstanding (the "Required Reserve Amount" and the
failure to have such sufficient number of authorized and unreserved shares of Common Stock, an "Authorized Share Failure"),
then the Company shall promptly take all action reasonably necessary to increase the Company's authorized shares of Common Stock
to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant and the other SPA Warrants
then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence
of an Authorized Share Failure, but in no event later than seventy-five (75) days after the occurrence of such Authorized Share
Failure, the Company shall either ( x) obtain the written consent of its shareholders for the approval of an increase in the number
of authorized shares of Common Stock and provide each shareholder with an information statement with respect thereto or (y) hold
a meeting of its shareholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each shareholder with a proxy statement and shall use its reasonable best efforts
to solicit its shareholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors
to recommend to the shareholders that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized
Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding Common
Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining
such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. The initial number of shares of Common
Stock reserved for exercise of this Warrant and the other SPA Warrants and each increase in the number of shares so reserved shall
be allocated pro rata among the Holder and the holders of the other SPA Warrants, based on the number of shares of Common Stock
issuable upon exercise of this Warrant (without regard to any limitations in exercise) issued to the Holder on the Issuance Date
(the "Authorized Share Allocation"). In the event that the Holder shall sell or otherwise transfer this Warrant,
each transferee shall be allocated a pro rata portion of such holder's Authorized Share Allocation. Any shares of Common Stock
reserved and allocated to any Person which ceases to hold any SPA Warrants shall be allocated to the Holder and the remaining holders
of SPA Warrants, pro rata based on the shares of Common Stock issuable upon exercise of the SPA Warrants then held by such holders
(without regard to any limitations on the exercise of the SPA Warrants).

 

2.     ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from
time to time as follows:

 

(a)  Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant, with the prior written consent of the Required
Holders, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

 

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(b)  Adjustment
Upon Subdivision or Combination of Shares of Common Stock. If the Company at any time on or after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock
into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date
combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased
and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(b) shall become effective
at the close of business on the date the subdivision or combination becomes effective.

 

(c)  Adjustment.
If the Exercise Price in effect on  March 31, 2017 exceeds
the Closing Bid Price of the Common Stock on March 31, 2017 (the "Adjusted Exercise Price"), the Exercise
Price hereunder shall be reset to the Adjusted Exercise Price on April 3, 2017 and
shall be further subject to adjustment as provided herein.

 

(d)  Other
Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company's Board of Directors will make an appropriate adjustment in the Exercise Price and the
number of Warrant Shares, as mutually determined by the Company's Board of Directors and the Required Holders, so as to protect
the rights of the Holder; provided that no such adjustment pursuant to this Section 2(d) will increase the Exercise Price
or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.

 

(e)  Maximum
Eligibility Number. For the avoidance of doubt, all of the Warrant Share Number, whether or not the Warrant is exercisable
in full at the time of such adjustment by virtue of the Maximum Eligibility Number limitation or otherwise, shall be exercisable
at the Exercise Price in effect at the time of exercise as adjusted on or prior to such date pursuant to this Section 2.

 

(f)   Exercise
Floor Price. Unless and until such time as the Company obtains Shareholder Approval (as defined in the Securities Purchase
Agreement) as required by the rules and regulations of the Principal Market, no adjustment pursuant to Section 2 shall cause the
Exercise Price to be less than $0.71, as adjusted for any stock dividend, stock split, stock combination, reclassification or
similar transaction (the "Exercise Floor Price"). For the avoidance of doubt, if an adjustment to the Exercise
Price pursuant to this Section 2 would cause the Exercise Price to be lower than the Exercise Floor Price but for the immediately
preceding sentence, then the Exercise Price shall be equal to the Exercise Floor Price. Upon the receipt of such Shareholder Approval,
any adjustment to the Exercise Price that would have been made pursuant to this Section 2, but for this Section 2(f), shall be
made on the date of such receipt.

 

 

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3.           RIGHTS
UPON DISTRIBUTION OF ASSETS. If the Company shall declare or make any dividend or other distribution of its assets (or rights
to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant,
including without limitation, the Maximum Percentage) immediately before the date of which a record is taken for such Distribution,
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
participation in such Distribution (provided, however, that to the extent that the Holder's right to participate
in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the
Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result
in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted
such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly
in abeyance) to the same extent as if there had been no such limitation).

 

4.            PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a)          Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of Common Stock (the "Purchase Rights"), then the Holder 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 exercise of this Warrant (without regard to any limitations or restrictions
on exercise of this Warrant, including without limitation, the Maximum Percentage) 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,
that to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent
(and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial
ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until
such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such
initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been
no such limitation).

 

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(b)  Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the
provisions of this Section 4(b) pursuant to written agreements in form and substance reasonably satisfactory to the Required Holders
and approved by the Required Holders, such approval not to be unreasonably withheld or delayed, prior to such Fundamental Transaction,
including agreements, if so requested by the Holder, to deliver to each holder of the SPA Warrants in exchange for such SPA Warrants
a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant,
including, without limitation, an adjusted exercise price equal to the value for the shares of Common Stock reflected by the terms
of such Fundamental Transaction, and exercisable for a corresponding number of shares of capital stock equivalent to the shares
of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this
Warrant) prior to such Fundamental Transaction, and satisfactory to the Required Holders, and with an exercise price which applies
the exercise 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 adjustments to the number of
shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately
prior to the occurrence or consummation of such Fundamental Transaction). Upon the occurrence or consummation of any Fundamental
Transaction, and it shall be a required condition to the occurrence or consummation of any Fundamental Transaction that, the Company
and the Successor Entity or Successor Entities, jointly and severally, shall succeed to, and the Company shall cause any Successor
Entity or Successor Entities to jointly and severally succeed to, and be added to the term "Company" under this Warrant
(so that from and after the date of such Fundamental Transaction, and the provisions of this Warrant referring to the "Company"
shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Company
and the Successor Entity or Successor Entities, jointly and severally, may exercise every right and power of the Company prior
thereto and shall assume all of the obligations of the Company prior thereto under this Warrant with the same effect as if the
Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company in this Warrant,
and, solely at the request of the Holder, if the Successor Entity and/or Successor Entities is a publicly traded corporation whose
common stock is quoted on or listed for trading on an Eligible Market, shall deliver (in addition to and without limiting any right
under this Warrant) to the Holder in exchange for this Warrant a security of the Successor Entity and/or Successor Entities evidenced
by a written instrument substantially similar in form and substance to this Warrant and exercisable for a corresponding number
of shares of capital stock of the Successor Entity and/or Successor Entities (the "Successor Capital Stock") equivalent
to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) prior to such Fundamental Transaction (such corresponding number of shares of Successor Capital Stock
to be delivered to the Holder shall be equal to the greater of (A) the quotient of (i) the aggregate dollar value of all consideration
(including cash consideration and any consideration other than cash ("Non-Cash Consideration"), in such Fundamental
Transaction, as such values are set forth in any definitive agreement for the Fundamental Transaction that has been executed at
the time of the first public announcement of the Fundamental Transaction or, if no such value is determinable from such definitive
agreement, as determined in accordance with Section 12 with the term "Non-Cash Consideration" being substituted for the
term "Exercise Price") that the Holder would have been entitled to receive upon the happening of such Fundamental Transaction
or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction, had this Warrant
been exercised immediately prior to such Fundamental Transaction or the record, eligibility or other determination date for the
event resulting in such Fundamental Transaction (without regard to any limitations on the exercise of this Warrant) (the "Aggregate
Consideration") divided by (ii) the per share Closing Sale Price of such Successor Capital Stock on the Trading Day immediately
prior to the consummation or occurrence of the Fundamental Transaction and (B) the product of (i) the Aggregate Consideration and
(ii) the highest exchange ratio pursuant to which any shareholder of the Company may exchange Common Stock for Successor Capital
Stock) (provided, however, to the extent that the Holder's right to receive any such shares of publicly traded common stock (or
their equivalent) of the Successor Entity would result in the Holder and its other Attribution Parties exceeding the Maximum Percentage,
if applicable, then the Holder shall not be entitled to receive such shares to such extent (and shall not be entitled to beneficial
ownership of such shares of publicly traded common stock (or their equivalent) of the Successor Entity as a result of such consideration
to such extent) and the portion of such shares shall be held in abeyance for the Holder until such time or times, as its right
thereto would not result in the Holder and its other Attribution Parties exceeding the Maximum Percentage, at which time or times
the Holder shall be delivered such shares to the extent as if there had been no such limitation), and such security shall be reasonably
satisfactory to the Holder, and with an identical exercise price to the Exercise Price hereunder (such adjustments to the number
of shares of capital stock and such exercise price being for the purpose of protecting after the consummation or occurrence of
such Fundamental Transaction the economic value of this Warrant that was in effect immediately prior to the consummation or occurrence
of such Fundamental Transaction, as elected by the Holder solely at its option). Upon occurrence or consummation of the Fundamental
Transaction, and it shall be a required condition to the occurrence or consummation of such Fundamental Transaction that, the Company
and the Successor Entity or Successor Entities shall deliver to the Holder confirmation that there shall be issued upon exercise
of this Warrant at any time after the occurrence or consummation of the Fundamental Transaction, as elected by the Holder solely
at its option, shares of Common Stock, Successor Capital Stock or, in lieu of the shares of Common Stock or Successor Capital Stock
(or other securities, cash, assets or other property purchasable upon the exercise of this Warrant prior to such Fundamental Transaction),
such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription
rights), which for purposes of clarification may continue to be shares of Common Stock, if any, that the Holder would have been
entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date for
the event resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental Transaction
or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without regard
to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. In addition
to and not in substitution for any other rights hereunder, prior to the occurrence or consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive securities, cash, assets or other property with respect
to or in exchange for shares of Common Stock (a "Corporate Event"), the Company shall make appropriate provision
to ensure that, and any applicable Successor Entity or Successor Entities shall ensure that, and it shall be a required condition
to the occurrence or consummation of such Corporate Event that, the Holder will thereafter have the right to receive upon exercise
of this Warrant at any time after the occurrence or consummation of the Corporate Event, shares of Common Stock or Successor Capital
Stock or, if so elected by the Holder, in lieu of the shares of Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of this Warrant prior to such Corporate Event (but not in lieu of such items still issuable under
Sections 3 and 4(a), which shall continue to be receivable on the Common Stock or on the such shares of stock, securities, cash,
assets or any other property otherwise receivable with respect to or in exchange for shares of Common Stock), such shares of stock,
securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights and any
shares of Common Stock) which the Holder would have been entitled to receive upon the occurrence or consummation of such Corporate
Event or the record, eligibility or other determination date for the event resulting in such Corporate Event, had this Warrant
been exercised immediately prior to such Corporate Event or the record, eligibility or other determination date for the event resulting
in such Corporate Event (without regard to any limitations on exercise of this Warrant). Provision made pursuant to the preceding
sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this Section 4(b) shall apply
similarly and equally to successive Fundamental Transactions and Corporate Events. Notwithstanding the foregoing, the Holder may
elect, in its sole discretion, by delivery of written notice to the Company, to waive this Section 4(b) and allow the Company to
enter into or be a party to a Fundamental Transaction without the assumption of this Warrant pursuant to the provisions of this
Section 4(b), provided, however, that any such waiver shall only be on the terms of such waiver and bind the Holder
with respect to this Warrant and not any holder of any other SPA Warrants.

 

    - 10 -

     

    

 

(c)  Notwithstanding
anything herein to the contrary, the Company shall be required to obtain the prior written consent of the Required Holders to enter
into, allow and/or consummate a Fundamental Transaction other than one in which a Successor Entity that is a publicly traded corporation
whose stock is quoted or listed for trading on an Eligible Market assumes this Warrant such that the Warrant shall be exercisable
for the publicly traded Common Stock of such Successor Entity.

 

5.     NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation or Bylaws, or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will
at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of
any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the exercise of the SPA Warrants, the Required Reserve Amount to effect the exercise of the
SPA Warrants then outstanding (without regard to any limitations on exercise).

 

    - 11 -

     

    

 

6.            WARRANT
HOLDER NOT DEEMED A SHAREHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity
as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's
capacity as the Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger,
conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance
to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices
and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders.

 

7.            REISSUANCE
OF WARRANTS.

 

(a)  Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

(b)  Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.

 

(c)  Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new warrant or warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no SPA
Warrants for fractional Warrant Shares shall be given.

 

    - 12 -

     

    

 

(d)  Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.

 

8.          NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment
of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least
fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining
rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided in each case that such
information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. It is expressly
understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive and may not
be disputed or challenged by the Company.

 

9.          AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Required Holders.

 

    - 13 -

     

    

 

10.         GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of
the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
New York. The Company 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, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company 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
to the Company at the address set forth in Section 9(f) of the Securities Purchase 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 manner permitted by law. Nothing contained herein shall be deemed or operate to preclude
the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company's
obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or
other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

11.         CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the Buyers and shall not be construed against
any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.

 

12.         DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within
two (2) Business Days after receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the
Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within
three (3) Business Days after such disputed determination or arithmetic calculation being submitted to the Holder, then the Company
shall, within two (2) Business Days submit via facsimile (a) the disputed determination of the Exercise Price to an independent,
reputable investment bank selected by the Holder and approved by the Company, such approval not to be unreasonably withheld or
delayed or (b) the disputed arithmetic calculation of the Warrant Shares to an independent, outside accountant, selected by the
Holder and approved by the Company, such approval not to be unreasonably withheld or delayed. The Company shall cause at its expense
the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company
and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations.
Such investment bank's or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent
demonstrable error.

 

    - 14 -

     

    

 

13.         REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual
damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.

 

14.         TRANSFER.         This
Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the Company
and, except for the Warrant Shares sold pursuant to an effective registration statement or pursuant to Rule 144, shall be offered
for sale, sold, transferred, pledged or assigned in accordance with Section 2(g) of the Securities Purchase Agreement.

 

15.         SEVERABILITY.         If
any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

16.         DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its Subsidiaries (as defined in the Securities Purchase Agreement), the Company shall within one (1) Business Day after any
such receipt or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In
the event that the Company believes that a notice contains material, nonpublic information relating to the Company or its Subsidiaries,
the Company so shall indicate to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication,
the Holder shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information
relating to the Company or its Subsidiaries.

 

17.          CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)  "1933
Act" means the Securities Act of 1933, as amended.

 

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(b)  "Affiliate"
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that "control" of a Person means the power
directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such
Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

(c)  "Attribution
Parties" means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by
the Holder's investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or
any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of
the foregoing and (iv) any other Persons whose beneficial ownership of the Company's Common Stock would or could be aggregated
with the Holder's and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of
the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.

 

(d)  "Bloomberg"
means Bloomberg Financial Markets.

 

(e)  "Business
Day" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

(f)   "Closing
Bid Price" and "Closing Sale Price" means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or "pink sheets" by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 12. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

 

    - 16 -

     

    

 

(g)  "Common
Stock" means (i) the Company's shares of Class A Common Stock, par value $0.0001 per share, and (ii) any share
capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common
Stock.

 

(h)  "Convertible
Securities" means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.

 

(i)   "Eligible
Market" means the Principal Market, the NYSE MKT LLC, The NASDAQ Global Market, The NASDAQ Global Select Market, The New
York Stock Exchange, Inc., the OTC Bulletin Board, the OTC QX or the OTC QB.

 

(j)   "Expiration
Date" means the date that is sixty (60) months after the Initial Exercisability Date, or, if such date falls on a day
other than a Business Day or on which trading does not take place on the Principal Market (a "Holiday"), the next
day that is not a Holiday.

 

(k)  "Fundamental
Transaction" means (A) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation)
another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties
or assets of the Company or any of its "significant subsidiaries" (as defined in Rule 1-02 of Regulation S-X) to one
or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or
have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares
of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with
any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares
of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such
purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of
at least 50% of the outstanding shares of Common Stock, or (iv) consummate a share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject
Entities whereby such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares
of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by
all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement
or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities
become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares
of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or indirectly,
including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually
or the Subject Entities in the aggregate to be or become the "beneficial owner" (as defined in Rule 13d-3 under the 1934
Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction
in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off,
scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x)
at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the
aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of
the Subscription Date calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z)
a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction
requiring other shareholders of the Company to surrender their shares of Common Stock without approval of the shareholders of the
Company or (C) directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions,
the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents,
the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition
which may be defective or inconsistent with the intended treatment of such instrument or transaction.

 

    - 17 -

     

    

 

(l)  "Group"
means a "group" as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.

 

(m) "Lead
Investor" means Hudson Bay Master Fund Ltd.

 

(n)  "Master
Restricted Account" shall have the meaning attributed to such term in the SPA Securities.

 

(o)  "Maximum
Eligibility Increase Factor" means a number of shares of Common Stock equal to the product of (i) the Warrant Share Number
and (ii) the Percentage Interest.

 

(p)  "Maximum
Eligibility Number" means initially ______________ (_____________)2
and such number shall be increased each time the Holder releases cash from the Holder's Master Restricted Account to the Company,
by a number of shares of Common Stock equal to the Maximum Eligibility Increase Factor.

 

(q)  "Options"
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

 

2
Insert 7.50% of the Warrant Share Number.

  

    - 18 -

     

    

 

(r)  "Parent
Entity" of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common shares or common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected
by the Required Holders, any other market, exchange or quotation system), or, if there is more than one such Person or such entity,
the Person or such entity designated by the Required Holders or in the absence of such designation, such Person or entity with
the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(s) "Percentage
Interest" means a fraction, (i) the numerator of which is the cash amount being released by the Holder to the Company
from the Holder's Master Restricted Account, and (ii) the denominator of which is the Holder's aggregate Purchase Price (as defined
in the Securities Purchase Agreement) as set forth in column (5) opposite the Holder' name in the Schedule of Buyers attached to
the Securities Purchase Agreement.

 

(t)  "Person"
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.

 

(u) "Principal
Market" means The NASDAQ Capital Market.

 

(v) "Registration
Rights Agreement" means that certain Registration Rights Agreement dated as of the Subscription Date by and among the
Company and the Buyers.

 

(w) "Required
Holders" means the holders of the SPA Warrants representing at least fifty-five (55%) of the shares of Common Stock underlying
the SPA Warrants then outstanding and shall include the Lead Investor so long as the Lead Investor and/or any of its Affiliates
collectively hold at least five percent (5%) of the SPA Warrants.

 

(x)  "Rule
144" means Rule 144 promulgated under the 1933 Act or any successor rule thereto.

 

(y) "Subject
Entity" means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.

 

(z)  "Successor
Entity" means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the
Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.

 

(aa)         "Trading
Day" means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded; provided that "Trading Day" shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

 

    - 19 -

     

    

 

[Signature Page Follows]

 

    - 20 -

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

	 	REAL GOODS SOLAR, INC.	 
	 	 	 
	 	By:___________________________	 
	 	Name:	 
	 	Title:	 

  

     

     

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

REAL GOODS SOLAR, INC.

 

The
undersigned holder hereby exercises the right to purchase _________________ of the shares of Class A Common Stock, par value $0.0001
per share (the "Warrant Shares"), of Real Goods Solar, Inc., a Colorado corporation
(the "Company"), evidenced by the attached Series G Warrant to purchase Common Stock No. G-______ (the "Warrant").
Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

1. Form of Exercise
Price. The holder intends that payment of the Exercise Price shall be made as:

 

____________a
"Cash Exercise" with respect to _________________ Warrant Shares; or

 

____________a
"Cashless Exercise" with respect to _______________ Warrant Shares.

 

2. Payment of Exercise
Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.

 

3. Delivery of Warrant
Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant. 

 

	 ̈          Check here if the shares of Common Stock to be issued in connection with this Exercise Notice are being sold contemporaneously herewith by the Holder.
	 
	Please issue the Warrant Shares in the following name and to the following account:
	 
	Issue to:	 
	 	 
	 	 

 

	Facsimile Number and Electronic Mail:	 

 

	Authorization:	 

 

	By:	 

 

	Title:	 

 

     

     

    

  

	Dated:	 

 

	Broker Name:	 

 

	Broker DTC #:	 

 

	Broker Telephone #:	 

 

	Account Number:	 

	  (if electronic book entry transfer)	 

 

	Transaction Code Number:	 

	  (if electronic book entry transfer)	 

 

     

     

    

 

TRANSFER AGENT INSTRUCTIONS

 

REAL
GOODS SOLAR, INC.

 

____________ __, 20__

 

Computershare Trust Company, N.A.

8742 Lucent Blvd. Suite 225

Highlands Ranch CO 80129

Telephone: (303) 262-0684

Facsimile: (303) 226-0609

Attention: Brenda Baril

 

		Re:	Order to Issue Common Stock of Real Goods Solar, Inc.

 

Ladies and Gentlemen:

 

Reference is made to (A) that certain
Securities Purchase Agreement, dated as of April 1, 2016, by and among Real Goods Solar, Inc., a Colorado corporation (the "Company"),
and the investors named on the Schedule of Buyers attached thereto (collectively, the "Buyers") pursuant to which
the Company is issuing to the Buyers and certain other investors (collectively "Holders") (i) senior secured
convertible notes (the "Notes") which are convertible into shares of Class A common stock of the Company, par
value $0.0001 per share (the "Common Stock") and (ii) Series G Warrants (the "Warrants"), each
of which is exercisable to purchase shares of Common Stock; (B) the related Transfer Agent Instructions, dated April 1, 2016 (the
"2016 Instruction"); (C) the exercise notice attached hereto (the "Exercise Notice"); and (D)
the attached copy of a written instruction from the General Counsel of the Company (or its outside legal counsel) that either
(1) a registration statement covering the resale of the shares of Common Stock subject to this letter has been declared effective
by the Securities and Exchange Commission under the Securities Act of 1933, as amended, naming the holder as a selling shareholder
thereunder, (2) that the holder may then transfer such shares of Common Stock under Rule 144 promulgated under the Securities
Act of 1933, as amended ("Rule 144") or (3) that the holder may transfer such shares of Common Stock under Rule
144, without having to comply with the information requirements under Rule 144(c)(1) (the "Counsel Instruction").

 

This instruction letter shall serve as
our authorization and direction to you to issue:

 

		·	to the recipient identified under "Issue to" in the Exercise Notice,

		·	in book entry form,

		·	such number of shares of Common Stock as set forth under "Delivery
of Warrant Shares," respectively, in the Exercise Notice,

		·	out of the Transfer Agent Reserve (as defined in the 2016 Instruction),

		·	by crediting the designated recipient's balance account with the Depository Trust Company, identified
in the Exercise Notice under "Broker Name," "Broker DTC#," "Account Number," and "Transaction
Code Number" through its Deposit Withdrawal at Custodian system

 

[Signature Page Follows]

 

     

     

    

 

Should you have any
questions concerning this matter, please contact me at 303-222-8344.

 

	 	Very truly yours,
	 	 
	 	REAL GOODS SOLAR, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

SECURITIES PURCHASE
AGREEMENT (the "Agreement"), dated as of April 1, 2016, by and among Real Goods Solar, Inc., a Colorado corporation,
with headquarters located at 833 West South Boulder Road, Louisville, Colorado 80027-2452 (the "Company"), and
the investors listed on the Schedule of Buyers attached hereto (individually, a "Buyer" and collectively, the
"Buyers").

 

WHEREAS:

 

A.            The
Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the "1933 Act"), and Rule 506(b) of Regulation D
("Regulation D") as promulgated by the United States Securities and Exchange Commission (the "SEC")
under the 1933 Act.

 

B.             The
Company has authorized a new series of senior secured convertible notes of the Company, in substantially the form attached hereto
as Exhibit A (the "Notes"), which Notes shall be convertible into the Company's Class A common stock, par
value $0.0001 per share (the "Common Stock") (the shares of Common Stock issuable pursuant to the terms of
the Notes, including, without limitation, upon conversion, upon amortization or otherwise, collectively, the "Conversion
Shares"), in accordance with the terms of the Notes.  

 

C.            Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) that aggregate
principal amount of Notes set forth opposite such Buyer's name in column (3) on the Schedule of Buyers attached hereto (which aggregate
principal amount of Notes for all Buyers shall be $10,000,000), and (ii) Series G Warrants, in substantially the form attached
hereto as Exhibit B (the "Warrants"), representing the right to acquire that number of shares of Common
Stock set forth opposite such Buyer's name in column (4) on the Schedule of Buyers (as exercised, collectively, the "Warrant
Shares").

 

D.            Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit C (the "Registration Rights Agreement"), pursuant
to which the Company has agreed to provide certain registration rights with respect to the Registrable Securities (as defined in
the Registration Rights Agreement) under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state
securities laws.

 

E.             In
connection with the transactions contemplated hereby, the Company and each Buyer will enter into, at or prior to the Closing (as
defined below), a Master Control Account Agreement in the form attached hereto as Exhibit D (as amended or modified from
time to time in accordance with its terms, each a "Master Control Account Agreement" and collectively, the "Master
Control Account Agreements") with Bank of Hawaii (the "Bank").  A bank account governed by
the Master Control Account Agreement shall be referred to herein as a "Master Restricted Account" and collectively,
the "Master Restricted Accounts".

 

     

     

    

 

F.             The
Notes, the Conversion Shares, the Warrants and the Warrant Shares collectively are referred to herein as the "Securities".

 

NOW, THEREFORE,
the Company and each Buyer hereby agree as follows:

 

1.             PURCHASE
AND SALE OF NOTES AND WARRANTS.

 

(a)          Purchase
of Notes and Warrants.  Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below,
the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company
on the Closing Date (as defined below), (x) a principal amount of Notes as is set forth opposite such Buyer's name in column (3)
on the Schedule of Buyers and (y) related Warrants to acquire up to that number of Warrant Shares as is set forth opposite such
Buyer's name in column (4) on the Schedule of Buyers (the "Closing").

 

(b)          Closing.  The
date and time of the Closing (the "Closing Date") shall be 10:00 a.m., New York City time, on the date hereof
(or such other date and time as is mutually agreed to by the Company and each Buyer) after notification of satisfaction (or waiver)
of the conditions to the Closing set forth in Sections 6 and 7 below, at the offices of Schulte Roth & Zabel LLP, 919 Third
Avenue, New York, New York 10022.

 

(c)          Purchase
Price.  The aggregate purchase price for the Notes and the Warrants to be purchased by each Buyer at the Closing
(the "Purchase Price") shall be the amount set forth opposite each Buyer's name in column (5) of the Schedule
of Buyers.  Each Buyer shall pay $1,000 for each $1,000 of principal amount of Notes and related Warrants to be purchased
by such Buyer at the Closing.  The Buyers and the Company agree that the Notes and the Warrants constitute an "investment
unit" for purposes of Section 1273(c)(2) of the Internal Revenue Code of 1986, as amended (the "Code").  The
Buyers and the Company mutually agree that the allocation of the issue price of such investment unit between the Notes and the
Warrants in accordance with Section 1273(c)(2) of the Code and Treasury Regulation Section 1.1273-2(h) shall be an aggregate amount
of $49,794.60 allocated to the Warrants and the balance of the Purchase Price allocated to the Notes, and neither the Buyers nor
the Company shall take any position inconsistent with such allocation in any tax return or in any judicial or administrative proceeding
in respect of taxes.

 

(d)          Form
of Payment.  On the Closing Date, (i) each Buyer shall pay for the Notes and the Warrants to be issued and sold to
such Buyer at the Closing by paying: (1) 7.5% of its applicable Purchase Price to the Company (less, in the case of Hudson Bay
Master Fund Ltd. ("Hudson Bay"), the amounts withheld pursuant to Section 4(g)), by wire transfer of immediately
available funds in accordance with the Company's written wire instructions and (2) 92.5% of its Purchase Price to such Buyer's
Master Restricted Account by wire transfer of immediately available funds in accordance with the wire instructions set forth in
such Buyer's Master Control Account Agreement, such portion of such Buyer's Purchase Price to be held and released by the Bank
in accordance with and pursuant to the terms and conditions of such Buyer's Master Control Account Agreement and (ii) the
Company shall deliver to each Buyer the Notes (allocated in the principal amounts as such Buyer shall request) which such Buyer
is then purchasing hereunder along with the Warrants (allocated in the amounts as such Buyer shall request) which such Buyer is
purchasing hereunder, in each case duly executed on behalf of the Company and registered in the name of such Buyer or its designee.

 

    	- 2 -

     

    

 

2.             BUYER'S
REPRESENTATIONS AND WARRANTIES.  Each Buyer, severally and not jointly, represents and warrants with respect to only
itself that:

 

(a)          No
Public Sale or Distribution.  Such Buyer is (i) acquiring the Notes and the Warrants, (ii) upon conversion by the
Buyer of the Notes, will acquire the Conversion Shares issuable upon conversion of the Notes, and (iii) upon exercise of the Warrants,
will acquire the Warrant Shares issuable upon exercise of the Warrants, for its own account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1933
Act; provided, however, that by making the representations herein, such Buyer does not agree to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant
to a registration statement or an exemption under the 1933 Act and any applicable state securities laws.  Such Buyer
is acquiring the Securities hereunder in the ordinary course of its business.  Such Buyer does not presently have any
agreement or understanding, directly or indirectly, with any Person (as defined below) to distribute any of the Securities.  For
purposes of this Agreement, "Person" means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other entity and any government or any department or agency
thereof.

 

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

 

(c)          Reliance
on Exemptions.  Such Buyer understands that the Securities are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying
in part upon the truth and accuracy of, and such Buyer's compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility
of such Buyer to acquire the Securities.

 

(d)         Information.  Such
Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer.  Such
Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company.  Neither such inquiries
nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify,
amend or affect such Buyer's right to rely on the Company's representations and warranties contained herein.  Such Buyer
understands that its investment in the Securities involves a high degree of risk.  Such Buyer has sought such accounting,
legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of
the Securities.

 

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

 

    	- 3 -

     

    

 

(f)          Transfer
or Resale.  Such Buyer understands that except as provided in the Registration Rights Agreement:  (i) the
Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for
sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the Company
an opinion of counsel selected by such Buyer, in a generally acceptable form, to the effect that such Securities to be sold, assigned
or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Buyer provides
the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 ("Rule
144") or Rule 144A ("Rule 144A")  promulgated under the 1933 Act, as amended, (or a successor
rule thereto); (ii) any sale of the Securities made in reliance on Rule 144 or Rule 144A may be made only in accordance with the
terms of Rule 144 or Rule 144A, as applicable, and further, if Rule 144 or Rule 144A is not available, any resale of the Securities
under circumstances in which the seller (or the Person) through whom the sale is made) may be deemed to be an underwriter (as that
term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations
of the SEC thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under
the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.  Notwithstanding
the foregoing, the Securities may be pledged in connection with a bona fide margin account or other loan or financing arrangement
secured by the Securities and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document (as defined in Section 3(b)), including,
without limitation, this Section 2(f).

 

(g)          Legends.  Such
Buyer understands that the certificates or other instruments representing the Notes and the Warrants and, until the earlier of
(i) the date the Conversion Shares and the Warrant Shares are eligible for resale pursuant to Rule 144 without having to comply
with Rule 144(c)(1), unless the Buyer indicates that it is selling the applicable Conversion Shares or Warrant Shares pursuant
to Rule 144 while the Company is in compliance with the requirements of Rule 144(c)(1) contemporaneously with receipt of such Conversion
Shares and Warrant Shares, and (ii) such time as the resale of the Conversion Shares and the Warrant Shares have been registered
under the 1933 Act as contemplated by the Registration Rights Agreement, the stock certificates representing the Conversion Shares
and the Warrant Shares, except as set forth below, shall bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):  

 

    	- 4 -

     

    

 

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

 

The legend set forth above shall be removed
and the Company shall issue a certificate without such legend to the holder of the Securities upon which it is stamped or issue
to such holder by electronic delivery at the applicable balance account at The Depository Trust Company ("DTC"),
if (i) such Securities are registered for resale under the 1933 Act, (ii) in connection with a sale, assignment or other transfer
exempt from registration under the applicable requirements of the 1933 Act and any applicable state securities laws and such holder
provides the Company with an opinion of counsel selected by such holder, in a generally acceptable form for opinions of counsel
in connection with such transactions to the effect that such Securities to be sold, assigned or transferred may be sold, assigned
or transferred pursuant to an exemption from such registration under the applicable requirements of the 1933 Act, (iii) the date
the holder of the Securities is eligible to sell, assign or transfer the Securities pursuant to Rule 144 without having to comply
with the information requirements under Rule 144(c)(1), or Rule 144A, or (iv) the date Securities are eligible to be sold, assigned
or transferred pursuant to Rule 144 while the Company is in compliance with the requirements of Rule 144(c)(1) contemporaneously
with the sale, assignment or transfer of such Securities.  In the event the legend set forth above has been removed because
the Securities are registered for resale under the 1933 Act, each Buyer agrees to sell such Securities only pursuant to an effective
registration statement under the 1933 Act (including the Registration Statement), or in a transaction exempt from registration
under the applicable requirements of the 1933 Act and any applicable state securities laws and such holder provides the Company
with an opinion of counsel selected by such holder, in a generally acceptable form for opinions of counsel in connection with such
transactions to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant
to an exemption from such registration under the applicable requirements of the 1933 Act.  Each Buyer acknowledges and
agrees that the Securities remain “restricted securities” as such term is defined in Rule 144 notwithstanding removal
of the legend set forth above until such Securities are sold or transferred under an effective registration statement under the
1933 Act (including the Registration Statement) or under Rule 144 or Rule 144A.  The Company shall be responsible for
the fees of its transfer agent and all DTC fees associated with such issuance.  

 

    	- 5 -

     

    

 

(h)         Validity;
Enforcement.  This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against
such Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity
or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors' rights and remedies.

 

(i)          No
Conflicts.  The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement
and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws) applicable to such Buyer, except in the case of clauses
(ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the ability of such Buyer to perform its obligations hereunder.

 

(j)          Residency.  Such
Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers.

 

3.             REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

The Company represents and
warrants to each of the Buyers that:  

 

(a)          Organization
and Qualification.  Each of the Company and its "Subsidiaries" (which, for the purposes of this
Agreement means any entity or joint venture in which the Company, directly or indirectly, owns any of the capital stock or holds
an equity or similar interest) are entities duly organized and validly existing and in good standing under the laws of the jurisdiction
in which they are formed, and have the requisite power and authorization to own or lease their properties and to carry on their
business as now being conducted and as presently proposed to be conducted.  The Company's significant Subsidiaries (as
such term is defined in Rule 1-02 of Regulation S-X promulgated by the SEC) include those listed in Exhibit 21.1 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the "Annual Report"), other than Real
Goods Syndicated, Inc., which has liquidated its assets since December 31, 2013.  The Subsidiaries are the only subsidiaries,
direct or indirect, of the Company. The Subsidiaries set forth on Schedule 3(a) under the heading "Significant Subsidiaries"
are referred to herein as the "Significant Subsidiaries."  The Subsidiaries which are not Significant
Subsidiaries are not significant subsidiaries as defined in Rule 1-02 of Regulation S-X.  Each of the Company and its
Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership
of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure
to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.  As used
in this Agreement, "Material Adverse Effect" means any material adverse effect on the business, properties, assets,
liabilities, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries,
individually or taken as a whole, or on the transactions contemplated hereby or on the other Transaction Documents or by the agreements
and instruments to be entered into in connection herewith or therewith, or on the authority or ability of the Company to perform
its obligations under this Agreement or the other Transaction Documents or to consummate any transactions contemplated by this
Agreement or the other Transaction Documents. The outstanding shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable and are owned by the Company or another Subsidiary free and clear
of all liens, encumbrances and equities and claims and no options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into shares of capital stock or ownership interests in the Subsidiaries are
outstanding, except, in each case, as described on Schedule 3(a).

 

    	- 6 -

     

    

 

(b)         Authorization;
Enforcement; Validity.  The Company has the requisite power and authority to enter into and perform its obligations
under this Agreement, the Notes, the Warrants, the Registration Rights Agreement, the Irrevocable Transfer Agent Instructions (as
defined in Section 5(b)), the Voting Agreement (as defined in Section 4(s)), the Master Control Account Agreements and each of
the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively,
the "Transaction Documents") and to issue the Securities in accordance with the terms hereof and thereof.  The
execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Notes and the Warrants,
and the reservation for issuance and the issuance of the Conversion Shares issuable pursuant to the terms of the Notes and the
reservation for issuance and issuance of the Warrant Shares issuable upon exercise of the Warrants have been duly authorized by
the Company's Board of Directors and (other than the filing of a Form D and one or more Registration Statements (as defined in
the Registration Rights Agreement) in accordance with the requirements of the Registration Rights Agreement with the SEC, filings
with The NASDAQ Capital Market (the "Principal Market") and other filings as may be required by state securities
agencies) no further filing, consent, or authorization is required by the Company, its Board of Directors or its shareholders.  This
Agreement and the other Transaction Documents have been duly executed and delivered by the Company, and constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

 

(c)          Issuance
of Securities.  The issuance of the Notes and the Warrants are duly authorized and, upon issuance, shall be validly
issued and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof.  As
of the Closing, a number of shares of Common Stock shall have been duly authorized and reserved for issuance which equals or exceeds
(the "Initial Required Reserved Amount") 200% of the sum of (i) the maximum number of Conversion Shares issued
and issuable pursuant to the Notes based on the Equity Conditions Conversion Price (as defined in the Notes) (without taking into
account any limitations on the issuance thereof pursuant to the terms of the Notes) and (ii) the maximum number of Warrant Shares
issued and issuable pursuant to the Warrants (without taking into account any limitations on the exercise of the Warrants set forth
in the Warrants), each as of the Trading Day immediately preceding the applicable date of determination.  As of
the date hereof, there are 137,438,057 shares of Common Stock authorized and unissued.  Neither the offering nor sale
of the Securities as contemplated by this Agreement gives rise to any rights, other than those which have been waived or satisfied,
for or relating to the registration of any shares of Common Stock.  Upon conversion of the Notes in accordance with the
Notes or exercise of the Warrants in accordance with the Warrants, as the case may be, the Conversion Shares and the Warrant Shares,
respectively, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder
of Common Stock.  Assuming the accuracy of each of the representations and warranties set forth in Section 2 of this
Agreement, the offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act.  Except
as set forth on Schedule 3(c), there are no securities or instruments issued by the Company containing anti-dilution or
similar provisions that will be triggered by the issuance of the Securities.

 

    	- 7 -

     

    

 

(d)         No
Conflicts.  The execution, delivery and performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and
the Warrants and reservation for issuance and issuance of the Conversion Shares and the Warrant Shares) will not (i) result in
a violation of the Articles of Incorporation (as defined in Section 3(u)) or Bylaws (as defined in Section 3(u)), any memorandum
of association, articles of incorporation, certificate of formation, bylaws, any certificate of designations or other constituent
documents of the Company or any of its Subsidiaries, any capital stock of the Company or any of its Subsidiaries or the articles
of association or bylaws of the Company or any of its Subsidiaries or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or instrument, including, without limitation, under the Permitted
Senior Loan Agreement (as defined in the Notes), to which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or any of their respective properties is bound, or (iii) after complying with NASDAQ Rule 5250(e)(2),
result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities
laws and regulations and the rules and regulations of the Principal Market and including all applicable laws of the State of Colorado
and any foreign, federal and state laws, rules and regulations) applicable to the Company or any of its Subsidiaries or by which
any property or asset of the Company or any of its Subsidiaries is bound or affected.

 

(e)          Consents.  Neither
the Company nor any of its Subsidiaries is required to obtain any consent, authorization or order of, or make any filing or registration
with (other than the filing of a Form D with the SEC, any registration statement as required under the Registration Rights Agreement,
other filings as may be required by state securities agencies, and filings required by the Principal Market), any court, governmental
agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof which
have not been previously obtained or made.  All consents, authorizations, orders, filings and registrations which the
Company or any of its Subsidiaries is required to obtain pursuant to the preceding sentence have been obtained or effected on or
prior to the Closing Date (or in the case of the filings detailed above, will be made timely after the Closing Date in accordance
with the requirements of Regulation D in the case of the Form D filing and in accordance with the requirements of the Registration
Rights Agreement in the case of the registration statement), and the Company and its Subsidiaries are unaware of any facts or circumstances
that might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings
pursuant to the preceding sentence.  Except as previously disclosed on the Company’s Form 8-K filed on December
24, 2015, the Company is not in violation of the listing requirements of the Principal Market and has no knowledge of any facts
or circumstances that would reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.  The
issuance by the Company of the Securities shall not have the effect of delisting or suspending the Common Stock from the Principal
Market.  

 

    	- 8 -

     

    

 

(f)          Acknowledgment
Regarding Buyer's Purchase of Securities.  The Company acknowledges and agrees that each Buyer is acting solely in
the capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and
thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an "affiliate"
of the Company or any of its Subsidiaries (as defined in Rule 144) or (iii) to the knowledge of the Company, a "beneficial
owner" of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act
of 1934, as amended (the "1934 Act")).  The Company further acknowledges that no Buyer is acting as
a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or
agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to
such Buyer's purchase of the Securities.  The Company further represents to each Buyer that the Company's decision to
enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.

 

(g)         No
General Solicitation; Placement Agent's Fees.  Neither the Company, nor any of its Subsidiaries or affiliates, nor
any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Securities.  The Company shall be responsible for the payment
of any placement agent's fees, financial advisory fees, or brokers' commissions (other than for persons engaged by any Buyer or
its investment advisor) relating to or arising out of the transactions contemplated hereby, including, without limitation, placement
agent fees payable to ROTH Capital Partners, LLC, as placement agent (the "Placement Agent") in connection with
the sale of the Securities.  The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense
(including, without limitation, attorney's fees and out-of-pocket expenses) arising in connection with any such claim.  The
Company acknowledges that it has engaged the Placement Agent in connection with the sale of the Securities.  Other than
the Placement Agent, neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection
with the sale of the Securities.

 

    	- 9 -

     

    

 

(h)         No
Integrated Offering.  None of the Company, its Subsidiaries, any of their affiliates, nor any Person acting on 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 require registration of the issuance of any of the Securities under the 1933 Act, or the rules, regulations
or the interpretations thereof by the SEC, whether through integration with prior offerings or otherwise, or cause this offering
of the Securities to require approval of shareholders of the Company for purposes of the 1933 Act or any applicable shareholder
approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system
on which any of the securities of the Company are listed or designated for quotation.  None of the Company, its Subsidiaries,
their affiliates nor any Person acting on their behalf will take any action or steps referred to in the preceding sentence that
would require registration of the issuance of any of the Securities under the 1933 Act or cause the offering of the Securities
to be integrated with other offerings for purposes of any such applicable shareholder approval provisions.

 

(i)           Dilutive
Effect.  The Company understands and acknowledges that the number of Conversion Shares issuable pursuant to terms
of the Notes will increase in certain circumstances.  The Company further acknowledges that its obligation to issue Conversion
Shares pursuant to the terms of the Notes in accordance with this Agreement and the Notes is absolute and unconditional regardless
of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

(j)           Application
of Takeover Protections; Rights Agreement.  The Company and its board of directors have taken all necessary action,
if any, in order to render inapplicable any control share acquisition, interested shareholder, business combination, poison pill
(including any distribution under a rights agreement) or other similar anti-takeover provision under the Articles of Incorporation,
Bylaws or other organizational documents or the laws of the jurisdiction of its formation which is or could become applicable to
any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company's issuance
of the Securities and any Buyer's ownership of the Securities.  The Company has not adopted a shareholder rights plan
or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company
or any of its Subsidiaries.

 

(k)          SEC
Documents; Financial Statements.  During the two (2) years prior to the date hereof, the Company has timely filed
(which includes in reliance on, and after compliance with the deadlines required by, Rule 12b-25 of the 1934 Act) all reports,
schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements
of the 1934 Act (all of the foregoing filed prior to the date hereof or prior to the Closing Date, as applicable, and all exhibits
included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter
referred to as the "SEC Documents").  The Company has delivered to the Buyers or their respective representatives
true, correct and complete copies of the SEC Documents not available on the EDGAR system.  As of their respective filing
dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations
of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with
the SEC, 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.  As
of their respective filing dates, the financial statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto.  Such
financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during
the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the
case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments,
which will not be material either individually or in the aggregate).  No other information provided by or on behalf of
the Company to the Buyers which is not included in the SEC Documents, including, without limitation, information referred to in
Section 2(d) of this Agreement or in the disclosure schedules to this Agreement, contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstance under which
they are or were made, not misleading.

 

    	- 10 -

     

    

 

(l)          Absence
of Certain Changes.  Except as disclosed in Schedule 3(l), since December 31, 2014, there has been no material
adverse change and no material adverse development in the business, assets, liabilities, properties, operations, condition (financial
or otherwise), results of operations or prospects of the Company or its Subsidiaries.  Except as disclosed in Schedule
3(l), since December 31, 2014, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii)
sold any assets, individually or in the aggregate, in excess of $500,000 outside of the ordinary course of business or (iii) had
capital expenditures, individually or in the aggregate, in excess of $350,000.  The Company and the Subsidiaries have
no material contingent obligations which are not disclosed in the Company's consolidated financial statements which are included
in the Annual Report.  Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant
to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding-up nor does the
Company nor any Subsidiary have any knowledge or reason to believe that any of its respective creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact that would reasonably lead a creditor to do so.  The Company
and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions
contemplated hereby to occur at the Closing, will not be Insolvent (as defined below).  For purposes of this Section
3(l), "Insolvent" means, with respect to any Person, (i) the present fair saleable value of such Person's assets
is less than the amount required to pay such Person's total Indebtedness (as defined in the Notes), (ii) such Person is unable
to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured,
(iii) such Person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature
or (iv) such Person has unreasonably small capital with which to conduct the business in which it is engaged as such business is
now conducted and is proposed to be conducted.

 

(m)         No
Undisclosed Events, Liabilities, Developments or Circumstances.  No event, liability, development or circumstance
has occurred or exists, or is contemplated to occur with respect to the Company, its Subsidiaries or their respective business,
properties, prospects, operations or financial condition, that would be required to be disclosed by the Company under applicable
securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its
Common Stock and which has not been publicly announced.

 

    	- 11 -

     

    

 

(n)          Conduct
of Business; Regulatory Permits.  Neither the Company nor any of its Subsidiaries is in violation of any term of
or in default under any certificate of designations of any outstanding series of preferred stock of the Company (if any), its Articles
of Incorporation or Bylaws or their organizational charter or memorandum of association or articles of incorporation or articles
of association or bylaws, respectively.  Except as set forth in Schedule 3(n), neither the Company nor any of
its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the
Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation
of any of the foregoing, except for possible violations which could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.  Without limiting the generality of the foregoing, except as set forth in Schedule
3(n), the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge
of any facts or circumstances that would reasonably lead to delisting or suspension of the Common Stock by the Principal Market
in the foreseeable future.  During the two (2) years prior to the date hereof, the Common Stock has been designated for
quotation on the Principal Market.  Except as set forth in Schedule 3(n), during the two (2) years prior to the
date hereof, (i) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (ii) the Company has
received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common
Stock from the Principal Market.  The Company and its Subsidiaries possess all certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, except
where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material
Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit.

 

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

 

(p)          Compliance
with Anti-Money Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times
in compliance with applicable financial recordkeeping and reporting requirements and all other applicable U.S. and non-U.S. anti-money
laundering laws and regulations, including, but not limited to, those of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the USA Patriot Act of 2001 and the applicable money laundering statutes of all applicable jurisdictions, the
rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced
by any governmental agency (collectively, the "Anti-Money Laundering Laws"), the Company has in place policies
and procedures reasonably designed to ensure that its and its Subsidiaries’ operations will continue to be conducted in compliance
with all applicable 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 of its subsidiaries with respect to the Anti-Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.

 

    	- 12 -

     

    

 

(q)          No
Conflicts with Sanctions Laws.  Neither the Company nor any of its Subsidiaries, nor any director, officer,
or to the Company’s knowledge, employee, agent, affiliate or other person associated with or acting on behalf of the Company
or any of its Subsidiaries or, to the Company’s knowledge, affiliates is, or is directly or indirectly owned or controlled
by, a Person that is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including,
without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury ("OFAC") or the
U.S. Departments of State or Commerce and including, without limitation, the designation as a "specially designated national"
or "blocked person"), the United Nations Security Council ("UNSC"), the European Union, Her Majesty's
Treasury ("HMT") or any other relevant sanctions authority (collectively, "Sanctions"), nor is
the Company, any of its subsidiaries located, organized or resident in a country or territory that is the subject or target of
Sanctions, including, without limitation, Cuba, Iran, North Korea, Sudan and Syria (each, a "Sanctioned Country");
no action of the Company or any of its subsidiaries in connection with (i) the execution, delivery and performance of this Agreement
and the other Transaction Documents, (ii) the issuance and sale of the Securities or (iii) the direct or indirect  use
of proceeds from the Securities or the consummation of any other transaction contemplated hereby or by the other Transaction Documents
or the fulfillment of the terms hereof or thereof, will result in the proceeds of the transactions contemplated hereby and by the
other Transaction Documents being used, or loaned, contributed or otherwise made available, directly or indirectly, to any subsidiary,
joint venture partner or other person or entity, for the purpose of (i) funding or facilitating any activities of or business with
any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) funding or facilitating
any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any Person
(including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. For
the past five years, the Company and its Subsidiaries have not knowingly engaged in and are not now knowingly engaged in any dealings
or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions
or with any Sanctioned Country.

 

    	- 13 -

     

    

 

(r)         Anti-Bribery.  Neither
the Company, nor any of its Subsidiaries or affiliates, nor any director, officer, or to the Company’s knowledge, agent,
employee or other person associated with or acting on behalf of the Company, or any of its Subsidiaries or affiliates, has (i)
used any funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii)
made any direct or indirect unlawful payment to any foreign or domestic government official or employee, to any employee or agent
of a private entity with which the Company does or seeks to do business (a "Private Sector Counterparty") or to
foreign or domestic political parties or campaigns from corporate funds, (iii) violated or is in violation of any provision of
any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions or any applicable provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.K Bribery
Act 2010, or any other similar law of any other jurisdiction in which the Company operates its business, including, in each case,
the rules and regulations thereunder, (iv) taken, is currently taking or will take any action in furtherance of an offer, payment,
gift or anything else of value, directly or indirectly, to any person while knowing that all or some portion of the money or value
will be offered, given or promised to anyone to improperly influence official action, to obtain or retain business or otherwise
to secure any improper advantage or (v) otherwise made any bribe, rebate, payoff, influence payment, unlawful kickback or other
unlawful payment; the Company and each of its respective subsidiaries has instituted and has maintained, and will continue to maintain,
policies and procedures reasonably designed to promote and achieve compliance with the laws referred to in (iii) above and with
this representation and warranty; and none of the Company, nor any of its Subsidiaries or affiliates will directly or indirectly
use the proceeds of the convertible securities or lend, contribute or otherwise make available such proceeds to any subsidiary,
affiliate, joint venture partner or other person or entity for the purpose of financing or facilitating any activity that would
violate the laws and regulations referred to in (iii) above.

 

(s)        Sarbanes-Oxley
Act.  The Company is in compliance in all material respects with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the SEC thereunder that are effective as of the date hereof.

 

(t)        
Transactions With Affiliates.  None of the officers, directors or employees of the Company or any of its Subsidiaries
is presently a party to any transaction with the Company or any of its Subsidiaries (other than for ordinary course services as
employees, officers or directors), including any contract, agreement or other arrangement providing for the furnishing of services
to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer,
director or employee or, to the knowledge of the Company or any of its Subsidiaries, any corporation, partnership, trust or other
entity in which any such officer, director, or employee has a substantial interest or is an officer, director, employee, trustee
or partner.

 

    	- 14 -

     

    

 

(u)        Equity
Capitalization.  As of the date hereof, the authorized capital stock of the Company consists of (i) 150,000,000 shares
of Common Stock, of which as of the date hereof, 12,561,943 shares are issued and outstanding, 1,844,161 shares are reserved for
issuance pursuant to the Company's stock option and purchase plans and 1,221,443 shares are reserved for issuance pursuant to securities
(other than the aforementioned options, the Notes and the Warrants) exercisable or exchangeable for, or convertible into, Common
Stock, (ii) 50,000,000 shares of Class B common stock, par value $0.0001 per share, none of which are issued and outstanding as
of the date hereof, (iii) 50,000,000 shares of preferred stock, par value $0.0001 per share, none of which are issued and outstanding
as of the date hereof and (iii) there are 10,857,067 shares of Common Stock held by non-affiliates of the Company.  All
of such outstanding shares have been validly issued and are fully paid and nonassessable.  Except as disclosed in (i)
Schedule 3(u)(i), none of the Company's capital stock is subject to preemptive rights or any other similar rights or any
liens or encumbrances suffered or permitted by the Company; (ii) Schedule 3(u)(ii), there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible
into, or exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional
shares or capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for,
any shares of capital stock of the Company or any of its Subsidiaries; (iii) Schedule 3(u)(iii), there are no outstanding
debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness
of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound; (iv) Schedule
3(u)(iv),  there are no financing statements securing obligations in any material amounts, either singly or in the
aggregate, filed in connection with the Company or any of its Subsidiaries; (v) Schedule 3(u)(v), there are no agreements
or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities
under the 1933 Act (except pursuant to the Registration Rights Agreement); (vi) Schedule 3(u)(vi), there are no outstanding
securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries; (vii) Schedule 3(u)(vii), there are no securities
or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; (viii)
Schedule 3(u)(viii), neither the Company nor any Subsidiary has any stock appreciation rights or "phantom stock"
plans or agreements or any similar plan or agreement; and (ix) Schedule 3(u)(ix), the Company and its Subsidiaries have
no liabilities or obligations required to be disclosed in the SEC Documents but not so disclosed in the SEC Documents, other than
those incurred in the ordinary course of the Company's or any of its Subsidiary's' respective businesses and which, individually
or in the aggregate, do not or would not have a Material Adverse Effect.  The Company has furnished or made available
to the Buyers true, correct and complete copies of the Company's Articles of Incorporation, as amended and as in effect on the
date hereof (the "Articles of Incorporation"), and the Company's Bylaws, as amended and as in effect on the date
hereof (the "Bylaws"), and the terms of all securities convertible into, or exercisable or exchangeable for shares
of Common Stock and the material rights of the holders thereof in respect thereto.  The form of certificates for the
Conversion Shares and the Warrant Shares, as applicable, will conform to the corporate law of the jurisdiction of the Company's
incorporation.

 

(v)        Indebtedness
and Other Contracts.  Neither the Company nor any of its Subsidiaries (other than Permitted Indebtedness (as defined
in the Notes)) (i) has any outstanding Indebtedness, individually or in the aggregate, in excess of $100,0000, (ii) is a party
to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract,
agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (iii) is in violation of any term
of or in default under any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults
would not result, individually or in the aggregate, in a Material Adverse Effect, or (iv) is a party to any contract, agreement
or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company's officers, has or is expected
to have a Material Adverse Effect.  

 

    	- 15 -

     

    

 

(w)       Absence
of Litigation.  There is no action, suit, proceeding, inquiry or investigation before or by the Principal Market,
any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company's Subsidiaries or any of the
Company's or its Subsidiaries' officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as
such, except as set forth in Schedule 3(w). The matters set forth in Schedule 3(w) would not reasonably be expected
to have a Material Adverse Effect.

 

(x)         Insurance.  The
Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged.  Except as set forth in Schedule 3(x), neither the Company nor any such Subsidiary
has been refused any insurance coverage sought or applied for and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a cost that, individually or in the aggregate, do
not or would not reasonably be expected to have a Material Adverse Effect.

 

(y)        Employee
Relations.  

 

(i)          Neither
the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union.  The
Company and its Subsidiaries believe that their relations with their respective employees are good.  No executive officer
of the Company or any of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the Company or any such Subsidiary
that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer's employment with the
Company or any such Subsidiary.  No executive officer of the Company or any of its Subsidiaries, to the knowledge of
the Company or any of its Subsidiaries, is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement
or any restrictive covenant, 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.

 

(ii)         The
Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor,
employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure
to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

 

    	- 16 -

     

    

 

(z)         Title.  The
Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to
all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and
clear of all liens, encumbrances and defects except for liens for the benefit of the Permitted Senior Lender (as defined in the
Notes) as disclosed in the Annual Report and other Permitted Liens (as defined in the Notes), which, in the case of such other
Permitted Liens do not materially affect the value of such property and do not interfere with the use made and proposed to be made
of such property by the Company or any of its Subsidiaries.  Any real property and facilities held under lease by the
Company and any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its
Subsidiaries.

 

(aa)      Intellectual
Property Rights.  The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications
and registrations therefor ("Intellectual Property Rights") necessary to conduct their respective businesses as
now conducted and as presently proposed to be conducted.  Neither the Company nor any of its Subsidiaries owns any patents.  Except
as set forth in Schedule 3(aa), none of the Company's  or its Subsidiaries' Intellectual Property Rights have
expired or terminated or have been abandoned or are expected to expire or terminate or are expected to be abandoned, within three
years from the date of this Agreement.  The Company does not have any knowledge of any infringement by the Company or
its Subsidiaries of Intellectual Property Rights of others.  There is no claim, action or proceeding being made or brought,
or to the knowledge of the Company or any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries
regarding its Intellectual Property Rights.  Neither the Company nor any of its Subsidiaries is aware of any facts or
circumstances which might give rise to any of the foregoing infringements or claims, actions or proceedings.  The Company
and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their
Intellectual Property Rights.  None of the technology employed by the Company and material to the Company's business
has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the
Company's knowledge, any of its officers, directors or employees or, to the Company's knowledge, otherwise in violation of the
rights of any persons; the Company has not received any written or oral communications alleging that the Company has violated,
infringed or conflicted with, or, by conducting its business as presently proposed to be conducted, would violate, infringe or
conflict with, any of the Intellectual Property Rights of any other person or entity. The Company knows of no material infringement
by others of Intellectual Property Rights owned by or licensed to the Company.

 

(bb)      Environmental
Laws.  The Company and its Subsidiaries (i) are in compliance with any and all Environmental Laws (as hereinafter
defined), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval where,
in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually
or in the aggregate, a Material Adverse Effect.  The term "Environmental Laws" means all federal, state,
local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes
(collectively, "Hazardous Materials") into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes,
decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations
issued, entered, promulgated or approved thereunder.

 

    	- 17 -

     

    

 

(cc)       Subsidiary
Rights.  The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed
by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company
or such Subsidiary.

 

(dd)      Investment
Company Status.  Neither the Company nor any Subsidiary is, and upon consummation of the sale of the Securities,
and for so long any Buyer holds any Securities, will not be, an "investment company," a company controlled by an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment
company" as such terms are defined in the Investment Company Act of 1940, as amended.

 

(ee)       Tax
Status.  Except as set forth in Schedule 3(ee), the Company and each of its Subsidiaries (i) has made or filed
all U.S. federal, state and foreign income and all other 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, except those being contested in good faith and (iii) has set
aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

 

(ff)        Internal
Accounting and Disclosure Controls.  The Company and each of its 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 generally accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or incurrence
of liabilities is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability
for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action
is taken with respect to any difference.  The Company maintains disclosure controls and procedures (as such term is defined
in Rule 13a-15 under the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company in the
reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified
in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the
Company's management, including its principal executive officer or officers and its principal financial officer or officers, as
appropriate, to allow timely decisions regarding required disclosure.  Except as set forth in Schedule 3(ff), neither
the Company nor any of the Subsidiaries has during the twelve (12) months prior to the date hereof (i) received any notice or correspondence
from any accountant relating to any material weakness in any part of the system of internal accounting controls of the Company
or any of its Subsidiaries (ii) become aware of any material weakness in its internal control over financial reporting or change
in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

 

    	- 18 -

     

    

 

(gg)      Off
Balance Sheet Arrangements.  There is no transaction, arrangement, or other relationship between the Company and
an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and
is not so disclosed or that otherwise would be reasonably likely to have a Material Adverse Effect.  

 

(hh)      Ranking
of Notes.  No Indebtedness of the Company or any of its Subsidiaries other than the Permitted Senior Indebtedness
is senior to or ranks pari passu with the Notes in right of payment, whether with respect of payment of redemptions, interest,
damages or upon liquidation or dissolution or otherwise.

 

(ii)         Eligibility
for Registration.  The Company is eligible to use Form S-3 promulgated under the 1933 Act to register shares of Common
Stock for resale.

 

(jj)         Transfer
Taxes.  On the Closing Date, all stamp duties, stock transfer or other taxes (other than income or similar taxes)
which are required to be paid in connection with the sale and transfer of the Securities to be sold to each Buyer hereunder will
be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied
with.

 

(kk)       Manipulation
of Price.  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, or that could reasonably be expected to cause or 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) other than the Placement
Agent, sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) other than
the Placement Agent, paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities
of the Company.

 

(ll)         Acknowledgement
Regarding Buyers' Trading Activity.  Anything in this Agreement or elsewhere herein to the contrary notwithstanding,
it is understood and acknowledged by the Company (i) that none of the Buyers has been asked by the Company or its Subsidiaries
to agree, nor has any Buyer agreed by the Company or its Subsidiaries, 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) that past or future open market or other transactions by any Buyer, including, without limitation,
short sales or "derivative" transactions, before or after the closing of this or future transactions, may negatively
impact the market price of the Company's publicly-traded securities; (iii) that any Buyer, and counter-parties in "derivative"
transactions to which any such Buyer is a party, directly or indirectly, presently may have a "short" position in the
Common Stock, and (iv) each Buyer 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 (a) one or more Buyers
may engage in hedging and/or trading activities at various times during the period that the Securities are outstanding, including,
without limitation, during the periods that the value of the Conversion Shares and/or the Warrant Shares are being determined and
(b) such hedging and/or trading activities, if any, can reduce the value of the existing shareholders' equity interest in the Company
both at and after the time the hedging and/or trading activities are being conducted.  The Company acknowledges that
such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the Notes, the Warrants or
any of the documents executed in connection herewith.

 

    	- 19 -

     

    

 

(mm)     U.S.
Real Property Holding Corporation.  The Company is not, has never been, and so long as any Securities remain outstanding,
shall not become, a U.S. real property holding corporation within the meaning of Section 897 of the Code and the Company shall
so certify upon any Buyer's request.

 

(nn)      Bank
Holding Company Act.  Neither the Company nor any of its Subsidiaries or affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the "BHCA") and to regulation by the Board of Governors of the Federal Reserve
System (the "Federal Reserve").  Neither the Company nor any of its Subsidiaries or affiliates owns
or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five
percent (25%) or more of the total equity of a bank or any  entity that is subject to the BHCA and to regulation by the
Federal Reserve.  Neither the Company nor any of its Subsidiaries or affiliates exercises a controlling influence over
the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

(oo)      No
Additional Agreements.  Neither the Company nor any of its Subsidiaries has any agreement or understanding with any
Buyer with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

(pp)      Disclosure.  The
Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or counsel
with any information that constitutes or could reasonably be expected to constitute material, nonpublic information concerning
the Company or any of its Subsidiaries, other than the existence if the transactions contemplated by this Agreement and the other
Transaction Documents.  The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company.  All disclosure provided to the Buyers regarding the Company,
or any of its Subsidiaries, their businesses and the transactions contemplated hereby, including the disclosure schedules to this
Agreement, furnished by or on behalf of the Company 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 the light of the circumstances
under which they were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the
Company or any of its Subsidiaries to you pursuant to or in connection with this Agreement and the other Transaction Documents,
taken as a whole, will be true and correct in all material respects as of the date on which such information is so provided and
will 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 the light of the circumstances under which they are made, not misleading.  Each press release issued
by the Company or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time
of release 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 the light of the circumstances under which they were made, not misleading.  No
event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which,
under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company
but which has not been so publicly announced or disclosed.  The Company acknowledges and agrees that no Buyer makes or
has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set
forth in Section 2.

 

    	- 20 -

     

    

 

(qq)      Shell
Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) of the 1933 Act.

 

(rr)        Stock
Option Plans.  Except as set forth in Schedule 3(rr), each stock option granted by the Company was granted
(i) in accordance with the terms of the applicable stock option plan of the Company and (ii) with an exercise price at least equal
to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable
law.  No stock option granted under the Company's stock option plan has been backdated.  The Company has not
knowingly granted, and there is no and has been no policy or practice of the Company to knowingly grant, stock options prior to,
or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information
regarding the Company or its Subsidiaries or their financial results or prospects.

 

(ss)       Employee
Benefits.  The Company and each Subsidiary is in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) for which the Company and each Subsidiary would have any material liability; the Company and each
Subsidiary has not incurred and does not expect to incur material liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended
(the "Code"); and each "pension plan" for which the Company or any Subsidiary would have any liability that
is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such qualification.

 

    	- 21 -

     

    

 

(tt)        No
Disagreements with Accountants and Lawyers.  Except as set forth in Schedule 3(tt), there are no material
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.  In
addition, on or prior to the date hereof, the Company had discussions with its accountants about its financial statements previously
filed with the SEC.  Based on those discussions, the Company has no reason to believe that it will need to restate any
such financial statements or any part thereof.

 

(uu)      No
Disqualification Events.  With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b)
under the 1933 Act ("Regulation D Securities"), 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 1933 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 1933 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 Buyers a copy of any disclosures provided thereunder.

 

(vv)      Other
Covered Persons. The Company is not aware of any Person (other than the Placement Agent) that has been or will be paid (directly
or indirectly) remuneration for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation D
Securities.

 

4.        COVENANTS.

 

(a)        Best
Efforts.  Each party shall use its best efforts timely to satisfy each of the covenants and the conditions to be
satisfied by it as provided in Sections 6 and 7 of this Agreement.

 

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

 

    	- 22 -

     

    

 

(c)         Reporting
Status.  Until the date on which the Investors (as defined in the Registration Rights Agreement) shall have sold
all of the Conversion Shares and Warrant Shares and none of the Notes or Warrants are outstanding (the "Reporting
Period"), the Company shall timely file (which includes in reliance on, and after compliance with the deadlines required
by, Rule 12b-25 of the 1934 Act) all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall
not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would no longer require or otherwise permit such termination, and the Company shall take all actions necessary to maintain
its eligibility to register the Conversion Shares and Warrant Shares for resale by the Investors pursuant to the terms of the Registration
Rights Agreement.

 

(d)        Use
of Proceeds. The Company will use the proceeds from the sale of the Securities solely as set forth on Schedule 4(d).

 

(e)        Financial
Information.  The Company agrees to send the following to each Investor during the Reporting Period unless the following
are filed with or furnished to the SEC through EDGAR and are available to the public through the EDGAR system (i) within one (1)
Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, any Quarterly Reports on Form 10-Q,
any Current Reports on Form 8-K (or any analogous reports under the 1934 Act) and any registration statements (other than on Form
S-8) or amendments filed pursuant to the 1933 Act, (ii) on the same day as the release thereof, facsimile or e-mailed copies of
all press releases issued by the Company or any of its Subsidiaries, and (iii) copies of any notices and other information made
available or given to the shareholders of the Company generally, contemporaneously with the making available or giving thereof
to the shareholders.  As used herein, "Business Day" means any day other than Saturday, Sunday or other
day on which commercial banks in The City of New York are authorized or required by law to remain closed.

 

(f)         Listing.  The
Company shall promptly secure the listing of all of the Registrable Securities upon the Principal Market or on the Eligible Market
(as defined in the Warrants) on which the Common Stock is then listed or quoted (subject to official notice of issuance) and shall
maintain such listing of all Registrable Securities from time to time issuable under the terms of the Transaction Documents  on
the Principal Market or any other Eligible Market on which the Common Stock is then listed or quoted.  The Company shall
maintain the authorization for quotation of the Common Stock on the Principal Market, or if such authorization is not able to be
maintained, on another Eligible Market (as defined in the Warrants).  Neither the Company nor any of its Subsidiaries
shall take any action which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal
Market or on the Eligible Market on which the Common Stock is then listed or quoted.  The Company shall pay all fees
and expenses in connection with satisfying its obligations under this Section 4(f).

 

    	- 23 -

     

    

 

(g)        Fees.  The
Company shall reimburse Hudson Bay (a Buyer) or its designee(s) (in addition to any other expense amounts paid to any Buyer or
its counsel prior to the date of this Agreement) for all costs and expenses incurred in connection with the transactions contemplated
by the Transaction Documents (including all legal fees and disbursements in connection therewith, documentation and implementation
of the transactions contemplated by the Transaction Documents and due diligence in connection therewith), which amount, at the
option of such Buyer, may be withheld by such Buyer from its purchase price for any Notes purchased at the Closing to the extent
not previously reimbursed by the Company.  The Company shall be responsible for the payment of any placement agent's
fees, financial advisory fees, or broker's commissions (other than for Persons engaged by any Buyer) relating to or arising out
of the transactions contemplated hereby, including, without limitation, any fees or commissions payable to the Placement Agent
and all fees payable to the Bank in connection with the Master Control Account Agreement.  The Company shall pay, and
hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorney's fees and
out-of-pocket expenses) arising in connection with any claim relating to any such payment.  Except as otherwise set forth
in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Securities
to the Buyers.

 

(h)        Pledge
of Securities.  The Company acknowledges and agrees that the Securities may be pledged by an Investor in connection
with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities.  The pledge
of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a
pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company
pursuant to this Agreement or any other Transaction Document, including, without limitation, Section 2(f) hereof; provided
that an Investor and its pledgee shall be required to comply with the provisions of Section 2(f) hereof in order to effect a sale,
transfer or assignment of Securities to such pledgee.  The Company hereby agrees to execute and deliver such documentation
as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by an Investor.

 

    	- 24 -

     

    

 

(i)          Disclosure
of Transactions and Other Material Information.  On or before 5:00 p.m., New York City time, on the date this Agreement
has been executed, the Company shall file a Current Report on Form 8-K, in a form reasonably acceptable to the Buyers, describing
the terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching the
material Transaction Documents (including, without limitation, this Agreement (and all schedules and exhibits to this Agreement),
the form of the Note, the form of the Warrant, the Registration Rights Agreement, the form of Voting Agreement and the form of
the Master Control Account Agreement as exhibits to such filing (including all attachments), the "8-K Filing").  From
and after the filing of the 8-K Filing with the SEC, no Buyer shall be in possession of any material, nonpublic information received
from the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents, that
is not disclosed in the 8-K Filing.  In addition, effective upon the filing of the 8-K Filing, the Company acknowledges
and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company,
any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents, on the one hand, and any
of the Buyers or any of their affiliates, on the other hand, shall terminate and be of no force or effect.  The Company
understands and confirms that each of the Buyers will rely on the foregoing in effecting transactions in securities of the Company.  The
Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees,
affiliates and agents, not to, provide any Buyer with any material, nonpublic information regarding the Company or any of its Subsidiaries
from and after the date hereof without the express prior written consent of such Buyer (provided that the Company
shall not be in breach of the terms of the Notes, the Warrants or this Agreement if such material, nonpublic information is not
provided to the Buyer because no such prior written consent is provided to the Company).  If a Buyer has, or believes
it has, received any such material, nonpublic information regarding the Company or any of its Subsidiaries from the Company, any
of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, other than in compliance with
the terms of the Notes, the Warrants and this Agreement, it may provide the Company with written notice thereof.  The
Company shall, within two (2) Trading Days (as defined in the Warrants) of receipt of such notice, make public disclosure of such
material, nonpublic information.  In the event of a breach of the foregoing covenant by the Company, any of its Subsidiaries,
or any of its or their respective officers, directors, affiliates, employees and agents, in addition to any other remedy provided
herein or in the Transaction Documents, a Buyer shall have the right to make a public disclosure, in the form of a press release,
public advertisement or otherwise, of such material, nonpublic information without the prior approval by the Company, its Subsidiaries,
or any of its or their respective officers, directors, affiliates, employees or agents.  No Buyer shall have any liability
to the Company, its Subsidiaries, or any of its or their respective officers, directors, affiliates, employees, shareholders or
agents for any such disclosure.  To the extent that the Company, its affiliates or any of its or their respective officers,
directors, employees, affiliates or agents, delivers any material, non-public information to a Buyer without such Buyer's consent,
the Company hereby covenants and agrees that such Buyer shall not have any duty of confidentiality to the Company, any of its Subsidiaries
or any of their respective officers, directors, employees, affiliates or agent with respect to, or a duty to the Company, any of
its Subsidiaries or any of their respective officers, directors, employees, affiliates or agent or not to trade on the basis of,
such material, non-public information.  Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer
shall issue any press releases or any other public statements with respect to the transactions contemplated by the Transaction
Documents; provided, however, that the Company shall be entitled, without the prior approval of any Buyer, to make any press release
or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously
therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be
consulted by the Company in connection with any such press release or other public disclosure prior to its release).  Except
for the Registration Statement required to be filed pursuant to the Registration Rights Agreement and with respect to the 8-K Filing,
without the prior written consent of any applicable Buyer, neither the Company nor any of its Subsidiaries or affiliates shall
disclose the name of such Buyer in any filing, announcement, release or otherwise.

 

(j)          Additional
Notes; Variable Securities.  So long as any Buyer beneficially owns any Securities, the Company will not issue any
Notes other than to the Buyers as contemplated hereby and the Company shall not issue any other securities that would cause a breach
or default under the Notes.  Until the earlier to occur of (i) the second anniversary of the Closing Date and (ii) the
date on which the aggregate principal amount outstanding under all Notes is less than four million dollars ($4,000,000),
the Company shall not, in any manner, issue or sell any rights, warrants or options to subscribe for or purchase Common Stock or
directly or indirectly convertible into or exchangeable or exercisable for Common Stock at a price which varies or may vary with
the market price of the Common Stock, including by way of one or more reset(s) to any fixed price unless the conversion, exchange
or exercise price of any such security cannot be less than the then applicable Conversion Price (as defined in the Notes) with
respect to the Common Stock into which any Note is convertible or the then applicable Exercise Price (as defined in the Warrants)
with respect to the Common Stock into which any Warrant is exercisable.  Notwithstanding the foregoing, the Company may
issue shares of Common Stock upon conversion of Options and Convertible Securities which are outstanding on the day immediately
preceding the date hereof; provided, that the terms of such Options or Convertible Securities are not amended, modified
or changed on or after the date hereof without the prior written consent of the Required Holders; provided, further, that
the Company shall be permitted to effect an Option repricing with respect to employee options under its existing Long Term Incentive
Plan as in effect on the date hereof.

 

    	- 25 -

     

    

 

(k)         Corporate
Existence.  So long as any Buyer beneficially owns any Securities, the Company shall (i) maintain its corporate existence
and (ii) not be party to any Fundamental Transaction (as defined in the Notes) unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Notes and the Warrants.

 

(l)          Reservation
of Shares.  So long as any Buyer owns any Securities, the Company shall take all action necessary to at all times
have authorized, and reserved for the purpose of issuance, no less than the Initial Required Reserve Amount or such additional
number of shares of Common Stock as shall from time to time be necessary to effect the conversion of all of the Notes determined
based on the Equity Conditions Conversion Price as of the applicable date of determination and the exercise of all of the Warrants
then outstanding (in each case, without regard to any limitations on conversions or exercises) (the "Required Reserve Amount").  If
at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to meet the Required Reserved
Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including,
without limitation, calling a special meeting of shareholders to authorize additional shares to meet the Company's obligations
under Section 3(c), in the case of an insufficient number of authorized shares, obtain shareholder approval of an increase in such
authorized number of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of
the Company to ensure that the number of authorized shares is sufficient to meet the Required Reserved Amount.  Upon
any increase in the number of authorized or unreserved shares of Common Stock of the Company following the date hereof, the Company
shall use such increased number of authorized shares to satisfy its obligations to keep the Required Reserve Amount of shares reserved
for the Securities before reserving or using shares for any other purpose. The initial number of shares of Common Stock reserved
for conversion of the Notes and exercise of the Warrants and each increase in the number of shares so reserved shall be allocated
pro rata among the Buyers, based on the number of shares of Common Stock issuable upon conversion of the Notes and exercise of
the Warrants (without regard to any limitations on the conversion of the Notes and exercise of the Warrants) issued to each Buyer
on the Closing Date (the "Authorized Share Allocation").  In the event that a Buyer shall sell or otherwise
transfer any of its Notes or Warrants, each transferee shall be allocated a pro rata portion of such holder's Authorized Share
Allocation.  Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Notes and Warrants
shall be allocated to the holders of the remaining Notes and Warrants, pro rata based on the shares of Common Stock issuable upon
conversion of the Notes and exercise of the Warrants then held by such holders (without regard to any limitations on the conversion
of the Notes and exercise of the Warrants).  

 

    	- 26 -

     

    

 

(m)        Conduct
of Business.  The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance
or regulation of any governmental entity, except where such violations would not result, either individually or in the aggregate,
in a Material Adverse Effect.

 

(n)         Additional
Issuances of Securities.  

 

(i)          For
purposes of this Section 4(n), the following definitions shall apply.

 

(1)           "Approved
Stock Plan" means any employee benefit plan which has been approved by the Board of Directors of the Company, pursuant
to which the Company's securities may be issued to any employee, officer, director or consultant for services provided to the Company.

 

(2)           "Convertible
Securities" means any stock or securities (other than Options) convertible into or exercisable or exchangeable for shares
of Common Stock.

 

(3)           "Common
Stock Equivalents" means, collectively, Options and Convertible Securities.

 

(4)           "Excluded
Securities" means any Company security issued or issuable: (i) in connection with any Approved Stock Plan, provided,
however, that no more than an aggregate of 150,000 (as adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction after the date hereof) shares of Common Stock are issued or issuable to consultants hereunder
as Excluded Securities, (ii) upon exercise of any Warrants and the warrants issued to the Placement Agent by the Company as compensation
for the transactions contemplated hereby (the "Agent Warrants"); provided, that the terms of such Warrants
and Agent Warrants are not amended, modified or changed on or after the date hereof without the prior written consent of the Required
Holders, (iii) upon conversion or exercise of any Options or Convertible Securities which are outstanding on the day immediately
preceding the date hereof; provided, that the terms of such Options or Convertible Securities are not amended, modified
or changed on or after the date hereof; (iv) to vendors or consultants for services rendered to the Company; provided, however,
that no more than an aggregate of 150,000 (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction after the date hereof) shares of Common Stock are issued or issuable to vendors or consultants hereunder
as Excluded Securities; (v) to the Permitted Senior Lender under the Permitted Senior Loan Agreement provided, however,
that no more than an aggregate of 100,000 (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction after the date hereof) shares of Common Stock are issued or issuable to the Permitted Senior Lender hereunder
as Excluded Securities; and (vi) to holders of the Company’s Series A, Series B and Series C warrants issued in the Company’s
February 2015 in exchange for such warrants on substantially the same terms as the exchange consummated by the Company on June
30, 2015.

 

    	- 27 -

     

    

 

(5)           "Options"
means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

 

(ii)         The
Company shall not, until the sixtieth (60th) day following the earlier of (x) the date that one or more Registration Statement(s)
covering the resale of all Registrable Securities has become effective and available for the resale of all such Registrable Securities
and (y) the date all the Conversion Shares and Warrant Shares are eligible for sale without restriction or limitation pursuant
to Rule 144 promulgated under the 1933 Act if the Company is in compliance with the requirements of Rule 144(c)(1) at such time;
provided, however, that if the Company ceases to be in compliance with the requirements of Rule 144(c)(1) at a time such requirements
are necessary for the Buyers to rely on Rule 144 and the Trigger Date has been determined pursuant to this clause (y), the restrictions
under this Section 4(n)(ii) shall again apply as if clause (y) had never been satisfied and shall continue to apply until the earlier
to occur of clause (x) and clause (y)(the "Trigger Date") (x) directly or indirectly, offer, sell, grant any option to
purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of
its or its Subsidiaries' equity or equity equivalent securities, including without limitation any debt, preferred stock or other
instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable
for shares of Common Stock or Common Stock Equivalents (any such offer, sale, grant, disposition or announcement being referred
to as a "Subsequent Placement") or be party to any solicitations, negotiations or discussions with regard to foregoing
or (y) grant any registration rights to any Person that can be exercised prior to such date other than registration rights included
in agreements disclosed in the SEC Documents provided that the terms of such agreements are not amended, modified or changed on
or after the date hereof without the prior written consent of the Required Holders.

 

(iii)        In
addition to the foregoing, until the two (2) year anniversary of the Closing Date, the Company shall not, without the prior written
consent of the Required Holders, directly or indirectly, issue any of its or its Subsidiaries' securities in respect of, including,
without limitation, as an amendment to or in exchange for, any existing Indebtedness or existing securities, including, without
limitation, any warrants, Options or Convertible Securities, of the Company without obtaining the prior written consent of the
Required Holders.  Notwithstanding the foregoing, the Company may issue shares of Common Stock upon conversion of Options
and Convertible Securities which are outstanding on the day immediately preceding the date hereof; provided that the terms of such
Options or Convertible Securities are not amended, modified or changed on or after the date hereof without the prior written consent
of the Required Holders; provided, further, that the Company shall be permitted to effect an Option repricing with respect to employee
options under any Approved Stock Plan as in effect on the date hereof and an exchange of the Series A, Series B and Series C warrants
issued in the Company’s February 2015 public offering for shares of Common Stock on substantially the same terms as the exchange
consummated by the Company on June 30, 2015.

 

    	- 28 -

     

    

 

(iv)        From
the Trigger Date until December 31, 2017, the Company will not, directly or indirectly, effect any Subsequent Placement unless
the Company shall have first complied with this Section 4(n)(iv).

 

(1)         The
Company shall deliver to each Buyer an irrevocable written notice to the contact information as is set forth opposite such Buyer’s
name in column (2) of the Schedule of Buyers attached hereto (the "Offer Notice") of any proposed or intended
issuance or sale or exchange (the "Offer") of the securities being offered (the "Offered Securities")
in a Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price
and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued,
sold or exchanged, (y) identify the persons or entities (if known) to which or with which the Offered Securities are to be
offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with such Buyers at least fifty percent (50%)
of the Offered Securities, allocated among such Buyers (a) based on such Buyer's pro rata portion of the aggregate principal amount
of Notes purchased hereunder (the "Basic Amount"), and (b) with respect to each Buyer that elects to purchase
its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers as such Buyer
shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the "Undersubscription
Amount"), which process shall be repeated until the Buyers shall have an opportunity to subscribe for any remaining Undersubscription
Amount.

 

(2)         To
accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the tenth (10th)
Business Day after such Buyer's receipt of the Offer Notice (the "Offer Period"), setting forth the portion of
such Buyer's Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the "Notice of Acceptance").  If
the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has set
forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed
for, the Undersubscription Amount it has subscribed for; provided, however, that if the Undersubscription Amounts
subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the "Available
Undersubscription Amount"), each Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total Basic Amounts
of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent its deems reasonably
necessary.  Notwithstanding anything to the contrary contained herein, if the Company desires to modify or amend the
terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to the Buyers a new Offer
Notice and the Offer Period shall expire on the tenth (10th) Business Day after such Buyer's receipt of such new Offer Notice.

 

    	- 29 -

     

    

 

(3)         The
Company shall have five (5) Business Days from the expiration of the Offer Period above to offer, issue, sell or exchange all or
any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Buyers (the "Refused Securities")
pursuant to a definitive agreement (the "Subsequent Placement Agreement") but only to the offerees described in
the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest
rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in
the Offer Notice and (ii) to publicly announce (a) the execution of such Subsequent Placement Agreement, and (b) either (x) the
consummation of the transactions contemplated by such Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement, which, if required to ensure that the Buyers will not be in possession of material, non public information
regarding the Company or any of its Subsidiaries, shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent
Placement Agreement and any documents contemplated therein filed as exhibits thereto.

 

(4)         In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 4(n)(iv)(3) above), then each Buyer may, at its sole option and in its sole discretion, reduce the number
or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or
amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(n)(iv)(2) above multiplied by a fraction,
(i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or
exchange (including Offered Securities to be issued or sold to Buyers pursuant to Section 4(n)(iv)(3) above prior to such reduction)
and (ii) the denominator of which shall be the original amount of the Offered Securities.  In the event that any Buyer
so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue,
sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been
offered to the Buyers in accordance with Section 4(n)(iv)(1) above.

 

(5)         Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Buyers shall acquire from
the Company, and the Company shall issue to the Buyers, the number or amount of Offered Securities specified in the Notices of
Acceptance, as reduced pursuant to Section 4(n)(iv)(4) above if the Buyers have so elected, upon the terms and conditions specified
in the Offer.  The purchase by the Buyers of any Offered Securities is subject in all cases to the preparation, execution
and delivery by the Company and the Buyers of a purchase agreement relating to such Offered Securities on the same principal business
terms provided to other purchasers of the Offered Securities with modifications to such form purchase agreement reasonably requested
by the Buyers and their respective counsel to accommodate the Buyers' particular circumstances.

 

(6)         Any
Offered Securities not acquired by the Buyers or other persons in accordance with Section 4(n)(iv)(3) above may not be issued,
sold or exchanged until they are again offered to the Buyers under the procedures specified in this Agreement.

 

(7)         The
Company and the Buyers agree that if any Buyer elects to participate in the Offer, (x) neither the Subsequent Placement Agreement
with respect to such Offer nor any other transaction documents related thereto (collectively, the "Subsequent Placement
Documents") shall include any term or provisions whereby any Buyer shall be required to agree to any restrictions in trading
as to any securities of the Company owned by such Buyer prior to such Subsequent Placement, and (y) the Buyers shall be entitled
to the same registration rights provided to the other investors in the such Subsequent Placement Documents.

 

    	- 30 -

     

    

 

(8)         Notwithstanding
anything to the contrary in this Section 4(n) and unless otherwise agreed to by the Buyers, the Company shall either confirm in
writing to the Buyers that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case in such a manner such that the Buyers will not be in possession of
material, non-public information regarding the Company or any of its Subsidiaries, by the fifteenth (15th) Business
Day following delivery of the Offer Notice.  If by the fifteenth (15th) Business Day following delivery of
the Offer Notice no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice
regarding the abandonment of such transaction has been received by the Buyers, such transaction shall be deemed to have been abandoned
and the Buyers shall not be deemed to be in possession of any material, non-public information with respect to the Company.  Should
the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide each Buyer with
another Offer Notice and each Buyer will again have the right of participation set forth in this Section 4(n)(iv).  The
Company shall not be permitted to deliver more than one such Offer Notice to the Buyers in any 30 day period.

 

(v)        The
restrictions contained in this Section 4(n) shall not apply in connection with the issuance of any Excluded Securities.  

 

(vi)       Solely
in connection with the issuance of the Securities pursuant to this Agreement, each Buyer hereby waives any notice requirement set
forth in Section 4(o)(iii) of the Securities Purchase Agreements dated as of February 23, 2015, and June 26, 2015, by and among
the Company and the investors listed on the signature pages attached thereto to the extent such Buyer is a party thereto.

 

(o)        Public
Information.  At any time during the period commencing from the six (6) month anniversary of the Closing Date and
ending at such time that all of the Securities, if a registration statement is not available for the resale of all of the Securities,
may be sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1),
if the Company shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1) (other than with respect to such failure
during the grace periods provided by Rule 12b-25 promulgated under the 1934 Act), including, without limitation, the failure to
satisfy the current public information requirement under Rule 144(c) or (ii) if the Company has ever been an issuer described in
Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule
144(i)(2) (a "Public Information Failure") then, as partial relief for the damages to any holder of Securities
by reason of any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each such holder an amount in cash equal to one percent (1.0%)
of the aggregate Purchase Price of such holder's Securities on the day of a Public Information Failure and on every thirtieth day
(pro rated for periods totaling less than thirty days) thereafter until the earlier of (i) the date such Public Information Failure
is cured and (ii) such time that such Public Information Failure no longer prevents a holder of Securities from selling such Securities
pursuant to Rule 144 without any restrictions or limitations.  The payments to which a holder shall be entitled pursuant
to this Section 4(o) 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 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.

 

    	- 31 -

     

    

 

(p)        Shareholder
Approval.  The Company shall provide each shareholder entitled to vote at the next special or annual meeting of shareholders
of the Company (the "Shareholder Meeting"), which shall be promptly called and held not later than seventy-five
(75) calendar days after the Closing Date (the "Shareholder Meeting Deadline"), a proxy statement, substantially
in the form which has been previously reviewed by the Buyers and Schulte Roth & Zabel LLP, at the expense of the Company, soliciting
each such shareholder's affirmative vote at the Shareholder Meeting for approval of resolutions providing for the Company's issuance
of all of the Securities as described in the Transaction Documents in accordance with applicable law and the rules and regulations
of the Principal Market without giving effect to the Exchange Cap provisions set forth in the Notes and without giving effect to
the Exercise Floor Price as set forth in the Warrants 1 (such affirmative approvals being referred to herein as the "Shareholder
Approval"), and the Company shall use its reasonable best efforts to solicit its shareholders' approval of such resolutions
and to cause the Board of Directors of the Company to recommend to the shareholders that they approve such resolutions.  The
Company shall be obligated to use its reasonable best efforts to obtain the Shareholder Approval by the Shareholder Meeting Deadline.  If,
despite the Company's reasonable best efforts the Shareholder Approval is not obtained on or prior to the Shareholder Meeting Deadline,
the Company shall cause an additional Shareholder Meeting to be held every three (3) months thereafter until such Shareholder Approval
is obtained or the Notes are no longer outstanding.

 

(q)        Notice
of Disqualification Events. The Company will notify the Buyers 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.

 

(r)         FAST
Compliance.  While any Notes or Warrants are outstanding, the Company shall maintain a transfer agent that participates
in the DTC Fast Automated Securities Transfer Program. 

 

(s)        Voting
Agreement.  The Company shall use its best efforts to effectuate the transactions contemplated by the Voting Agreement,
substantially in the form attached hereto as Exhibit E (the "Voting Agreement"), executed by the Company
and Riverside Renewable Energy Investments, LLC (the "Principal Shareholder").  The Company shall not
amend or waive any provision of the Voting Agreement and shall enforce the provisions of the Voting Agreement in accordance with
its terms. If the Principal Shareholder breaches any provisions of the Voting Agreement, the Company shall promptly use its best
efforts to seek specific performance of the terms of the Voting Agreement in accordance with Section 4.02 thereof.  In
addition, if the Company receives any notice from the Principal Shareholder pursuant to the Voting Agreement, the Company shall
promptly, but in no event later than two (2) Business Days, deliver a copy of such notice to each Buyer.

 

    	- 32 -

     

    

 

(t)         Closing
Documents.  On or prior to twenty-five (25) calendar days after the Closing Date, the Company agrees to deliver,
or cause to be delivered, to each Buyer and Schulte Roth & Zabel LLP a complete closing set of the executed Transaction Documents,
Securities and any other documents required to be delivered to any party pursuant to Section 7 hereof or otherwise.  

 

5.              REGISTER;
TRANSFER AGENT INSTRUCTIONS.

 

(a)        Register.  The
Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by
notice to each holder of Securities), a register for the Notes and the Warrants in which the Company shall record the name and
address of the Person in whose name the Notes and the Warrants have been issued (including the name and address of each
transferee), the principal amount of Notes held by such Person, the number of Conversion Shares issuable pursuant to the terms
of the Notes and the number of Warrant Shares issuable upon exercise of the Warrants held by such Person.  The Company
shall keep the register open and available at all times during business hours for inspection of any Buyer or its legal representatives.

 

(b)          Transfer
Agent Instructions.  The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer
agent, in the form of Exhibit F attached hereto (the "Irrevocable Transfer Agent Instructions") to issue
certificates or credit shares to the applicable balance accounts at DTC, registered in the name of each Buyer or its respective
nominee(s), for the Conversion Shares and the Warrant Shares issued at the Closing or pursuant to the terms of the Notes or exercise
of the Warrants in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes or exercise
of the Warrants.  The Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred
to in this Section 5(b), and stop transfer instructions to give effect to Section 2(f) hereof, will be given by the Company to
its transfer agent, and that the Securities shall otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement and the other Transaction Documents.  If a Buyer effects a sale, assignment
or transfer of the Securities in accordance with Section 2(f), the Company shall permit the transfer and shall promptly instruct
its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and
in such denominations as specified by such Buyer to effect such sale, transfer or assignment.  In the event that such
sale, assignment or transfer involves the Conversion Shares or the Warrant Shares sold, assigned or transferred pursuant to an
effective registration statement or pursuant to Rule 144, the transfer agent shall issue such Securities to the Buyer, assignee
or transferee, as the case may be, without any restrictive legend.  The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to a Buyer.  Accordingly, the Company acknowledges that the remedy
at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition to all other available
remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity
of showing economic loss and without any bond or other security being required.

 

    	- 33 -

     

    

 

6.             CONDITIONS
TO THE COMPANY'S OBLIGATION TO SELL.

 

The obligation of the Company
hereunder to issue, sell and deliver the Notes and the related Warrants to each Buyer at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:

 

(i)          Such
Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.

 

(ii)         Such
Buyer shall have delivered for the Notes and the related Warrants being purchased by such Buyer at the Closing: (1) 7.5% of its
Purchase Price to the Company (less, in the case of Hudson Bay, the amounts withheld pursuant to Section 4(g)), by wire transfer
of immediately available funds pursuant to the wire instructions provided by the Company and (2) 92.5% of the Purchase Price to
such Buyer's Master Restricted Account by wire transfer of immediately available funds pursuant to the wire instructions set forth
in such Buyer's Master Control Account Agreement, such portion of portion of such Buyer's Purchase Price to be held and released
by the Bank in accordance with and pursuant to the terms and conditions of such Buyer's Master Control Account Agreement.

 

(iii)        The
representations and warranties of such Buyer shall be true and correct in all material respects (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as
of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak
as of a specific date which shall be true and correct in all material respects (except for those representations and warranties
that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of such specified
date), and such Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Closing Date.

 

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

 

(v)         The
Company shall have received any necessary approvals from the Principal Market.  

 

    	- 34 -

     

    

 

7.             CONDITIONS
TO EACH BUYER'S OBLIGATION TO PURCHASE.

 

The obligation of each Buyer
hereunder to purchase the Notes and the related Warrants at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these conditions are for each Buyer's sole benefit and may be
waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:

 

(i)          The
Company and each of its Subsidiaries shall have duly executed and delivered to such Buyer each of the following documents to which
it is a party: (A) each of the Transaction Documents, (B) the Notes (allocated in such principal amounts as such Buyer shall request),
being purchased by such Buyer at the Closing pursuant to this Agreement and (C) the related Warrants (allocated in such amounts
as such Buyer shall request) being purchased by such Buyer at the Closing pursuant to this Agreement.

 

(ii)         Such
Buyer shall have received the opinion of Brownstein Hyatt Farber Schreck, LLP, the Company's outside counsel, dated as of the Closing
Date, in substantially the form of Exhibit G attached hereto.

 

(iii)        The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form of Exhibit F
attached hereto, which instructions shall have been delivered to and acknowledged in writing by the Company's transfer agent.

 

(iv)        The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each of
its Significant Subsidiaries in such entity's jurisdiction of formation issued by the Secretary of State (or comparable office)
of such jurisdiction, as of a date within ten (10) days before the Closing Date.

 

(v)         The
Company shall have delivered to such Buyer a certificate evidencing the Company's qualification as a foreign corporation and good
standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business, as
of a date within ten (10) days before the Closing Date.

 

(vi)        The
Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Closing
Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company's Board of Directors in a form reasonably
acceptable to such Buyer, (ii) the Articles of Incorporation of the Company and (iii) the Bylaws of the Company, each as in effect
at the Closing, in the form attached hereto as Exhibit H.

 

(vii)       The
representations and warranties of the Company shall be true and correct in all material respects (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as
of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak
as of a specific date which shall be true and correct in all material respects (except for those representations and warranties
that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of such specified
date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and
conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the
Closing Date.  Such Buyer shall have received a certificate, executed by the Chief Executive Officer of the Company,
dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer
in the form attached hereto as Exhibit I.

 

    	- 35 -

     

    

 

(viii)      The
Company shall have delivered to such Buyer a letter from the Company's transfer agent certifying the number of shares of Common
Stock outstanding as of a date within five (5) days before the Closing Date.

 

(ix)        The Common Stock (I) shall be designated for quotation or listed on the Principal Market and (II) shall not have been suspended,
as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC
or the Principal Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal Market
or (B) by falling below the minimum listing maintenance requirements of the Principal Market, other than as disclosed in the Company's
Form 8-K filed on December 24, 2015.  

 

(x)         The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities and the transactions contemplated by the Transaction Documents and all payments thereunder.

 

(xi)        The
Company shall have delivered to each Buyer such Buyer's Master Control Account Agreement, duly executed by all parties thereto
and declared effective by the Bank.

 

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

 

(xiii)      The
Company shall have delivered to such Buyer such other documents relating to the transactions contemplated by this Agreement as
such Buyer or its counsel may reasonably request.

 

(xiv)      The
Voting Agreement shall have been executed and delivered to such Buyer by the Company and the Principal Shareholder.

 

(xv)       The
Company shall have received any necessary approvals from the Principal Market.  

 

    	- 36 -

     

    

 

8.             TERMINATION.  In
the event that the Closing shall not have occurred with respect to a Buyer on or before five (5) Business Days from the date hereof
due to the Company's or such Buyer's failure to satisfy the conditions set forth in Sections 6 and 7 above (and the nonbreaching
party's failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate this Agreement
with respect to such breaching party at the close of business on such date by delivering a written notice to that effect to each
other party to this Agreement and without liability of any party to any other party; provided, however, that if this
Agreement is terminated pursuant to this Section 8, the Company shall remain obligated to reimburse Hudson Bay or its designee(s),
as applicable, for the expenses described in Section 4(g) above.

 

9.             MISCELLANEOUS.

 

(a)       Governing
Law; Jurisdiction; Jury Trial.  All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State 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, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action
or proceeding is improper.  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 to such party at the address for such 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 manner permitted by law.  EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(b)       Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile
or .pdf signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect
as if the signature were an original, not a facsimile or .pdf signature.

 

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

 

    	- 37 -

     

    

 

(d)       Severability.  If
any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.  The
parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid
provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

(e)       Entire
Agreement; Amendments.  This Agreement and the other Transaction Documents supersede all other prior oral or written
agreements between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed
herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire
understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such
matters.  Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the written consent of the Company and the holders
of at least fifty-five (55%) of the aggregate number of Registrable Securities issued or issuable under the Notes and Warrants
(without regard to any restriction or limitation on the conversion of the Notes or exercise
of the Warrants contained therein) and shall include Hudson Bay so long as Hudson Bay or any of its affiliates holds at
least five percent (5%) of Registrable Securities (the "Required Holders").  Any amendment or waiver
effected in accordance with this Section 9(e) shall be binding upon each Buyer and holder of Securities and the Company.  No
such amendment shall be effective to the extent that it applies to less than all of the Buyers or holders of Securities.  No
consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of
the Transaction Documents unless the same consideration (other than the reimbursement of legal fees) also is offered to all of
the parties to the Transaction Documents, holders of Notes or holders of the Warrants, as the case may be.  The Company
has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated
by the Transaction Documents except as set forth in the Transaction Documents.  Without limiting the foregoing, the Company
confirms that, except as set forth in this Agreement, no Buyer has made any commitment or promise or has any other obligation to
provide any financing to the Company or otherwise.

 

(f)        Notices.  Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally; (ii) upon receipt,
when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the
sending party) or by electronic mail; or (iii) one Business Day after deposit with an overnight courier service, in each case properly
addressed to the party to receive the same.  The addresses, facsimile numbers and e-mail addresses for such communications
shall be:

 

    	- 38 -

     

    

 

If to the Company:

 

Real Goods Solar, Inc.

833 West South Boulder Road,

Louisville, CO 80027

		Telephone:	(303) 222-8541

		Facsimile:	1-877-835-4834

		E-mail:	Dennis.Lacey@rgsenergy.com

		Attention:	Dennis Lacey

 

With a copy (for informational purposes only) to:

 

Brownstein Hyatt Farber Schreck, LLP

410 Seventeenth Street, Suite 2200

Denver, CO 80202

		Telephone:	(303) 223-1100

		Facsimile:	(303) 223-1111

		E-mail:	KMacdonald@BHFS.com

		Attention:	Kristin M. Macdonald

		E-mail:	RLundberg@BHFS.com

		Attention:	Rikard Lundberg

 

If to the Transfer Agent:

 

Computershare Trust Company, N.A.

8742 Lucent Blvd. Suite 225

Highlands Ranch CO 80129

Telephone: (303) 262-0684

Facsimile: (303) 226-0609

Attention: Brenda Baril

 

If to a Buyer, to its address, facsimile
number and e-mail address set forth on the Schedule of Buyers, with copies to such Buyer's representatives as set forth on the
Schedule of Buyers,

 

with a copy (for informational purposes only) to:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York  10022

		Telephone:	(212) 756-2000

		Facsimile:	(212) 593-5955

		Attention:	Eleazer N. Klein, Esq.

		E-mail:	eleazer.klein@srz.com

 

    	- 39 -

     

    

 

or to such other address, facsimile number
and/or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change.  Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's
facsimile machine or e-mail containing the time, date, recipient facsimile number and an image of the first page of such transmission
or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt
from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

 

(g)       Successors
and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of the Notes or the Warrants.  The Company shall not assign this Agreement or any
rights or obligations hereunder without the prior written consent of the Required Holders, including by way of a Fundamental Transaction
(unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes and
the Warrants).  A Buyer may assign some or all of its rights hereunder without the consent of the Company, in which event
such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.

 

(h)       No
Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person,
except that each Indemnitee shall have the right to enforce the obligations of the Company with respect to Section 9(k).

 

(i)        Survival.  Unless
this Agreement is terminated under Section 8, the representations and warranties of the Company and the Buyers contained in Sections
2 and 3, and the agreements and covenants set forth in Sections 4, 5 and 9 shall survive the Closing.  Each Buyer shall
be responsible only for its own representations, warranties, agreements and covenants hereunder.

 

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

 

    	- 40 -

     

    

 

(k)       Indemnification.  In
consideration of each Buyer's execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in
addition to all of the Company's other obligations under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless each Buyer and each other holder of the Securities and all of their shareholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons' agents or other representatives (including,
without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the "Indemnitees")
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys' fees and disbursements (the "Indemnified Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation
or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby
or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any
other certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made
against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and
arising out of or resulting from (i) the execution, delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or
in part, directly or indirectly, with the proceeds of the issuance of the Securities, (iii) any disclosure made by such Buyer pursuant
to Section 4(i), or (iv) the status of such Buyer or holder of the Securities as an investor in the Company pursuant to the transactions
contemplated by the Transaction Documents.  To the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities
that is permissible under applicable law.  Except as otherwise set forth herein,
the mechanics and procedures with respect to the rights and obligations under this Section 9(k) shall be the same as those set
forth in Section 6 of the Registration Rights Agreement.

 

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

 

(m)       Remedies.  Each
Buyer and each holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all rights
and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which
such holders have under any law.  Any Person having any rights under any provision of this Agreement shall be entitled
to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.  Furthermore, the Company recognizes that
in the event that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any
remedy at law may prove to be inadequate relief to the Buyers.  The Company therefore agrees that the Buyers shall be
entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and
without posting a bond or other security.

 

(n)       Rescission
and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) the Transaction Documents, whenever any Buyer 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 Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights.

 

    	- 41 -

     

    

 

(o)       Payment
Set Aside.  To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any
of the other Transaction Documents or the Buyers enforce or exercise their rights hereunder or 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, foreign, 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.

 

(p)       Independent
Nature of Buyers' Obligations and Rights.  The obligations of each Buyer under any Transaction Document are several
and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the
obligations of any other Buyer under any Transaction Document.  Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company
acknowledges that the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Buyers are in any way acting in concert or as a group, and the Company shall not assert any such
claim with respect to such obligations or the transactions contemplated by the Transaction Documents and the Company acknowledges
that the Buyers are not acting in concert or as a group with respect to such obligations or the transactions contemplated by the
Transaction Documents.  The Company acknowledges and each Buyer confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors.  Each Buyer shall
be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement
or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party
in any proceeding for such purpose.

 

[Signature Page Follows]

 

    	- 42 -

     

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.

 

	 	COMPANY:
	 	 
	 	REAL GOODS SOLAR, INC.
	 	 
	 	By:	/s/ Dennis Lacey
	 	 	Name:  Dennis Lacey
	 	 	Title:    Chief Executive Officer

 

[Signature Page
to Securities Purchase Agreement]

 

     

     

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.

 

	 	 	 	BUYERS:
	 	 	 	 
	 	 	 	
        HUDSON BAY MASTER FUND LTD.

         

        By: Hudson Bay Capital Management LP, as its Investment Manager

	 	 	 	 	 
	 	 	 	By:	
        /s/ George Antonopoulos

	 	 	 	 	Name:  George Antonopoulos
	 	 	 	 	Title:  Authorized Signatory

 

     

     

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.

 

	 	 	 	BUYERS:
	 	 	 	 
	 	 	 	Empery Asset Master, Ltd.
	 	 	 	 
	 	 	 	By: Empery Asset Management, LP, its authorized agent
	 	 	 	 	 
	 	 	 	By:	
        /s/ Brett Director

	 	 	 	 	Name: Brett Director
	 	 	 	 	Title: General Counsel

 

     

     

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.

 

	 	 	 	BUYERS:
	 	 	 	 
	 	 	 	Empery Tax Efficient, LP
	 	 	 	 
	 	 	 	By: Empery Asset Management, LP, its authorized agent
	 	 	 	 	 
	 	 	 	By:	
        /s/ Brett Director

	 	 	 	 	Name: Brett Director
	 	 	 	 	Title: General Counsel

 

     

     

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.

 

	 	 	 	BUYERS:
	 	 	 	 
	 	 	 	Empery Tax Efficient II, LP
	 	 	 	 
	 	 	 	By: Empery Asset Management, LP, its authorized agent
	 	 	 	 	 
	 	 	 	By:	
        /s/ Brett Director

	 	 	 	 	Name: Brett Director
	 	 	 	 	Title: General Counsel

 

     

     

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.

 

	 	 	 	BUYERS:
	 	 	 	 
	 	 	 	Alto Opportunity Master Fund, SPC
	 	 	 	 	 
	 	 	 	By:	
        /s/ Daniel H. Kochav

	 	 	 	 	Name: Daniel H. Kochav
	 	 	 	 	Title: Director

 

     

     

    

 

SCHEDULE OF BUYERS

 

	(1)	(2)	(3)	(4)	(5)	(6)
	 	 	 	 	 	 
	Buyer
	Address
        and

        Facsimile Number
	Aggregate

        Principal

        Amount of Notes
	Number
        of

        Warrant Shares
	Purchase
        Price
	Legal
        Representative's Address

        and Facsimile Number

	 

        Hudson Bay Master Fund
        Ltd.
	 

        777 Third Avenue, 30th
        Floor

        New York, NY 10017

        Attention: Yoav Roth

                          George Antonopoulos

        Facsimile:  646-214-7946

        Telephone: 212-571-1244

        Residence: Cayman Islands

        E-mail: investments@hudsonbaycapital.com

        operations@hudsonbaycapital.com

        

	 

        $6,000,000
	 

        2,987,676
	 

        $6,000,000
	 

        Schulte Roth & Zabel
        LLP

        919 Third Avenue

        New York, New York  10022

        Attention:  Eleazer Klein, Esq.

        Facsimile: (212) 593-5955

        Telephone:  (212) 756-2376

	 

        Empery Asset Master, Ltd.
	 

        c/o Empery Asset Management,
        LP

        One Rockefeller Plaza,
        Suite 1205

        New York, New York

        10020

        Attention: Ryan M. Lane

        Facsimile: (212) 608-3307

        Telephone: (212) 608-3300

        Email: notices@emperyam.com
	 

        $712,452
	 

        354,763
	 

        $712,452
	 
	 

        Empery Tax Efficient,
        LP
	 

        c/o Empery Asset Management,
        LP

        One Rockefeller Plaza,
        Suite 1205

        New York, New York

        10020

        Attention: Ryan M. Lane

        Facsimile: (212) 608-3307

        Telephone: (212) 608-3300

        Email: notices@emperyam.com
	 

        $529,023
	 

        263,425
	 

        $529,023
	 
	 

        Empery Tax Efficient II,
        LP
	 

        c/o Empery Asset Management,
        LP

        One Rockefeller Plaza,
        Suite 1205

        New York, New York

        10020

        Attention: Ryan M. Lane

        Facsimile: (212) 608-3307

        Telephone: (212) 608-3300

        Email: notices@emperyam.com
	 

        $258,525
	 

        128,731
	 

        $258,525
	 
	 

        Alto Opportunity Master
        Fund, SPC
	 

        c/o Tenor Capital Management

        1180 Avenue of Americas,
        Suite 1940

        New York, NY 10036

         

        Attention:

        Waqas Khatri (wkhatri@tenorcapital.com,
        +1-212-918-5213)

        operations@tenorcapital.com
        (Ravi Patel, Vidhi Patel, Carine Tabet, 212-918-5303)
	 

        $2,500,000
	 

        1,244,865
	 

        $$2,500,000
	 

 

 

     

     

    

 

EXHIBITS

 

		Exhibit A	Form of Notes

		Exhibit B	Form of Warrants

		Exhibit C	Form of Registration Rights Agreement

		Exhibit D	Form of Master Control Account Agreement

		Exhibit E	Form of Voting Agreement

		Exhibit F	Form of Irrevocable Transfer Agent Instructions

		Exhibit G	Form of Opinion of Company Counsel

		Exhibit H	Form of Secretary's Certificate

		Exhibit I	Form of Officer's Certificate

 

SCHEDULES

 

		Schedule 3(a)	Subsidiaries

		Schedule 3(c)	Issuance of Securities

		Schedule 3(l)	Absence of Certain Changes

		Schedule 3(n)	Regulatory Permits

		Schedule 3(u)	Equity Capitalization

		Schedule 3(w)	Absence of Litigation

		Schedule 3(x)	Insurance

		Schedule 3(aa)	Intellectual Property Rights

		Schedule 3(ee)	Tax Status

		Schedule 3(ff)	Internal Controls

		Schedule 3(rr)	Stock Option Plans

		Schedule 3(tt)	No Disagreements with Accountants and Lawyers

		Schedule 4(d)	Use of Proceeds

 

     

     

    

 

Schedule 3(a)  Subsidiaries/Significant
Subsidiaries

 

	Entity Name	 	State or country of

Incorporation or

Registration	 
	 	 	 	 
	Significant Subsidiaries	 	 	 
	 	 	 	 
	Alteris Renewables, Inc.	 	Delaware	1
	Elemental Energy LLC	 	Hawaii	1
	Real Goods Energy Tech, Inc.	 	Colorado	1
	RGS Financing, Inc.	 	Colorado	1
	Mercury Energy, Inc.	 	Delaware	1
	Real Goods Solar, Inc. - Mercury	 	New York	2
	 	 	 	 
	Other entities without material assets	 	 	 
	 	 	 	 
	Alteris RPS, LLC	 	Delaware	3
	Real Goods Syndicated, Inc.	 	Delaware	1
	Richmond Peck Solar Farm, LLC	 	Delaware	3
	Sunetric Management LLC	 	Delaware	4
	Mercury Commercial Solar Fund I, LLC	 	New York	2
	Mercury Solar Birch, LLC	 	Delaware	2
	Mercury Solar, Cedar, LLC	 	Delaware	2
	Mercury Solar Pine, LLC	 	Delaware	2
	Mercury Residential Solar Fund I, LLC	 	New York	2
	RGS Energy, LLC	 	Puerto Rico	2
	 	 	 	 
	1. Subsidiary of Real Goods Solar, Inc.	 	 	 
	2. Subsidiary of Mercury Energy, Inc.	 	 	 
	3. Subsidiary of Alteris Renewables, Inc.	 	 	 
	4. Subsidiary of Elemental Energy,  LLC	 	 	 

 

     

     

    

 

Schedule 3(c) – Issuance of Securities

 

In June, 2013 the company issued warrants to purchase 1,683,488
shares of Common Stock (the “June 2013 Warrants), which contain a “formula” anti-dilution provision as well as
a provision adjusting the shares and conversion price for stock splits, reverse stock splits and the like. There are currently
a total of 332,434 shares of Common Stock issuable upon the exercise of the June 2013 Warrants at an exercise price of $11.20 per
share, after adjusting for the 1:20 reverse stock split in May, 2014 and subsequent issuances of securities but prior to giving
effect to the securities issuable under this Agreement. As a result of the transactions contemplated by the Transaction Documents,
approximately 425,000 additional shares will be issuable upon exercise of the June 2013 Warrants and the Exercise Price thereof
will be adjusted to approximately $4.90 per share. The number of warrant shares and the Exercise Price are subject to further adjustments
depending on the number of shares of Common Stock issued upon conversion of the Notes and exercise of the Warrants.

 

In addition, there are warrants to purchase 3,209 shares of
Common Stock issued in February, 2015 (the currently outstanding with the right to have their exercise price adjusted to the price
of the securities issued under this Agreement or exchanged for 3,690 shares of Common Stock. There is no increase in the number
of shares issuable upon exercise of these warrants as a result of the transactions contemplated by the Transaction Documents.

 

     

     

    

 

Schedule 3(l) – Absence of Certain
Changes

 

The following sections of the Company’s quarterly reports
on Form 10-Q describe further material adverse changes and developments in the Company’s business since December 31, 2014:

Quarterly reports on Form 10-Q for the period ended March 31,
2015:

Cautionary Statement Regarding Forward-Looking
Statements

Part I Financial Information

 

Quarterly reports on Form 10-Q for the period ended June 30,
2015:

Cautionary Statement Regarding Forward-Looking
Statements

Part I Financial Information

Part II – Other Information, Item
1 Legal Proceedings and Item 1A Risk Factors

 

Quarterly reports on Form 10-Q for the period ended September
30, 2015

Cautionary Statement Regarding Forward-Looking
Statements

Part I Financial Information

Part II – Other Information, Item
1 Legal Proceedings, Item 1A Risk Factors, and Item 5 Other Information.

 

In April, 2015 the Company sold inventory in California to Solar
Service Center for $783,000 in conjunction with the closure of the Company’s offices in California.

 

As disclosed in the “Liquidity and Financial Resources
Update”  in Note 1 to Condensed Consolidated Financial Statements and elsewhere in the Company’s quarterly
report on Form 10-Q for the quarter ended September 30, 2015, the Company has reported recurring operating losses and negative
cash from operations, resulting in not paying vendors on a timely basis and its need to raise additional capital in the fourth
quarter of 2015. As a result of the delays in closing this transaction and its amended and restated loan agreement, the Company
continues to be behind in its accounts payable. The Company has shared its financing activities under non-disclosure with certain
key vendors.

 

     

     

    

 

Schedule 3(n) – Regulatory Permits

 

On December 15, 2014, the Company received a letter from the
Nasdaq Stock Market (“NASDAQ”) notifying the Company that for the last 30 consecutive business days the bid price of
the Company’s Common Stock had closed below the minimum $1.00 per share requirement for continued inclusion on NASDAQ based
on Listing Rule 5550(a)(2), and describing a timetable for bringing the Company into compliance with that rule. The Company disclosed
this notification on a Form 8-K filed on December 19, 2014. The Company completed a one-for-twenty reverse stock split of its Common
Stock on May 17, 2015, and as a result the Company’s stock price closed above the minimum $1.00 per share requirement beginning
on that date bringing the Company back into compliance.

 

On April 14, 2015, the Company received a letter from NASDAQ
notifying the Company that it was no longer in compliance with NASDAQ Listing Rule 5550(b)(2) because the minimum Market Value
of Listed Securities (MVLS) of the Company’s Common Stock had fallen below $35 million for the 30 business day period between
February 24, 2015 and April 13, 2015, and describing a timetable for bringing the Company into compliance with that rule. On August
17, 2015, NASDAQ notified the Company that based on its Form 10-Q for the period ended June 30, 2015 evidencing stockholders’
equity of $7.3 million, the Company had regained compliance with the NASDAQ rules by becoming compliance with the alternate requirement
for continued listing on the NASDAQ Capital Market set forth in Listing Rule 5550(b)(1), stockholders’ equity of at least
$2.5 million, and that as a result this matter was closed.

 

On December 23, 2015, the Company received a letter from the
NASDAQ notifying the Company that for the last 30 consecutive business days the bid price of the Company’s Common Stock had
closed below the minimum $1.00 per share requirement for continued inclusion on NASDAQ based on Listing Rule 5550(a)(2), and describing
a timetable for bringing the Company into compliance with that rule. The Company disclosed this notification on a Form 8-K filed
on December 24, 2015.

 

In addition, the Company may not be able to continue to meet
the Shareholder Equity listing standards for the Nasdaq Capital Market and may in the future receive a delisting notification with
respect to a failure to meet that standard.

 

On March 23, 2016 the qualifying individual for the Company’s
Hawaii contractor’s resigned as the qualifying employee. The Company’s contractor’s license may be suspended
if the Company does not hire a replacement within 90 days.

 

     

     

    

 

Section 3(u) – Equity Capitalization

 

Schedule 3(u)(i) – None

 

Schedule 3(u)(ii)  Outstanding options, warrants
and the like 146,979 options outstanding under the Company’s 2008 stock option plan.

 

	Warrants	warrant shares

outstanding	current exercise

price	Anti-dilution;

redemption
	June 2013 Warrants	332,434.00 	 $  11.20 	Formula anti-dilution (shares and exercise price); purchase rights for pro-rata issuances; redemption for fundamental transactions and going private
	November 2013 warrants	250,750.00 	 $ 68.20 	Adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances; redemption for fundamental transactions and going private
	June 2014 Warrants	46,426.00 	 $   63.80 	Adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances; redemption for fundamental transactions and going private.
	SVB Warrants	24,943.00 	$3.29-$47.20	ratchet for 12 months (expired); Adjustment of shares and exercise price for splits;
	Feb 2015 A & C Warrants	3,210.00 	 $    1.24 	full ratchet anti-dilution (exercise price); purchase rights for pro-rata issuances; Adjustment of shares and exercise price for splits;  purchase rights for pro-rata issuances; redemption in certain circumstances in fundamental transactions.  

 

     

     

    

 

	Feb 2015 Westpark warrants	28,000.00 	 $   10.00 	Adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances; purchase rights for pro-rata issuances; adjustment of exercise price for splits; purchase rights for pro-rata issuances; redemption in certain circumstances in fundamental transactions.
	June 2015 Series F warrants	410,969.00 	 $    1.24 	one time adjustment of exercise price on July 9, 2015; a Adjustment of shares and exercise price for splits;   purchase rights for pro-rata issuances;
	June 2015 Westpark warrants	109,589.00 	 $   4.20 	Adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances; adjustment of exercise price for splits; purchase rights for pro-rata issuances;
	total	1,206,321.00 	 	 

 

In addition, the Amended and Restated Loan Agreement between
the Company and Solar Solutions and Distributions, LLC (“Solar Solutions”) dated March 30, 2016 (the “Loan Agreement”)
provides that if, at any time, the sum of the outstanding principal amount of any Advances exceeds the lesser of either the Revolving
Line or the Borrowing Base under the Loan Agreement (such excess amount being an “Overadvance”), the Company shall
immediately pay to Solar Solutions in cash such Overadvance.   The Revolving Line is currently set at $ 5 million, and
is reduced to $ 4 million on October 1, 2015 and to $3 million on January 1, 2016. To the extent an Overadvance occurs as a result
of the Company’s failure to repay the outstanding principal amount of any Advances at the time the Revolving Line is reduced,
at Solar Solution’s election, (a) within five business days the Overadvance shall be repaid, subject to compliance with applicable
rules of the Nasdaq Stock Market set forth in Section 2.2(b), with an issuance shares of the Company’s Common Stock using
a per share conversion price of ninety percent (90%) of the per share closing price on the day of such Overadvance, or (b) Solar
Solutions shall permit the Company to sell certain Collateral, including leasing assets of RGSF, with such sale proceeds used to
repay the Overadvance.  

 

     

     

    

 

Schedule 3(u)(iii) outstanding notes, credit facilities.

The Loan Agreement between the Company and Solar Solutions as
further described in Schedule 3(u)(ii).

 

Schedule 3(u)(iv) outstanding financing statements

Financing statements filed by Solar Solutions.

 

Schedule 3(u)(v) –

The Company has granted registration rights under the following:

The Amended and Restated Registration Rights Agreement, dated
as of December 19, 2011, by and among the Company, Gaiam, Inc., and Riverside Renewable Energy Investments, LLC. [Note: On November
5, 2013, Gaiam ceased to be a party to the Amended and Restated Registration Rights Agreement pursuant to the terms of an Agreement,
dated November 5, 2013, among the parties.]

The Registration Rights Agreement, dated as of June 3, 2013,
by and among the Company and the investors party thereto.

The Warrants to purchase the Company’s Class A common
stock, issued November 20, 2013.

The Registration Rights Agreement, dated as of July 9, 2014,
by and among the Company and the investors party thereto.

The Conversion Agreement dated as of June 24, 2015 by and between
the Company and Riverside Fund III, L.P.

Registration right granted to the Placement Agent.

 

Schedule 3(u)(vi) – See Schedule 3(c) and 3(u)(ii) above.

 

Schedule 3(u)(vii) instruments with anti-dilution provisions:
See schedule 3(c) and 3(u)(ii) above.

 

Schedule 3(u)(viii) – None.

 

Schedule 3(u)(ix) – None.

 

     

     

    

 

Schedule 3 (w) Absence of Litigation

 

	Matter	Description
	SEC Subpoena	See Part II, Item 1, Legal Proceedings of the Company’s 10-Q for the quarter ended September 30, 2015.
	Wind Turbine warranty claim	Demand to repair wind turbine constructed in 2009. The Company has agreed to arbitrate or mediate this matter.
	Commission claim	Claim for commissions by former employee and counterclaim from the company for theft of IP. Trial scheduled for May 2016.
	Residential customer warranty claim	Claim for removal and reinstallation of residential system due to deterioration of roofing material from sealant.  Settlement terms have been agreed to by the customer and Company, but the involvement of third parties (including the GC and other subs) in the pending arbitration related to other construction issues is delaying final resolution.
	Commercial customer warranty claim	Demand to repair roof issues alleged to have been caused during Company’s warranty work on the system.  These are disputed by Company as largely pre-existing. Currently Company’s insurer is investigating.
	Residential customer production claim	Claim for damages for failure to turn system on.
	Claim for lost wages and attorneys’ fees	Wage claim for former employee.  Primary liability determined, but claimant has filed for attorney’s fees despite the case having been previously dismissed.
	Property damage claim	Claim for $6,991.07 from landlord for the Company’s former office in Fresno, CA.
	Overdue accounts payable claim	Demand for approximately $42,000 in principal and interest for overdue AP.
	Residential customer warranty claim	Arbitration filed for alleged defects in 2009 system subsequently modified by customer.  Settlement terms approved.  Awaiting execution.
	Residential customer claim.	Demand for lost SRECs related to delay in registration of auto-reporting meter.  We have made demands for contribution to two other parties to meet customer’s settlement demand of approximately $1,500.

 

     

     

    

 

	Commercial customer reimbursement claim	Demand received related to outstanding payment obligation assumed by Company for project.  Payment schedule under negotiation.
	Residential customer warranty claim	Demand for repairs relating to roof leaks. The Company disputes that the leaks are attributable to the solar system.
	Subcontractor claim	Small claims issue related to time and materials service work.  Set for small claims hearing on 3/31/16.

 

     

     

    

 

Schedule 3(x) Insurance

 

On March 18, 2016 the Company received a notice from Continental
Casualty Company that its directors and officers liability insurance policy which expires on May 8, 2015, would not be renewed
and that there would be no coverage available after that date, based upon the risk no longer meeting underwriter guidelines. The
Company intends to seek replacement coverage from another carrier.

 

     

     

    

 

Schedule 3(aa) Intellectual Property
Rights

 

The Company acquired the trademarks “Mercury Solar”,
“Mercury Energy” and “Syndicated Solar” in 2014, and has abandoned such trademarks.

 

     

     

    

 

Schedule (ee) – Tax Status

 

On October 13, 2015 the California Board of Equalization issued
a determination that the Company owes $272,333.69 in past due sales taxes for the period from October 1, 2011 to March 31, 2014.
The Company has booked this liability on its financial statements for the year ended December 31, 2015. The Company intends to
pay this assessment in installments and evaluate this determination and the opportunity to obtain a refund of some or all of this
amount.

 

     

     

    

 

Schedule (ff) – Internal Controls

 

See Item 8, Report of Independent Registered Public Accounting
Firm, and Item 9A., Controls and Procedures, to the Company’s Annual Report on Form 10-K for the year ended December 31,
2014, which are hereby incorporated by reference, regarding the deficiencies in the Company’s disclosure controls and procedures
and internal control over financial reporting.

 

     

     

    

 

Schedule (rr) – Stock Option Plans

 

The Company previously granted stock options to two of its former
executives outside of any stock option plan. These options have now expired.

 

     

     

    

 

Schedule (tt) – No Disagreements
with Accountants and Lawyers

 

The Company currently owes its accountants and the outside counsel
involved in the Transaction past due amounts.

 

     

     

    

 

Schedule 4(d) – Use of Proceeds

 

Working Capital; payment of overdue accounts payable.

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