Document:

Exhibit 10.3

 

GENERAL SECURITY AGREEMENT

 

 

GENERAL SECURITY
AGREEMENT dated April 20, 2018, by and between Precipio, Inc., a Delaware corporation, with headquarters located at
4 Science Park, New Haven, CT 06511 (the “Debtor”), and the investors set forth on Schedule A hereof (collectively,
the “Secured Party”).

 

Debtor hereby agrees
in favor of Secured Party as follows:

 

1.      In consideration for loans made
or to be made to Debtor evidenced by the 8% Senior Secured Convertible Promissory Notes of Debtor in the principal amounts set
forth on Schedule A hereto, payable to the order of Secured Party (such 8% Senior Secured Convertible Promissory Notes,
as amended, modified, supplemented, replaced or substituted from time to time, being herein referred to as the “Notes”),
Debtor hereby grants to Secured Party a continuing security interest in, lien upon and a right of setoff against, and Debtor hereby
assigns to Secured Party, all of Debtor’s right, title and interest in and to the Collateral described in Section 2, to secure
the full and prompt payment, performance and observance of all present and future indebtedness, obligations, liabilities and agreements
of any kind of Debtor to Secured Party arising under or in connection with the Notes, which is existing now or hereafter (all of
the foregoing being herein referred to as the “Obligations”).

 

2.       The
Collateral is described on Schedule B annexed hereto as part hereof and on any separate schedule(s) identified as Collateral
at any time or from time to time furnished by Debtor to Secured Party (all of which are hereby deemed part of this Security Agreement)
and includes claims of Debtor against third parties for loss or damage to or destruction of any Collateral. The Debtor hereby grants
a first priority security interest in such Collateral.

 

3.        The
Debtor has entered into an Assistance Agreement dated 8 January 2018 with the State of Connecticut Department of Economics and
Community Development pursuant to which the Debtor received certain loans and granted certain liens on the Debtor’s collateral.
The Debtor and the State of Connecticut Department of Economics and Community Development shall provide the Secured Party with
a subordination agreement pursuant to which the rights of the State of Connecticut Department of Economics and Community Development
shall be subordinated to the rights of the Secured Party so long as this Agreement is in effect.

 

4.        The
Debtor has entered into a Debt Settlement Agreement dated October 31, 2017with certain vendors of the Debtor and the Collateral
Services LLC acting as the collateral agent to the vendors. Pursuant to the terms of the Debt Settlement Agreement the Debtor agreed
and promised to pay to each of the vendors the settlement amounts set out therein in forty-eight (48) equal monthly installments
no later than the last day of each month beginning with the month ending July 31, 2018 and ending with the month ending June 30,
2022 The Debtor, each of the vendors and Collateral Services LLC shall provide the Secured Party with subordination agreement pursuant
to which the rights of the vendors shall be subordinated to the rights of the Secured Party so long as this Agreement is in effect.
For the avoidance of doubt, the Secured Party hereby confirms that any scheduled installment payments as required by the Debt Settlement
Agreement shall be permitted to be made by the Debtor to each of the vendors as long as no Default exists and no Event of Default
would arise as a result of such scheduled payments.

 

    

     

    

5.       Debtor
hereby warrants, represents, covenants and agrees (as of the date hereof and so long as any Obligation remains outstanding) that:
(a) the chief executive office and other places of business of Debtor, the books and records relating to the Collateral (except
for such records as are in the possession or control of Secured Party) and the Collateral are located at 4 Science Park, New Haven,
CT 06511, or as set forth on Schedule B, and Debtor will not change any of the same, or merge or consolidate with any person or
change its name or conduct its business under any trade, assumed or fictitious name, without prior written notice to and consent
of Secured Party (and in the case of location of Collateral, will from time to time notify Secured Party of the locations thereof);
(b) the Collateral is and will be used in the business of Debtor; (c) the Collateral is now, and at all times will be, owned by
Debtor free and clear of all liens, security interests, claims and encumbrances; (d) Debtor will not abandon or assign, sell, lease,
transfer or otherwise dispose of, other than in the ordinary course of Debtor’s business, nor will Debtor suffer or permit
any of the same to occur with respect to, any Collateral, without prior written notice to and consent of a designated representative
of the Secured Party; (e) Debtor will make payment or will provide for the payment, when due, of all taxes, assessments or contributions
or other public or private charges which have been or may be levied or assessed against Debtor, whether with respect to the Collateral,
to any wages or salaries paid by Debtor, or otherwise, will deliver to Secured Party, on demand, certificates or other evidence
satisfactory to Secured Party attesting thereto and shall cause Debtor’s subsidiaries to take any such action as described
under this section 3(e); (f) Debtor will use the Collateral for lawful purposes only, with all reasonable care and caution and
in conformity in all material respects with all applicable laws, ordinances and regulations; (g) Debtor will, at Debtor’s
sole cost and expense, keep the Collateral in good order, repair, running condition and in substantially the same condition as
on the date hereof, reasonable wear and tear excepted, and Debtor will not, without the prior written consent of Secured Party,
alter or remove any identifying symbol or number upon any of the Collateral; (h) Secured Party shall at all times have free access
to and right of inspection of any Collateral and any papers, instruments and records pertaining thereto (and the right to make
extracts from and to receive from Debtor originals or true copies of such records, papers and instruments upon request therefor)
and Debtor hereby grants to Secured Party a security interest in all such records, papers and instruments to secure the payment,
performance and observance of the Obligations; (i) the Collateral is now and shall remain personal or intangible property, and
Debtor will not permit any other types of Collateral to become a fixture without prior written notice to and consent of Secured
Party and without first making all arrangements, and delivering, or causing to be delivered, to Secured Party all instruments and
documents, including, without limitation, waivers and subordination agreements by any landlords or mortgagees, requested by and
satisfactory to Secured Party to preserve and protect the primary security interest granted herein against all persons; (j) Debtor
will, at its sole cost and expense, perform all acts and execute all documents requested by Secured Party from time to time to
evidence, perfect, maintain or enforce Secured Party’ second priority security interest granted herein or otherwise in furtherance
of the provisions of this Security Agreement;

 

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(k)
at any time and from time to time, Debtor shall, at its sole cost and expense, execute and deliver to Secured Party such financing
statements pursuant to the Uniform Commercial Code (“UCC”), applications for certificate of title and other papers,
documents or instruments as may reasonably be requested by Secured Party in connection with this Security Agreement, and to the
extent permitted by applicable law, Debtor hereby authorizes Secured Party to execute and file at any time and from time to time
one or more financing statements or copies thereof or of this Security Agreement with respect to the Collateral signed only by
Secured Party, and Debtor agrees to pay any recording tax or similar tax arising in connection with the filing of any such financing
statement and further agrees to pay any additional recording or similar tax which is incurred in connection therewith; (l) Debtor
assumes all responsibility and liability arising from the Collateral; (m) in their discretion, Secured Party may, at any time
and from time to time, upon the occurrence and during the continuance of a Default (as hereinafter defined), demand, sue for,
collect or receive any money or property at any time payable or receivable on account of or in exchange for, or make any compromise
or settlement deemed desirable by Secured Party with respect to, any Collateral, and/or extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of, or release, any of the Obligations and/or the Collateral, or any obligor,
maker, endorser, acceptor, surety or guarantor of, or any Party to, any of the Obligations or the Collateral, all without notice
to or consent by Debtor and without otherwise discharging or affecting the Obligations, the Collateral or the second priority
security interest granted herein; (n) in their discretion, Secured Party may, at any time and from time to time, for the account
of Debtor, pay any amount or do any act required of Debtor hereunder and which Debtor fails to do or pay, and any such payment
shall be deemed an advance by Secured Party to Debtor payable on demand together with interest at the highest rate then payable
on any of the Obligations; (o) Debtor will promptly pay Secured Party for any and all sums, costs, and expenses which Secured
Party may pay or incur pursuant to the provisions of this Security Agreement or in perfecting, defending, protecting or enforcing
this Security Agreement or the security interest granted herein or in enforcing payment of the Obligations or otherwise in connection
with the provisions hereof, including but not limited to all search, filing and recording fees, taxes, fees and expenses for the
service and filing of papers, premium on bonds and undertakings, fees of marshals, sheriffs, custodians, auctioneers, court costs,
collection charges, travel expenses, and reasonable attorneys’ fees, all of which together with interest at the highest
rate then payable on any of the Obligations, shall be part of the Obligations and be payable on demand; (p) upon the occurrence
and during the continuance of a Default, any proceeds of the Collateral received by Debtor shall not be commingled with other
property of Debtor, but shall be segregated, held by Debtor in trust for Secured Party, and immediately delivered to Secured Party
in the form received, duly endorsed in blank where appropriate to effectuate the provisions hereof, the same to be held by Secured
Party as additional Collateral hereunder or, at Secured Party’ option, to be applied to payment of the Obligations, whether
or not due and in any order; (q) in their sole discretion, Secured Party may, at any time and from time to time, assign, transfer
or deliver to any transferee of any Obligations, any Collateral, whereupon Secured Party shall be fully discharged from all responsibility
and the transferee shall be vested with all powers and rights of Secured Party hereunder with respect thereto, but Secured Party
shall retain all rights and powers with respect to any Collateral not assigned, transferred or delivered; and (r) upon request
of Secured Party, at any time and from time to time, Debtor shall, at its cost and expense, execute and deliver to Secured Party
reports as to the Collateral listing all items thereof, describing the condition of same and setting forth the value thereof (lower
of cost or market) all in form and substance reasonably satisfactory to Secured Party. Whenever any act is referred to herein
as being taken by the Secured Party, it shall mean by the Agent appointed by all of the Lenders pursuant to Section 6 hereof.

 

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4.       The
term Default as used in this Security Agreement shall mean any Event of Default, as such term is defined in the Notes.

 

5.       
Upon the occurrence and during the continuance of any Default, Secured Party may, without notice to (except as herein set forth)
or demand upon Debtor, declare any Obligations immediately due and payable and Secured Party shall have the following rights and
remedies (to the extent permitted by applicable law) in addition to all rights and remedies of a Secured Party under the UCC or
of Secured Party under the Obligations, all such rights and remedies being cumulative, not exclusive and enforceable alternatively,
successively or concurrently:

 

(a)       Secured
Party may, at any time and from time to time, with or without judicial process or the aid and assistance of others, (i) enter upon
any premises in which any Collateral may be located and, without resistance or interference by Debtor, take possession of the Collateral,
(ii) dispose of any part or all of the Collateral on any such premises, (iii) require Debtor to assemble and make available to
Secured Party at the expense of Debtor any part or all of the Collateral at any place and time designated by Secured Party which
is reasonably convenient to both parties, (iv) remove any part or all of the Collateral from any such premises for the purpose
of effecting sale or other disposition thereof (and if any of the Collateral consists of motor vehicles, Secured Party may use
Debtor’s license plates), and (v) sell, resell, lease, assign and deliver, grant options for or otherwise dispose of any
part or all of the Collateral in its then condition or following any commercially reasonable preparation or processing, at public
or private sale or proceedings or otherwise, by one or more contracts, in one or more parcels, at the same or different times,
with or without having the Collateral at the place of sale or other disposition, for cash and/or credit, and upon any terms, at
such place(s) and time(s) and to such person(s) as Secured Party deems best, all without demand, notice or advertisement whatsoever
except that where an applicable statute requires reasonable notice of sale or other disposition Debtor hereby agrees that the sending
of ten days’ notice by overnight mail, postage prepaid, to any address of Debtor set forth in this Security Agreement shall
be deemed reasonable notice thereof. If any Collateral is sold by Secured Party upon credit or for future delivery, Secured Party
shall not be liable for the failure of the purchaser to pay for same and in such event Secured Party may resell or otherwise dispose
of such Collateral. Secured Party may buy any part or all of the Collateral at any public sale and, if any part or all of the Collateral
is of a type customarily sold in a recognized market or is of the type which is the subject of widely distributed standard price
quotations, Secured Party may buy such Collateral at private sale and in each case may make payment therefor by any means, whether
by credit against the Obligations or otherwise. Secured Party may apply the cash proceeds actually received from any sale or other
disposition to the reasonable expenses of retaking, holding, preparing for sale, selling, leasing and the like, to reasonable attorneys’
fees and all legal, travel and other expenses which may be incurred by Secured Party in attempting to collect the Obligations,
proceed against the Collateral or enforce this Security Agreement or in the prosecution or defense of any action or proceeding
related to the Obligations, the Collateral or this Security Agreement; and then to the Obligations in such order and as to principal
or interest as Secured Party may desire; and Debtor shall remain liable and will pay Secured Party on demand any deficiency remaining,
together with interest thereon at the highest rate then payable on the Obligations and the balance of any expenses unpaid, with
any surplus to be paid to Debtor, subject to any duty of Secured Party imposed by law to the holder of any subordinate security
interest in the Collateral known to Secured Party.

 

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(b)       Secured
Party may, at any time and from time to time, as appropriate, after the occurrence and during the continuance of a Default set
off and apply to the payment of the Obligations, any Collateral in or coming into the possession of Secured Party or their agents,
without notice to Debtor and in such manner as Secured Party may in their discretion determine.

 

6.       Secured
Party may designate and appoint a collateral agent (“Agent”), as attorney-in-fact of Debtor, irrevocably and with
power of substitution, with authority to: endorse the name of Debtor on any notes, acceptances, checks, drafts, money orders,
instruments or other evidences of Collateral that may come into Secured Party’s possession; sign the name of Debtor on any
invoices, documents, assignments; execute proofs of claim and loss; execute endorsements, assignments or other instruments of
conveyance or transfer; adjust and compromise any claims under insurance policies or otherwise; execute releases; and do all other
acts and things necessary or advisable in the sole discretion of Secured Party to carry out and enforce this Security Agreement
or the Obligations. Neither Secured Party nor any designee or agent thereof shall be liable for any acts of commission or omission
done in good faith, for any error of judgment or for any mistake of fact or law. This power of attorney being coupled with an
interest is irrevocable while any Obligations shall remain unpaid.

 

7.       With
respect to the enforcement of Secured Party’s rights under this Security Agreement, Debtor hereby releases Secured Party
and Agent from any claims, causes of action and demands at any time arising out of or with respect to this Security Agreement,
the Obligations, the Collateral and its use and/or any actions taken or omitted to be taken by Secured Party or Agent in good faith
with respect thereto, and Debtor hereby agrees to hold Secured Party and Agent harmless from and with respect to any and all such
claims, causes of action and demands.

 

8.       Secured
Party’s prior recourse to any Collateral shall not constitute a condition of any demand, suit or proceeding for payment or
collection of the Obligations nor shall any demand, suit or proceeding for payment or collection of the Obligations constitute
a condition of any recourse by Secured Party to the Collateral. Any suit or proceeding by Secured Party to recover any of the Obligations
shall not be deemed a waiver of, or bar against, subsequent proceedings by Secured Party with respect to any other Obligations
and/or with respect to the Collateral. No act, omission or delay by Secured Party shall constitute a waiver of their rights and
remedies hereunder or otherwise. No single or partial waiver by Secured Party of any covenant, warranty, representation, Default
or right or remedy which they may have shall operate as a waiver of any other covenant, warranty, representation, Default, right
or remedy or of the same covenant, warranty, representation, Default, right or remedy on a future occasion. Debtor hereby waives
presentment, notice of dishonor and protest of all instruments included in or evidencing any Obligations or Collateral, and all
other notices and demands whatsoever (except as expressly provided herein).

 

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9.       Debtor
hereby agrees to pay, on demand, all out-of-pocket expenses incurred by Secured Party in connection with the enforcement of the
Note, this Security Agreement, and the Obligations and in connection with any amendment, including, without limitation, the fees
and disbursements of counsel to Secured Party.

 

10.       In
the event of any litigation with respect to any matter connected with this Security Agreement, the Obligations, the Collateral
or the Note, Debtor hereby waives the right to a trial by jury and all rights of setoff. Debtor hereby waives personal service
of any process in connection with any such action or proceeding and agrees that the service thereof may be made by certified or
registered mail directed to Debtor at any address of Debtor set forth in this Security Agreement. Debtor so served shall appear
or answer to such process within thirty days after the mailing thereof. Should Debtor so served fail to appear or answer within
said thirty-day period, Debtor shall be deemed in default and judgment may be entered by Secured Party against Debtor for the amount
or such other relief as may be demanded in any process so served. In the alternative, Secured Party may in their discretion effect
service upon Debtor in any other form or manner permitted by law.

 

11.       Upon
the payment in full of the Notes and satisfaction of all Obligations in accordance with the Notes or the occurrence of the event
described in the third paragraph of Section 1 hereof, the security interest granted hereby in the Collateral shall terminate and
all rights to the Collateral under this Agreement shall revert to Debtor. Upon any such termination, the Secured Party shall execute
and deliver UCC–3 financing statement releases or other documents of release reasonably requested by Debtor.

 

12.      Secured Party may assign their
rights and obligation hereunder to any Affiliate of Secured Party provided that such Affiliate assumes all of the liabilities or
obligations of Secured Party hereunder. For purposes of this section, “Affiliate” of any person means any other person
or entity which, directly or indirectly, controls or is controlled by that person, or is under common control with that person
or entity. “Control” (including, with correlative meaning, the terms “controlled by” and “under common
control with”), as used with respect to any person or entity, means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting
securities, by contract or otherwise.

 

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13.       All
terms herein shall have the meanings as defined in the UCC, unless the context otherwise requires. No provision hereof shall be
modified, altered, waived, released, terminated or limited except by a written instrument expressly referring to this Security
Agreement and to such provision, and executed by the Party to be charged. The execution and delivery of this Security Agreement
has been authorized by the Board of Directors of Debtor and by any necessary vote or consent of members of Debtor. This Security
Agreement and all Obligations shall be binding upon the successors and assigns of Debtor and shall, together with the rights and
remedies of Secured Party hereunder, inure to the benefit of Secured Party, their executors, administrators, successors, permitted
endorsees and permitted assigns. This Security Agreement and the Obligations shall be governed in all respects by the laws of the
State of New York applicable to contracts executed and to be performed in such state. If any term of this Security Agreement shall
be held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby. Secured
Party is authorized to annex hereto any schedules referred to herein. Debtor acknowledges receipt of a copy of this Security Agreement.

 

14.       All
notices and other communications under this Agreement shall be in writing and shall be deemed given when delivered personally,
by e-mail, by overnight mail or delivery service or mailed by certified mail, return receipt requested, to the parties.

 

IN WITNESS WHEREOF,
the undersigned have executed or caused this security agreement to be executed on the date first above set forth.

 

	 	
        COMPANY:

         
	 
	 	PRECIPIO, INC.	 
	 	 	 
	 	 	 
	 	By:________________________________	 
	 	
        Name:

        Title:
	 
	 	 	 
	 	 	 
	 

 

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Secured Party:

 

M2B FUNDING CORP.

 

 

By:________________________________

Name:

Title:

 

ALPHA CAPITAL ANSTALT

 

 

By:________________________________

Name:

Title:

 

OSHER CAPITAL PARTNERS LLC

 

 

By:________________________________

Name:

Title:

 

    8 

     

    

SCHEDULE A

 

 

 

 

 

 

 

 

 

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SCHEDULE B

 

 

As used in this Agreement,
the term “Collateral” means, collectively, wherever located, whether now owned or hereafter acquired or now
existing or hereafter acquired or created, all right, title and interest of the Company in and to all of its assets, including,
without limitation: (i) accounts, chattel paper, deposit accounts, documents, general intangibles (including, but not limited to
intellectual property, payment intangibles, software, licenses, franchises and customer information), goods (including, but not
limited to equipment, fixtures and inventory), instruments, investment property, letter-of-credit rights, money, other personal
property, software, any commercial tort claims; (ii) to the extent not referred to in clause (i) of this sentence, all (A) supporting
obligations and incidental property rights incident to, arising or accruing pursuant to or otherwise relating to any of the things
referred to in clause (i) of this sentence, whether arising or accruing from any action taken by the Company or the Collateral
Agent or otherwise, (B) proceeds of any of the items referred to in clauses (i) and (ii)(A) of this sentence and (C) books and
records relating to any of the items referred to in clauses (i) and (ii)(A) and (B) of this sentence.

 

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SCHEDULE B

 

	Vendor	Settlement Amount	Monthly Installment

 

 

 

 

    11Exhibit 10.4

 

SECURITIES PURCHASE
AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”) is dated as of April 20, 2018, between Precipio, Inc., a Delaware
corporation (the “Company”) and the investors set forth in Schedule A attached hereto (each a “Purchaser”
and collectively, the “Purchasers”).

  

WHEREAS, subject
to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchasers,
and the Purchasers, severally and not jointly, desire to purchase from the Company, securities of the Company as more fully described
in this Agreement.

  

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

 

ARTICLE
I

DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents with respect to a particular Closing have been
executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations
to pay the relevant Subscription Amount and (ii) the Company’s obligations to deliver the corresponding Securities, in each
case, have been satisfied or waived.

 

    	 	1	 

     

    

 

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

 

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

 

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

 

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

 

“Company
Counsel” means Goodwin Procter LLP, with offices located at 620 Eight Avenue, New York, NY 10018.  

 

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

  

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

  

“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(p).

  

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

  

“Exercise
Price” shall have the meaning ascribed to such term in the Warrants.

 

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

  

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

 

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

  

    	 	2	 

     

    

 

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

  

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

  

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

  

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

  

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

  

“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.16.

  

“Notes”
means up to $3,296,703.30 principal amount of the 8% Senior Secured Convertible Promissory Notes, issued by the Company to the
Purchasers hereunder, in the form of Exhibit A attached hereto.

  

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

  

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

  

“Registration
Statement” means a registration statement under the Securities Act covering the resale of the Underlying Shares by the
Purchaser as provided for herein.

 

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

  

“Required
Minimum” means, as of any date, 250% of the maximum aggregate number of shares of Common Stock then issued or potentially
issuable in the future pursuant to the Transaction Documents, including any Underlying Shares.

  

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

  

“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

  

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

  

    	 	3	 

     

    

 

“Securities”
means the Notes, the Warrants and the Underlying Shares.

  

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

  

“Security
Agreement” means the Security Agreement entered into between the Company and the Purchasers as of the Closing Date.

  

“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include any sale of Securities pursuant to Rule 144).

  

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

  

“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.

  

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

  

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

  

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

  

“Transaction Offer”
shall have the meaning set forth in Section 4.14.

  

“Transfer
Agent” means Wells Fargo Shareowner Services, the current transfer agent of the Company, with a mailing address of 1110
Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120, and any successor transfer agent of the Company.

  

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

  

    	 	4	 

     

    

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market other than the OTC Bulletin Board, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported
by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC
Bulletin Board is the Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on a Trading Market and if prices
for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the holders of a majority in interest of the aggregate principal amount of the then outstanding Notes and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company.

  

“Warrants”
means the Common Stock purchase warrants to be issued by the Company to the Purchasers hereunder, in the form of Exhibit C attached
hereto.

 

ARTICLE
II

PURCHASE AND SALE

 

2.1             
Closing. Subject to the satisfaction of the conditions to closing set forth herein, an initial closing shall take
place with respect to the lesser principal amount of Notes as shall equal (i) $2,180,000, or (ii) such principal amount of Notes
which when fully converted to Common Stock in accordance with the terms of the Note, inclusive of interest payable thereon, shall
not exceed 19.9% of the outstanding number of shares of Common Stock of the Company on the initial closing date hereof (the “19.9%
Limit”). Any principal amount of Notes and Warrants not purchased as a result of the 19.9% Limit shall be purchased by the
Purchasers within three (3) business days after shareholders of the Company shall have approved the transactions contained herein
as required by the rules and regulations of the Nasdaq Stock Market (“Shareholder Approval”). The purchase and sale
of Notes and Warrants, in the amounts and to the Purchasers listed on Schedule A attached hereto shall take place at the
offices of counsel to the Purchasers, Sichenzia Ross Ference Kesner LLP at 1185 Avenue of the Americas, New York, NY 10036 or
such other location as the parties shall mutually agree at such time as the Company and the Purchasers mutually agree upon orally
or in writing (which time and place are designated as the “Closing”). Each Purchaser shall deliver to the Company,
via wire transfer with immediately available funds an amount equal to the Subscription Amount applicable to the Closing as set
forth on the signature page hereto executed by each such Purchaser and the Company and the Purchasers shall deliver the other
items set forth in Section 2.2 deliverable at the Closing. Upon receipt of the funds, the Company shall deliver to the respective
purchasers the Note and Warrants, as determined pursuant to Section 2.2.

 

Provided that (i) Shareholder
Approval has been obtained, (ii) no Event of Default (as defined in the Notes) shall have occurred, unless waived by the Holder
(as defined in the Notes), (iii) the closing price of shares of the Company’s Common Stock as reported on the Trading Market
for the 20 Trading Days immediately preceding a proposed Closing shall be above $.20, (iv) the average daily volume of the Common
Stock as reported by the Trading Market for the 20 Trading Days immediately preceding a proposed Closing shall be greater than
$150,000 and (v) the Company provides three (3) Business Days written notice of its desire to sell additional notes, then:

 

    	 	5	 

     

    

 

(a)              
The Purchasers will purchase an additional $545,000 principal amount of Notes, together with Warrants, on the 120th
day following the initial Closing Date; and

  

(b)              
The Purchasers will purchase an additional $545,000 principal amount of Notes, together with Warrants, on the 150th
day following the initial Closing Date.

  

2.2             
Deliveries.

 

(a)              
On or prior to the Closing Date pursuant to Section 2.1, the Company shall deliver or cause to be delivered to the
Purchasers this Agreement duly executed by the Company. In addition, on or prior to the Closing Date held pursuant to Section
2.1, the Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i)             
a Note with a principal amount equal to the relevant Subscription Amount, registered in the name of the applicable Purchaser; 

 

(ii)            
a Warrant with a term of five years exercisable for such number of shares of Common Stock equal to the following: (a) the
number of shares of Common Stock issuable upon conversion of the Note, multiplied by (b) 50%;  

 

(iii)           
a Warrant with a term of one year exercisable for such number of shares of Common Stock equal to the following: (a) the
number of shares of Common Stock issuable upon conversion of the Note, multiplied by (b) 50%; 

 

(iv)           
the Security Agreement; 

 

(v)            
a certificate evidencing the formation and good standing of the Company in such entity’s jurisdiction of formation
issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date within ten (10) days of
the Closing Date;  

 

(vi)           
a certificate, executed by the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions as
adopted by the Company’s board of directors in a form reasonably acceptable to the Purchasers, (ii) the Certificate of Incorporation
of the Company, and (iii) the Bylaws of the Company, each as in effect at the Closing; and  

 

(vii)          
a legal opinion in form and substance acceptable to the Purchasers.

 

(b)              
On or prior to the Closing Date pursuant to Section 2.1, each Purchaser shall deliver or cause to be delivered to
the Company this Agreement duly executed by the Purchaser.

 

2.3             
Closing Conditions.

 

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

 

    	 	6	 

     

    

 

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

 

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

 

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

 

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

 

(i)             
the accuracy in all material respects when made and on the applicable Closing Date of the representations and warranties
of the Company contained herein (unless such representation or warranty is made as of a specific date therein); 

 

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

 

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

 

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

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES

 

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

 

(a)              
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a)(i). Except
as set forth on Schedule 3.1(a)(ii), the Company owns, directly or indirectly, all of the capital stock or other equity interests
of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall
be disregarded.

 

    	 	7	 

     

    

 

(b)              
Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with
the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted
except where the failure to be in good standing would not have a Material Adverse Effect. Neither the Company nor any Subsidiary
is in material violation nor material default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”).

 

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

 

    	 	8	 

     

    

 

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

 

(e)              
Filings, Consents and Approvals. Other than as set forth on Schedule 3.1(e), the Company is not required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance
by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.6 of this Agreement,
(ii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing
of the Underlying Shares for trading thereon in the time and manner required thereby, and (iii) the filing of Form D with the
Commission and such filings as are required to be made under applicable state securities laws (collectively, the “Required
Approvals”).

 

(f)               
Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with
the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Underlying Shares, when
issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and
clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.

 

(g)              
Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall
also include the number of shares of Common Stock reserved for issuance and shares of Common Stock owned beneficially, and of
record, by Affiliates of the Company as of the date hereof. Except as set forth on Schedule 3.1(g), the Company has not issued
any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of
employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant
to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the Exchange Act. Except as set forth on Schedule
3.1(g), no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents. Except as set forth on Schedule 3.1(g) or as a result of the purchase
and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for,
or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common
Stock Equivalents. Except as set forth on Schedule 3.1(g), the issuance and sale of the Securities will not obligate the Company
to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of
any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All
of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. Except as set forth on Schedule 3.1(g), no
further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of
the Securities. Except as set forth on Schedule 3.1(g), there are no stockholders agreements, voting agreements or other similar
agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.

 

    	 	9	 

     

    

 

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

 

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

 

    	 	10	 

     

    

 

(j)                
Litigation. Except as set forth on Schedule 3.1(j) or in the SEC Reports, there is no action, suit, inquiry, notice
of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company,
any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency
or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely
affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could,
if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Except as set forth
on Schedule 3.1(j) or in the SEC Reports, neither the Company nor any Subsidiary, nor any director or officer thereof, is or has
been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim
of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or
any Subsidiary under the Exchange Act or the Securities Act.

 

(k)              
Compliance. Except as set forth in the SEC Reports or on Schedule 3.1(l), neither the Company nor any Subsidiary:
(i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation
has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority
or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety,
product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to
result in a Material Adverse Effect.

 

(l)                
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued
by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as
described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a
Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice
of proceedings relating to the revocation or modification of any Material Permit.

 

    	 	11	 

     

    

 

(m)            
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective
businesses and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any
of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the
latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge
that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably
be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are
enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and
its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual
properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

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

 

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

 

    	 	12	 

     

    

 

(p)              
Sarbanes-Oxley; Internal Accounting Controls. Except as set forth in the SEC Reports, as of December 31, 2017, the
Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes- Oxley Act of 2002 that
are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder
that are effective as of the date hereof and as of the Closing Date and that are applicable to the Company. Except as set forth
in the SEC Reports, the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. Except as set forth in the SEC Reports, the Company and the Subsidiaries have established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed
such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures
of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange
Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures
based on their evaluations as of the Evaluation Date. Except as set forth on Schedule 3.1(p), since the Evaluation Date, there
have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) that have
materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company
and its Subsidiaries.

 

(q)              
Certain Fees. With the exception of the commission payable to Euro Pacific Capital, Inc., no brokerage or finder’s
fees or commissions are or will be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction
Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf
of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated
by the Transaction Documents.

 

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

 

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

 

    	 	13	 

     

    

 

(t)                
Registration Rights. Other than as disclosed in the SEC Reports, no Person has any right to cause the Company to
effect the registration under the Securities Act of any securities of the Company or any Subsidiaries.

 

(u)              
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. Except as set forth in the SEC Reports, the Company has not, in the 12 months preceding the date
hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth in the SEC
Reports, the Company is in compliance with all such listing and maintenance requirements.

 

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

 

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

 

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

 

    	 	14	 

     

    

 

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

 

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

 

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

 

(bb)          
Accountants. The Company’s accounting firm is Marcum. To the knowledge and belief of the Company, such accounting
firm: (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect
to the financial statements to be included in the Company’s Annual Report for the fiscal year ended December 31, 2017.

 

(cc)           
No Disagreements with Accountants and Lawyers. Except as set forth in the SEC Reports, there are no disagreements
of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and
lawyers formerly or presently employed by the Company and the Company is unaware of any reason why its accountants or lawyers
could not assist the Company with its obligations under any of the Transaction Documents.

 

    	 	15	 

     

    

 

(dd)          
Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that the
Purchasers are each acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby. The Company further acknowledges that the Purchasers are not acting as financial advisors
or fiduciaries of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
thereby and any advice given by the Purchasers or any of its representatives or agents in connection with the Transaction Documents
and the transactions contemplated thereby is merely incidental to each Purchaser’s purchase of the Securities. The Company
further represents to the Purchasers that the Company’s decision to enter into this Agreement and the other Transaction
Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
It is understood and acknowledged by the Company that (i) following the public disclosure of the transactions contemplated by
the Transaction Documents, in accordance with the terms thereof, none of the Purchasers have been asked by the Company or any
of its Subsidiaries to agree, nor has any Purchaser agreed with the Company or any of its Subsidiaries, to desist from effecting
any transactions in or with respect to (including, without limitation, purchasing or selling long) any securities of the Company,
or “derivative” securities based on securities issued by the Company or to hold any of the Securities for any specified
term; (ii) any Purchaser, and counterparties in “derivative” transactions to which any such Purchaser is a party,
directly or indirectly, presently may have a “short” position in the Common Stock which was established prior to such
Purchaser’s knowledge of the transactions contemplated by the Transaction Documents; and (iii) each Purchaser shall not
be deemed to have any affiliation with or control over any arm’s length counterparty in any “derivative” transaction.
The Company further understands and acknowledges that following the public disclosure of the transactions contemplated by the
Transaction Documents pursuant to the Press Release (as defined below) one or more Purchasers 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 and/or number of Conversion Shares deliverable with respect to the Securities are being determined and such hedging
and/or trading activities, if any, can reduce the value of the existing stockholders’ 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, Warrants or any other Transaction Document
or any of the documents executed in connection herewith or therewith.

 

(ee)           
Regulation M Compliance. The Company has not, (i) taken, directly or indirectly, any action designed to cause or
to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of
any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities,
or paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company,
other than, in the case of clauses (iii) and (iv), compensation paid to the Company’s placement agent in connection with
the placement of the Securities.

 

(ff)             
Stock Option Plans. Each compensatory stock option granted by the Company to a consultant or employee of 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..

 

    	 	16	 

     

    

 

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

 

(hh)          
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation
within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended.

 

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

 

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

 

(kk)       
Management. Except as set forth in Schedule 3.1(kk) hereto, during the past five-year period, no current
officer or director or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the Company or
any of its Subsidiaries has been the subject of:

 

(i)                
a petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver,
fiscal agent or similar officer for such Person, or any partnership in which such person was a general partner at or within two
years before the filing of such petition or such appointment, or any corporation or business association of which such person
was an executive officer at or within two years before the time of the filing of such petition or such appointment;

 

(ii)             
a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations
that do not relate to driving while intoxicated or driving under the influence);

 

(iii)           
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining any such person from, or otherwise limiting, the following activities:

 

    	 	17	 

     

    

 

(1)              
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor
broker, leverage transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or
an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as
an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company,
or engaging in or continuing any conduct or practice in connection with such activity;

 

(2)              
Engaging in any particular type of business practice; or

 

(3)              
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any
violation of securities laws or commodities laws;

 

(iv)            
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or
otherwise limiting for more than sixty (60) days the right of any such person to engage in any activity described in the preceding
sub paragraph, or to be associated with persons engaged in any such activity;

 

(v)              
a finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any
securities law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not
been subsequently reversed, suspended or vacated; or

 

(vi)            
a finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have
violated any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended
or vacated.

 

(ll)             
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 contemplated hereby, 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 Purchasers a copy of any disclosures provided
thereunder.

 

(mm)     
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 Purchasers or potential purchasers in connection with the
sale of the Securities.

 

    	 	18	 

     

    

 

3.2             
Representations and Warranties of each Purchaser. Each Purchaser hereby represents and warrants, severally and not
jointly, as of the date hereof and as of the Closing Date on which such Purchaser is purchasing Securities to the Company as follows
(unless as of a specific date therein):

 

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

 

(b)              
Own Account. Each Purchaser understands that the Securities are “restricted securities” and have not
been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for
its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the
Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation
of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable
state securities law. The Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

 

(c)              
Purchaser Status. At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is,
and on each date on which it exercises any Warrants it will be either: (i) an “accredited investor” as defined in
Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer”
as defined in Rule 144A(a) under the Securities Act.

 

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

 

(e)              
Reliance on Exemptions. Each Purchaser 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 Purchaser’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of such Purchaser to acquire the Securities.

 

    	 	19	 

     

    

 

(f)               
Information. Each Purchaser 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 Purchaser. Each Purchaser understands that its investment in the Securities involves a high degree of risk. Such Purchaser
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.

 

(g)              
No Governmental Review. Each Purchaser 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.

 

(h)              
General Solicitation. The Purchaser is not purchasing the Securities as a result of any advertisement, article,
notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

(i)                
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser
has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
the Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Other
than to other Persons party to this Agreement, the Purchaser has maintained the confidentiality of all disclosures made to it
in connection with this transaction (including the existence and terms of this transaction).

 

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

 

ARTICLE
IV

OTHER AGREEMENTS OF THE PARTIES

 

4.1             
Transfer Restrictions.

 

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

 

    	 	20	 

     

    

 

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

 

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

 

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

 

(c)              
Certificates evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section
4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under the Securities
Act, (ii) following any sale of such Underlying Shares pursuant to Rule 144, or (ii) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).
The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective Date if required
by the Transfer Agent to effect the removal of the legend hereunder or upon request of a Purchaser in compliance with Rule 144,
at no cost to the Purchaser. If all or any portion of a Warrant is exercised at a time when there is an effective registration
statement to cover the resale of the Underlying Shares, or if such Underlying Shares may be sold under Rule 144 without the requirement
for the Company to be in compliance with the current public information required under Rule 144 as to such Underlying Shares and
without volume or manner-of- sale restrictions or if such legend is not otherwise required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Underlying
Shares shall be issued free of all legends. The Company agrees that following the Effective Date or such time as such legend is
no longer required under this Section 4.1(c), it will, no later than three Trading Days following the delivery by a Purchaser
to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with a restrictive
legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to the Purchaser
a certificate representing such shares that is free from all restrictive and other legends. The Company may not make any notation
on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section
4. Certificates for Underlying Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the
Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed
by the Purchaser.

 

    	 	21	 

     

    

 

(d)              
In addition to the Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date
such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c),
$10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each
Trading Day after the Legend Removal Date until such certificate is delivered without a legend. Nothing herein shall limit the
Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities
as required by the Transaction Documents, and the Purchaser shall have the right to pursue all remedies available to it at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

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

 

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

  

4.3             
Furnishing of Information; Public Information. Until no Purchaser owns Securities, the Company covenants to maintain
the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

    	 	22	 

     

    

 

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

 

4.5             
Shareholder Approval. The Company will use commercially reasonable best efforts to have the Transaction Documents
approved by the Company’s shareholders in accordance with Nasdaq continued listing requirements. Concurrently with seeking
approval for the Transaction Documents, the Company will seek approval for an additional transaction or series of transactions
with such terms and conditions as mutually agreed between the Company and the Purchasers.

 

4.6             
Disclosure of Transactions and Other Material Information.

 

(a)              
Disclosure of Transaction. On or before 9:30 a.m., New York time, on the second (2nd) Business Day after
the date of this Agreement, the Company shall file a Current Report on Form 8-K describing all the material terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the material Transaction Documents
(including, without limitation, this Agreement) (including all attachments, the “8-K Filing”). From and after
the filing of the 8-K Filing, the Company shall have disclosed all material, non-public information (if any) provided to any of
the Purchasers by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in
connection with the transactions contemplated by the Transaction Documents. 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, affiliates, employees
or agents, on the one hand, and any of the Purchasers or any of their affiliates, on the other hand, shall terminate.

 

(b)              
Limitations on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each
of its and their respective officers, directors, employees and agents not to, provide any Purchaser with any material, non-public
information regarding the Company or any of its Subsidiaries from and after the date hereof without the express prior written
consent of such Purchaser (which may be granted or withheld in such Purchaser’s sole discretion). Subject to the foregoing,
neither the Company, its Subsidiaries nor any Purchaser shall issue any press releases or any other public statements with respect
to the transactions contemplated hereby; provided, however, the Company shall be entitled, without the prior approval of any Purchaser,
to make the Press Release and 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 Purchaser shall be consulted by the Company in connection with any such press release or other
public disclosure prior to its release). Without the prior written consent of the applicable Purchaser (which may be granted or
withheld in such Purchaser’s sole discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates
to not) disclose the name of such Purchaser in any filing, announcement, release or otherwise.

 

    	 	23	 

     

    

 

(c)              
Other Confidential Information. Disclosure Failures; Disclosure Delay Payments. In addition to other remedies set
forth in this Section 4.6, and without limiting anything set forth in any other Transaction Document, at any time after
the Closing Date if the Company, any of its Subsidiaries, or any of their respective officers, directors, employees or agents,
provides any Purchaser with material non-public information relating to the Company or any of its Subsidiaries (each, the “Confidential
Information”), other than pursuant to a non-disclosure agreement between the Company and the Purchaser, the Company
shall, on or prior to the applicable Required Disclosure Date (as defined below), publicly disclose such Confidential Information
on a Current Report on Form 8-K or otherwise (each, a “Disclosure”). From and after such Disclosure, the Company
shall have disclosed all Confidential Information provided to such Purchaser by the Company or any of its Subsidiaries or any
of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon such Disclosure, 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, affiliates, employees or agents, on the one hand, and any of the Purchasers or any of their affiliates,
on the other hand, shall terminate. In the event that the Company fails to effect such Disclosure on or prior to the Required
Disclosure Date and such Purchaser shall have possessed Confidential Information for at least ten (10) consecutive Trading Days
(each, a “Disclosure Failure”), then, as partial relief for the damages to such Purchaser by reason of any
such delay in, or reduction of, its ability to buy or sell shares of Common Stock after such Required Disclosure Date (which remedy
shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to such Purchaser an amount
in cash equal to the greater of (I) two percent (2%) of the aggregate Purchase Price and (II) the applicable Disclosure Restitution
Amount, on each of the following dates (each, a “Disclosure Delay Payment Date”): (i) on the date of such Disclosure
Failure and (ii) on every thirty (30) day anniversary such Disclosure Failure until the earlier of (x) the date such Disclosure
Failure is cured and (y) such time as all such non-public information provided to such Purchaser shall cease to be Confidential
Information (as evidenced by a certificate, duly executed by an authorized officer of the Company to the foregoing effect) (such
earlier date, as applicable, a “Disclosure Cure Date”). Following the initial Disclosure Delay Payment for
any particular Disclosure Failure, without limiting the foregoing, if a Disclosure Cure Date occurs prior to any thirty (30) day
anniversary of such Disclosure Failure, then such Disclosure Delay Payment (prorated for such partial month) shall be made on
the third (3rd) Business Day after such Disclosure Cure Date. The payments to which an Purchaser shall be entitled pursuant to
this Section 4.6 are referred to herein as “Disclosure Delay Payments.” In the event the Company fails to make
Disclosure Delay Payments in a timely manner in accordance with the foregoing, such Disclosure Delay Payments shall bear interest
at the rate of two percent (2%) per month (prorated for partial months) until paid in full.

 

(d)              
For the purpose of this Agreement the following definitions shall apply: 

 

    	 	24	 

     

    

 

(i)                
“Disclosure Failure Market Price” means, as of any Disclosure Delay Payment Date, the price computed
as the quotient of (I) the sum of the five (5) highest VWAPs (as defined in the Notes) of the Common Stock during the applicable
Disclosure Restitution Period (as defined below), divided by (II) five (5) (such period, the “Disclosure Failure Measuring
Period”). All such determinations to be appropriately adjusted for any share dividend, share split, share combination,
reclassification or similar transaction that proportionately decreases or increases the Common Stock during such Disclosure Failure
Measuring Period.

 

(ii)             
“Disclosure Restitution Amount” means, as of any Disclosure Delay Payment Date, the product of (x) difference
of (I) the Disclosure Failure Market Price less (II) the lowest purchase price, per share of Common Stock, of any Common Stock
issued or issuable to such Purchaser pursuant to this Agreement or any other Transaction Documents, multiplied by (y) 10% of the
aggregate daily dollar trading volume (as reported on Bloomberg (as defined in the Notes)) of the Common Stock on the Principal
Market for each Trading Day either (1) with respect to the initial Disclosure Delay Payment Date, during the period commencing
on the applicable Required Disclosure Date through and including the Trading Day immediately prior to the initial Disclosure Delay
Payment Date or (2) with respect to each other Disclosure Delay Payment Date, during the period commencing the immediately preceding
Disclosure Delay Payment Date through and including the Trading Day immediately prior to such applicable Disclosure Delay Payment
Date (such applicable period, the “Disclosure Restitution Period”).

 

(iii)           
“Required Disclosure Date” means (x) if such Purchaser authorized the delivery of such Confidential
Information, either (I) if the Company and such Purchaser have mutually agreed upon a date (as evidenced by an e-mail or other
writing) of Disclosure of such Confidential Information, such agreed upon date or (II) otherwise, the seventh (7th)
calendar day after the date such Purchaser first received any Confidential Information or (y) if such Purchaser did not authorize
the delivery of such Confidential Information, the first (1st) Business Day after such Purchaser’s receipt of
such Confidential Information.

 

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

 

    	 	25	 

     

    

 

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

 

4.9             
Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for working capital
purposes and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt, (b) for the redemption
of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA
or OFAC regulations.

 

4.10         
Indemnification of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify
and hold each Purchaser and its directors, officers, shareholders, members and partners (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls
the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, shareholders, members or partners (and any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any the
Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is
not an Affiliate of the Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of the Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings the Purchaser Party may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct by the Purchaser Party which constitutes fraud, gross negligence,
willful misconduct or malfeasance).

 

If any action shall
be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, the Purchaser Party
shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel
of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense
of the Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in
such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of
the Company and the position of the Purchaser Party, in which case the Company shall be responsible for the reasonable fees and
expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement
(x) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (y) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by the Purchaser Party
in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.10 shall be made
by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or
are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser
Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

 

    	 	26	 

     

    

 

4.11         
Listing of Securities.

 

(a)               
The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction
Documents 250% of such amount as may from time to time be required to fulfill its obligations in full under the Transaction Documents
and shall confirm and adjust the adequacy of such reserve at least monthly.

 

(b)               
If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the
Required Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s
certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least
the Required Minimum at such time, as soon as possible and in any event not later than the 90th day after such date.

 

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

 

4.12         
Certain Transactions and Confidentiality.

 

(a)              
Each Purchaser covenants, severally and not jointly, that neither it, nor any Affiliate acting on its behalf or pursuant
to any understanding with it will execute any Short Sales of any of the Company’s securities during the period commencing
with the execution of this Agreement and ending on the earlier of (i) the Maturity Date of the Notes and (ii) the date such Purchaser’s
Notes are no longer outstanding.

 

(b)              
Each Purchaser covenants, severally and not jointly, that until such time as the transactions contemplated by this Agreement
are publicly disclosed by the Company, the Purchaser will maintain the confidentiality of the existence and terms of this transaction
and the information included in the Transaction Documents and the Disclosure Schedules.

 

(c)              
Except as set forth in Sections 4.12(a) and 4.12(b) above, the Company expressly acknowledges and agrees
that (i) the Purchasers shall not be restricted from effecting transactions in any securities of the Company in accordance with
applicable securities laws after the time that the transactions contemplated by this Agreement are first publicly announced, and
(ii) the Purchaser shall not have any duty of confidentiality to the Company or its Subsidiaries after the transactions contemplated
by this Agreement are first publicly announced.

 

    	 	27	 

     

    

 

4.13         
Form D; Blue Sky Filings. The Company shall file a Form D with respect to the Securities as required under Rule
506 of Regulation D and to provide a copy thereof to each Purchaser promptly after such filing. Without limiting any other obligation
of the Company under this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the
Securities required under all applicable securities laws (including, without limitation, all applicable federal securities laws
and all applicable “Blue Sky” laws), and the Company shall comply with all applicable foreign, federal, state and
local laws, statutes, rules, regulations and the like relating to the offering and sale of the Securities to the Purchasers and
shall provide evidence of any such action so taken to the Purchasers and the placement agent.

  

4.14         
Offerings of Variable Rate Securities. Save for the compliance with Company’s obligations to Leviston Resources
LLC pursuant to a certain Equity Purchase Agreement dated 8 February 2018 or any equity structure which is on terms equal to or
better than that provided in the aforementioned Equity Purchase Agreement (collectively, the “Equity Agreement”),
until the expiration of 12 months from the final Closing Date of Securities sold hereunder, the Company shall not, directly or
indirectly, (i) issue or sell any convertible securities either (A) at a conversion, exercise or exchange rate or other price
that is based upon and/or varies with the trading prices of, or quotations for, the shares of Common Stock at any time after the
initial issuance of such convertible securities, or (B) with a conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such convertible securities or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the market for the Common Stock, or (ii) enter into any
agreement (including, without limitation, an “equity line of credit” or an “at-the-market offering”) whereby
the Company or any of its subsidiaries may sell securities at a future determined price (other than standard and customary “preemptive”
or “participation” rights). Notwithstanding the foregoing, the Company shall not make any sales pursuant to the Equity
Agreement until the expiration of 12 months from the final Closing Date of Securities sold hereunder, without the prior written
consent of each Purchaser. The Purchasers shall be entitled to obtain injunctive relief against the Company and its subsidiaries
to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

 

4.15         
Reporting Status. Until the date on which the Purchasers shall have sold all of the Underlying Securities (the “Reporting
Period”), the Company shall timely file 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.

 

    	 	28	 

     

    

  

ARTICLE
V

MISCELLANEOUS

 

5.1             
Termination. This Agreement may be terminated by Purchasers purchasing a majority in interest of the Notes at the
Closing as to the Purchasers’ obligations hereunder only and without any effect whatsoever on the obligations between the
Company and the other Purchaser, by written notice to the other parties, if the Closing has not been consummated on or before
April 25, 2017; provided, however, that such termination will not affect the right of any party to sue for any breach by any other
party (or parties).

 

5.2             
Fees and Expenses. The Company shall reimburse Purchasers or their counsel for attorney’s fees and expenses
for the transactions contemplated by this Agreement, in an amount of $15,000 in the aggregate. The Company shall deliver to the
Purchasers, prior to the Closing, a completed and executed copy of the Closing Statement, attached hereto as Annex A. The Company
shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction
letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Purchaser. The Company shall also be directly responsible for the payment
any fees or commissions payable to the placement agent for the offering, Aegis Capital Corp.

 

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

 

5.4             
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto at or prior
to 4:00 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 4:00 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading
Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt
by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth
on the signature pages attached hereto.

 

5.5             
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a
written instrument signed, in the case of an amendment, by each of the Company and 80% in interest of the Notes or, in the case
of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission
of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

5.6             
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not
be deemed to limit or affect any of the provisions hereof.

 

5.7             
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of a majority in interest of the Notes (other than by merger). A Purchaser may assign any or all of its rights under this
Agreement to any Person to whom the Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing
to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchaser.”

 

    	 	29	 

     

    

 

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

 

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

 

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

 

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

 

5.12         
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions
set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to
be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

    	 	30	 

     

    

 

5.13         
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any
similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided,
then the Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

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

 

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

 

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

 

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

 

    	 	31	 

     

    

 

5.18         
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing
under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated
damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial
liquidated damages or other amounts are due and payable shall have been canceled

s

5.19         
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of
any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.

 

5.20         
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity
to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be
subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.

 

5.21         
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

5.22         
Exculpation Among Purchasers. Each Purchaser acknowledges that it is not relying upon any person or entity, other
than the Company and its representatives, in making its investment or decision to invest in the Company. Each Purchaser agrees
that no Purchaser nor the respective controlling persons, officers, directors, partners, members, agents, or employees of any
Purchaser shall be liable to any other Purchaser for any action heretofore or hereafter taken or omitted to be taken by any of
them in connection with the purchase of the Securities.

 

(Signature Pages
Follow)

 

    	 	32	 

     

    

 

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

 

	PRECIPIO, INC.	Address for Notice:
	 	 	 	 	 
	By:  	 	 	 	Fax:
	 	Name:	 	 	 
	 	Title:	 	 	 

 

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

 

Goodwin
Proctor LLP

620
Eight Avenue

New
York, NY 10018

Attn.:
Stephen M. Davis, Esq.

Facsimile:
(212) 813-8804

  

 

[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

    	 	33	 

     

    

 

PURCHASER SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT

 

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

 

Name
of Purchaser:

 

	Signature
    of Authorized Signatory of Purchaser:	 

 

	Name of Authorized Signatory:	 

 

	Title of Authorized Signatory:	 

 

	Email Address of Authorized Signatory:	 

 

	Facsimile Number of Authorized Signatory:	 

 

	Address for Notice to Purchaser:	 

 

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

 

	Subscription Amount:	 	 

 

	EIN Number:	 	 

 

	Wire Instructions:	 	 

  

[SIGNATURE PAGES
CONTINUE] 

 

    	 	34	 

     

    

 

Annex A

 

CLOSING STATEMENT

 

Pursuant
to the attached Securities Purchase Agreement, dated as of April____, 2018, the Purchasers shall purchase $1,809,400 principal
amount of Notes from Precipio, Inc., a Delaware corporation (the “Company”), FOR A TOTAL PURCHASE PRICE OF $1,660,000.
All funds will be wired into an account maintained by the Company. All funds will be disbursed in accordance with this Closing
Statement.

 

Disbursement
Date: April            , 2018

  

 

 

PURCHASE PRICE

 

	 	Gross Proceeds to be Received	$1,660,000

 

	I.  	DISBURSEMENTS

 

 

	Precipio, Inc.	 	$	1,529,000	 
	Euro Pacific Capital, Inc.	 	$	116,000	 
	Sichenzia Ross Ference Kesner LLP	 	$	15,000	 

 

	 	Total
    Amount Disbursed:	$1,660,000.00

 

 

	PRECIPIO, INC.	 	 
	 	 	 	 
	 	 	 	 
	By: 	 	 	 
	 	Name:	 	 
	 	Title:	 	 

 

	[INVESTORS]	 	 
	 	 	 	 
	 	 	 	 
	By:	 	 	 
	 	Name:	 	 
	 	Title:	 	 

  

    	 	 	 

     

    

 

SCHEDULE A

SCHEDULE
OF INVESTORS

 

	Name
    and Address	Amount

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00282-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00282-of-00352.parquet"}]]