Document:

Exhibit 4.2

 

[FORM OF WARRANT]

 

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

 

Net
Element, INC.

 

Warrant
To Purchase Common Stock

 

Warrant No.:                   

Number of Shares of Common Stock:_____________

Date of Issuance: [           ]1
("Issuance Date")

 

Net Element, Inc., a Delaware
corporation (the "Company"), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, [BUYER], the registered holder hereof or its permitted
assigns (the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company, at the
Exercise Price (as defined below) then in effect, at any time or times on or after the Issuance Date, but not after 11:59 p.m.,
New York time, on the Expiration Date, (as defined below), ______________ (_____________)2 fully paid nonassessable
shares of Common Stock, subject to adjustment as provided herein (the "Warrant Shares"). Except as otherwise
defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued
in exchange, transfer or replacement hereof, this "Warrant"), shall have the meanings set forth in Section 17.
This Warrant is one of the Warrants to purchase Common Stock (the "SPA Warrants") issued pursuant to Section 1
of that certain Securities Purchase Agreement, dated as of April 30, 2015 (the "Subscription Date"), by and among
the Company and the investors (the "Buyers") referred to therein (the "Securities Purchase Agreement").
Capitalized terms used herein and not otherwise defined shall have the definitions ascribed to such terms in the Securities Purchase
Agreement.

 

 

1 [INSERT IN INITIAL WARRANTS:
April 30, 2015] [INSERT IN ADDITIONAL WARRANTS: the applicable Additional Closing Date (as defined in the Securities
Purchase Agreement)]

 

2 [INSERT
IN INITIAL NOTES: Insert 88% of the number of shares of Common Stock issuable upon conversion of the Initial Notes purchased
by the Holder pursuant to the Securities Purchase Agreement.] [INSERT IN ADDITIONAL NOTES: Insert 88% of the number of shares
of Common Stock issuable upon conversion of the Additional Notes purchased by the Holder pursuant to the Securities Purchase Agreement.]

 

    	 

    	 

    

  

1.          EXERCISE
OF WARRANT.

 

(a)         Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Issuance Date, in whole or in part, by
(i) delivery of a written notice, in the form attached hereto as Exhibit A (the "Exercise Notice"),
of the Holder's election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal to the applicable
Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the "Aggregate Exercise
Price") in cash by wire transfer of immediately available funds or (B) if the provisions of Section 1(d) are applicable,
by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The
Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of
the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the
first (1st) Trading Day following the date on which the Company has received the Exercise Notice, the Company shall
transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company's transfer
agent (the "Transfer Agent"). On or before the third (3rd) Trading Day following the date on which the Company
has received the Exercise Notice, so long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise)
on or prior to the second (2nd) Trading Day following the date on which the Company has received the Exercise Notice (the "Share
Delivery Date") (provided that if the Aggregate Exercise Price has not been delivered by such date, the Share Delivery
Date shall be one (1) Trading Day after the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered), the Company
shall (x) provided that the Warrant Shares are subject to an effective resale registration statement in favor of the Holder or,
if exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate resale of the Warrant Shares by the
Holder, or (Y) if the Warrant Shares are not subject to an effective resale registration statement in favor of the Holder and,
if exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate resale of the Warrant Shares by the
Holder, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's
or its designee's balance account with The Depository Trust Company ("DTC") through its Deposit / Withdrawal At
Custodian system, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall
be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant
Shares via DTC, if any. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such
Warrant Shares are credited to the Holder's DTC account or the date of delivery of the certificates evidencing such Warrant Shares,
as applicable. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant
Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise,
then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any exercise and at its own
expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares
issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant
is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant
Shares to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes which may be payable
with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company's obligations to issue and
deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are absolute and unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery
of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination.

 

    	- 2 -

    	 

    

  

(b)         Exercise
Price. For purposes of this Warrant, "Exercise Price" means $[ ]3, subject to adjustment as provided
herein.

 

(c)          Company's
Failure to Timely Deliver Securities. If the Company for any reason or for no reason shall fail (I) on or prior to the Share
Delivery Date to credit the Holder's balance account with DTC if the Warrant Shares are subject to an effective resale registration
statement in favor of the Holder or, if exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate
resale of the Warrant Shares by the Holder, or issue and deliver to the Holder a certificate if the Warrant Shares are not subject
to an effective resale registration statement in favor of the Holder and, if exercised via Cashless Exercise, at a time when Rule
144 would not be available for immediate resale of the Warrant Shares by the Holder, for such number of shares of Common Stock
to which the Holder is entitled upon the Holder's exercise of this Warrant or (II) if the Registration Statement (as defined in
the Registration Rights Agreement) covering the resale of the Warrant Shares that are the subject of the Exercise Notice (the "Unavailable
Warrant Shares") is not available for the resale of such Unavailable Warrant Shares, to promptly, but in no event later
than as required pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) deliver the Warrant Shares electronically
without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to
such exercise to the Holder's or its designee's balance account with DTC through its Deposit / Withdrawal At Custodian system (the
event described in the immediately foregoing clause (II) is hereinafter referred as a "Notice Failure" and together
with the event described in clause (I) above, an "Exercise Failure"), then, in addition to all other remedies
available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and during such
Exercise Failure an amount equal to 1.5% of the product of (A) the sum of the number of shares of Common Stock not issued to the
Holder on or prior to the Share Delivery Date and to which the Holder is entitled, and (B) any trading price of the Common Stock
selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise Date and ending
on the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice with
respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to
such Exercise Notice; provided that the voiding of an Exercise Notice shall not affect the Company's obligations to make any payments
which have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise. In addition to the foregoing, if
on or prior to the Share Delivery Date the Company shall fail to credit the Holder's balance account with DTC if the Warrant Shares
are subject to an effective resale registration statement in favor of the Holder or, if exercised via Cashless Exercise, at a time
when Rule 144 would be available for immediate resale of the Warrant Shares by the Holder, or to issue and deliver a certificate
to the Holder if the Warrant Shares are not subject to an effective resale registration statement in favor of the Holder and, if
exercised via Cashless Exercise, at a time when Rule 144 would not be available for immediate resale of the Warrant Shares by the
Holder, for the number of shares of Common Stock to which the Holder is entitled upon the Holder's exercise hereunder or pursuant
to the Company's obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Trading Day
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a "Buy-In"),
then the Company shall, within three (3) Trading Days after the Holder's request and in the Holder's discretion, either (i) pay
cash to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any) for the shares of Common Stock so purchased (the "Buy-In Price"), at which point the Company's
obligation to credit such Holder's balance account with DTC or issue and deliver such certificate, as applicable, for such shares
of Common Stock shall terminate, or (ii) promptly honor its obligation to credit such Holder's balance account with DTC or issue
and deliver to the Holder a certificate, as applicable, for such shares of Common Stock and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) any trading
price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable
Exercise Date and ending on the applicable Share Delivery Date. Nothing shall limit the Holder's right to pursue any other remedies
available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company's failure to timely deliver certificates representing shares of Common Stock (or to electronically
deliver such shares of Common Stock) upon the exercise of this Warrant as required pursuant to the terms hereof.

 

 

3 [INSERT IN INITIAL WARRANTS:
Insert $1.74.]

[INSERT IN ADDITIONAL WARRANTS: Insert price equal to 150%
of the lowest of (i) the arithmetic average of the Weighted Average Prices of the Common Stock during the thirty (30) Trading Days
immediately prior to the date of the applicable Buyer Additional Closing Notice (as defined in the Securities Purchase Agreement),
(ii) the arithmetic average of the Weighted Average Prices of the Common Stock during the fifteen (15) Trading Days immediately
prior to the date of the applicable Buyer Additional Closing Notice and (iii) the last Closing Bid Price of the Common Stock immediately
prior to the date of the applicable Buyer Additional Closing Notice.]

 

    	- 3 -

    	 

    

 

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

 

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

D

 

For purposes of
the foregoing formula:

 

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

 

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

 

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

 

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

 

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

 

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

 

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(f)           Limitations
on Exercises.

 

(i)          Beneficial Ownership.
Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion of this Warrant,
and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant
and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise,
the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the "Maximum
Percentage") of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. For
purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other
Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus
the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining,
unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or
conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any
convertible notes or convertible preferred stock or warrants, including the other SPA Warrants) beneficially owned by the Holder
or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this
Section 1(f)(i). For purposes of this Section 1(f)(i), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "1934 Act"). For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the
Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company's most
recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities
and Exchange Commission (the "SEC"), as the case may be, (y) a more recent public announcement by the Company
or (z) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding
(the "Reported Outstanding Share Number"). If the Company receives an Exercise Notice from the Holder at a time
when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall
(i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise
Notice would otherwise cause the Holder's beneficial ownership, as determined pursuant to this Section 1(f)(i), to exceed the Maximum
Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise
Notice (the number of shares by which such purchase is reduced, the "Reduction Shares") and (ii) as soon as reasonably
practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason
at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in
writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was
reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder
and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number
of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which
the Holder's and the other Attribution Parties' aggregate beneficial ownership exceeds the Maximum Percentage (the "Excess
Shares") shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote
or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null
and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of
a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first
(61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of
9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the
sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply
only to the Holder and the other Attribution Parties and not to any other holder of SPA Warrants that is not an Attribution Party
of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of
the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section
13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any
effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 1(f)(i) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective
or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f)(i) or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived
and shall apply to a successor holder of this Warrant.

 

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(ii)          Principal Market
Regulation. The Company shall not be obligated to issue any shares of Common Stock upon exercise of this Warrant and the Holder
shall not have the right to receive upon exercise of this Warrant any shares of Common Stock if the issuance of such shares of
Common Stock would exceed that number of shares of Common Stock which the Company may issue upon exercise of the SPA Warrants or
otherwise without breaching the Company's obligations under any applicable rules or regulations of any applicable Eligible Market
(the "Exchange Cap"), except that such limitation shall not apply in the event that the Company (x) obtains the
approval of its stockholders as required by the applicable rules of the Eligible Market for issuances of shares of Common Stock
in excess of such amount or (y) obtains a written opinion from outside counsel to the Company that such approval is not required,
which opinion shall be reasonably satisfactory to the Required Holders. Until such approval or written opinion is obtained, no
Holder shall be issued in the aggregate, upon exercise of any SPA Warrants, shares of Common Stock in an amount greater than the
product of the Exchange Cap multiplied by a fraction, the numerator of which is the total number of shares of Common Stock underlying
the SPA Warrants issued to such Holder pursuant to the Securities Purchase Agreement on the Issuance Date and the denominator of
which is the aggregate number of shares of Common Stock underlying the SPA Warrants issued to the Buyers pursuant to the Securities
Purchase Agreement on the Issuance Date (with respect to each Holder, the "Exchange Cap Allocation"). In the event
that any Holder shall sell or otherwise transfer any of such Holder's SPA Warrants, the transferee shall be allocated a pro rata
portion of such Holder's Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with
respect to the portion of the Exchange Cap Allocation allocated to such transferee. In the event that any holder of SPA Warrants
shall exercise all of such holder's SPA Warrants into a number of shares of Common Stock which, in the aggregate, is less than
such holder's Exchange Cap Allocation, then the difference between such holder's Exchange Cap Allocation and the number of shares
of Common Stock actually issued to such holder shall be allocated to the respective Exchange Cap Allocations of the remaining holders
of SPA Warrants on a pro rata basis in proportion to the shares of Common Stock underlying the SPA Warrants then held by each such
holder. In the event that the Company is prohibited from issuing any Warrant Shares for which an Exercise Notice has been received
as a result of the operation of this Section 1(f)(ii), then unless the Holder elects to void such exercise, the Holder may require
the Company to pay to the Holder within three (3) Trading Days of the applicable attempted exercise, cash in an amount equal to
the product of (i) the quotient determined by dividing (x) the number of Warrant Shares that the Company is unable to deliver pursuant
to this Section 1(f)(ii), by (y) the total number of Warrant Shares issuable upon exercise of this Warrant (without regard to any
limitations or restrictions on exercise of this Warrant) and (ii) the Black Scholes Value; provided, that (x) references to "the
day immediately following the public announcement of the applicable Fundamental Transaction" in the definition of "Black
Scholes Value" shall instead refer to "the date the Holder exercises this Warrant and the Company cannot deliver the
required number of Warrant Shares because of the Exchange Cap" and (y) clause (iii) of the definition of "Black Scholes
Value" shall instead refer to "the underlying price per share used in such calculation shall be the highest Weighted
Average Price during the period beginning on the date of the applicable date of exercise and the date that the Company makes the
applicable cash payment."

 

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(g)          Insufficient
Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least
a number of shares of Common Stock equal to 130% of the number of shares of Common Stock as shall from time to time be necessary
to effect the exercise of all of this Warrant then outstanding (the "Required Reserve Amount" and the failure
to have such sufficient number of authorized and unreserved shares of Common Stock, an "Authorized Share Failure"),
then the Company shall immediately take all action necessary to increase the Company's authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding. Without limiting
the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure,
but in no event later than seventy-five (75) days after the occurrence of such Authorized Share Failure, the Company shall hold
a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit
its stockholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend
to the stockholders that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure,
the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding Common Stock to approve
the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent
and submitting for filing with the SEC an Information Statement on Schedule 14C. In the event that upon any exercise of this Warrant,
the Company does not have sufficient authorized shares to deliver in satisfaction of such exercise, then unless the Holder elects
to void such attempted exercise, the Holder may require the Company to pay to the Holder within three (3) Trading Days of the applicable
exercise, cash in an amount equal to the product of (i) the quotient determined by dividing (x) the number of Warrant Shares that
the Company is unable to deliver pursuant to this Section 1(g), by (y) the total number of Warrant Shares issuable upon exercise
of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant) and (ii) the Black Scholes Value;
provided, that (x) references to "the day immediately following the public announcement of the applicable Fundamental Transaction"
in the definition of "Black Scholes Value" shall instead refer to "the date the Holder exercises this Warrant and
the Company cannot deliver the required number of Warrant Shares because of an Authorized Share Failure" and (y) clause (iii)
of the definition of "Black Scholes Value" shall instead refer to "the underlying price per share used in such calculation
shall be the highest Weighted Average Price during the period beginning on the date of the applicable date of exercise and the
date that the Company makes the applicable cash payment."

 

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(h)          Mandatory
Exercise at the Company's Election.

 

(i)          If
at any time and from time to time after the date that no SPA Securities continue to be outstanding (the "Note Termination
Date"), if no Equity Conditions Failure has occurred and the Weighted Average Price of the Common Stock exceeds 125% of
the Exercise Price as in effect on the Issuance Date for forty (40) consecutive Trading Days after the Note Termination Date (the
"Price Condition"), the Company shall have the right, for so long as there is no Equity Conditions Failure and
the Price Condition is satisfied, to require the Holder and all, but not less than all, holders of the other SPA Warrants issued
on [INSERT IN INITIAL WARRANTS: the Initial Closing Date (as defined in the Securities Purchase Agreement)] [INSERT IN
ADDITIONAL WARRANTS: all Additional Closing Dates (as defined in the Securities Purchase Agreement] to exercise on a pro rata
basis this Warrant and such other applicable SPA Warrants for a number of Warrant Shares equal in the aggregate to no more than
25% of the number of Warrant Shares underlying this Warrant and the other applicable SPA Warrants issued on [INSERT IN INITIAL
WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing Dates] (the "Mandatory
Exercise Cap") on the Mandatory Exercise Date (as defined below) into fully paid, validly issued and nonassessable shares
of Common Stock in accordance with Section 1(a) hereof at the Exercise Price in effect as of such Mandatory Exercise Date
(a "Mandatory Exercise"). The Company may exercise its right to require exercise under this Section 1(h) by delivering
a written notice thereof by facsimile or electronic mail and overnight courier to the Holder and all, but not less than all, of
the holders of the other applicable SPA Warrants issued on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT
IN ADDITIONAL WARRANTS: all Additional Closing Date] and the Transfer Agent (a "Mandatory Exercise Notice"
and each date the Holder and all the holders of such applicable other SPA Warrants received such notice is referred to as the "Mandatory
Exercise Notice Date"). Each Mandatory Exercise Notice shall be irrevocable. Each Mandatory Exercise Notice shall (i)
state (a) the Trading Day on which such Mandatory Exercise shall occur, which Trading Day shall be the third (3rd) Trading
Day immediately following such Mandatory Exercise Notice Date (a "Mandatory Exercise Date"), (b) the aggregate
number of Warrant Shares subject to Mandatory Exercise from the Holder and all holders of the other applicable SPA Warrants issued
on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing
Dates], which number, together with the number of Warrant Shares underlying this Warrant and any applicable SPA Warrants issued
on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing
Dates] subject to any Mandatory Exercise preceding the applicable Mandatory Exercise shall not exceed the Mandatory Exercise Cap
(the "Mandatory Exercise Amount") pursuant to this Section 1(h) (and analogous provisions under such other SPA
Warrants), (c) the number of shares of Common Stock to be issued to the Holder on such Mandatory Exercise Date and (d) the number
of issued and outstanding shares as of such Mandatory Exercise Notice Date and (ii) certify that there has been no Equity
Conditions Failure as of such Mandatory Exercise Notice Date and that the Price Condition has been satisfied. If the Company confirmed
that there was no such Equity Conditions Failure as of the Mandatory Exercise Notice Date and that the Price Condition has been
satisfied as of such Mandatory Exercise Notice Date but an Equity Conditions Failure occurs between such Mandatory Exercise Notice
Date and any time through the Mandatory Exercise Date (a "Mandatory Exercise Interim Period") and/or the Price
Condition ceases to be satisfied at any time during such Mandatory Exercise Interim Period (a "Mandatory Exercise Failure"),
the Company shall provide the Holder and each holder of the other applicable SPA Warrants issued on [INSERT IN INITIAL WARRANTS:
the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing Dates] a subsequent notice to that effect.
If there is a Mandatory Exercise Failure (which is not waived in writing by the Holder) during such Mandatory Exercise Interim
Period, then the Mandatory Exercise shall be null and void with respect to all or any part designated by the Holder of the unexercised
Mandatory Exercise Amount subject to the Mandatory Exercise and the Holder shall be entitled to all the rights of a holder of this
Warrant with respect to such Mandatory Exercise Amount of this Warrant. The Company may not effect more than five (5) Mandatory
Exercise under this Warrant and the other applicable SPA Warrants issued on [INSERT IN INITIAL WARRANTS: the Initial Closing
Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing Dates]. Notwithstanding anything to the contrary in this Section
1(h), until the Mandatory Exercise has occurred, the Mandatory Exercise Amount of this Warrant subject to the Mandatory Exercise
may be exercised, in whole or in part, by the Holder into shares of Common Stock pursuant to Section 1(a). All exercises of this
Warrant by the Holder after the Mandatory Exercise Notice Date shall reduce the Mandatory Exercise Amount required to be exercised
on the Mandatory Exercise Date, unless the Holder otherwise indicates in the applicable Exercise Notice.

 

    	- 8 -

    	 

    

  

(ii)         If
the Company elects to cause a Mandatory Exercise pursuant to Section 1(h)(i), then it must simultaneously take the same action
in the same proportion with respect to all of the other SPA Warrants issued on [INSERT IN INITIAL WARRANTS: the Initial
Closing Date] [INSERT IN ADDITIONAL WARRANTS: any Additional Closing Date]. For the avoidance of doubt, if the Company elects
a Mandatory Exercise of this Warrant pursuant to Section 1(h)(i) (or similar provisions under the other SPA Warrants issued on
[INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: any Additional Closing Date])
with respect to less than all of the Warrant Shares underlying such SPA Warrants then outstanding, then the Company shall require
exercise of a number of Warrant Shares underlying such SPA Warrants from the Holder and each of the holders of the other SPA Warrants
issued on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: any Additional Closing
Date] equal to the product of (i) the aggregate number of Warrant Shares which the Company has elected to cause to be exercised
pursuant to Section 1(h)(i), multiplied by (ii) the fraction, the numerator of which is the sum of the aggregate number of Warrant
Shares underlying the SPA Warrant issued to such holder pursuant to the Securities Purchase Agreement on [INSERT IN INITIAL
WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: any Additional Closing Date] and the denominator
of which is the sum of the aggregate number of Warrant Shares underlying the SPA Warrants issued to all holders pursuant to the
Securities Purchase Agreement on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS:
all Additional Closing Dates] (such fraction with respect to each holder is referred to as its "Exercise Allocation Percentage,"
and such amount with respect to each holder is referred to as its "Pro Rata Exercise Amount"); provided,
however, that in the event that any holder's Pro Rata Exercise Amount exceeds the outstanding number of such applicable
SPA Warrants, then such excess Pro Rata Exercise Amount shall be allocated amongst the remaining holders of SPA Warrants issued
on [INSERT IN INITIAL WARRANTS: the Initial Closing Date] [INSERT IN ADDITIONAL WARRANTS: all Additional Closing
Dates] in accordance with the foregoing formula. In the event that the initial holder of any SPA Warrants shall sell or otherwise
transfer any of such holder's SPA Warrants, the transferee shall be allocated a pro rata portion of such holder's Exercise Allocation
Percentage and Pro Rata Exercise Amount.

 

    	- 9 -

    	 

    

  

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

 

(a)          Adjustment
Upon Issuance of Shares of Common Stock. If and whenever on or after the Subscription Date, the Company issues or sells, or
in accordance with this Section 2 is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale
of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock deemed to have
been issued or sold by the Company in connection with any Excluded Securities for a consideration per share (the "New Issuance
Price") less than a price (the "Applicable Price") equal to the Exercise Price in effect immediately
prior to such issue or sale or deemed issuance or sale (the foregoing a "Dilutive Issuance"), then immediately
after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price.
Upon each such adjustment of the Exercise Price hereunder, the number of Warrant Shares issuable immediately prior to such Dilutive
Issuance shall be adjusted to the number of shares of Common Stock determined by multiplying the Exercise Price then in effect
immediately prior to such adjustment by the number of Warrant Shares acquirable upon exercise of this Warrant immediately prior
to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. For purposes of determining
the adjusted Exercise Price under this Section 2(a), the following shall be applicable:4

 

(i)          Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 2(a)(i), the "lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the
Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and
upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option less any consideration
paid or payable by the Company with respect to such one share of Common Stock upon the granting or sale of such Option, upon exercise
of such Option and upon conversion exercise or exchange of any Convertible Security issuable upon exercise of such Option. No further
adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such shares of Common Stock
or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock
upon conversion, exercise or exchange of such Convertible Securities.

 

 

4 NTD: What is provided in this section is a typical
full ratchet provision. Your proposal for adjustments below market price is not.

 

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(ii)         Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(a)(ii),
the "lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof"
shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of
such Convertible Security less any consideration paid or payable by the Company with respect to such one share of Common Stock
upon the issuance or sale of such Convertible Security and upon conversion, exercise or exchange of such Convertible Security.
No further adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such shares of
Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other
provisions of this Section 2(a), no further adjustment of the Exercise Price or number of Warrant Shares shall be made by reason
of such issue or sale.

 

(iii)        Change
in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Exercise Price and the number of Warrant Shares in effect at the time of such increase or decrease shall be adjusted to the Exercise
Price and the number of Warrant Shares, which would have been in effect at such time had such Options or Convertible Securities
provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as
the case may be, at the time initially granted, issued or sold. For purposes of this Section 2(a)(iii), if the terms of any Option
or Convertible Security that was outstanding as of the Subscription Date are increased or decreased in the manner described in
the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment
pursuant to this Section 2(a) shall be made if such adjustment would result in an increase of the Exercise Price then in effect
or a decrease in the number of Warrant Shares.

 

    	- 11 -

    	 

    

  

(iv)        Calculation
of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value of such
Options and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold
for the difference of (I) the aggregate consideration received by the Company less any consideration paid or payable by the Company
pursuant to the terms of such other securities of the Company, less (II) the Option Value. If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration other than cash
received therefor will be deemed to be the net amount received by the Company therefor. If any shares of Common Stock, Options
or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by
the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities,
in which case the amount of consideration received by the Company will be the Closing Sale Price of such publicly traded securities
on the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving
entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be
deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such
shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash
or publicly traded securities will be determined jointly by the Company and the Required Holders. If such parties are unable to
reach agreement within ten (10) days after the occurrence of an event requiring valuation (the "Valuation Event"),
the fair value of such consideration will be determined within five (5) Business Days after the tenth (10th) day following
the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders. The determination
of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser
shall be borne by the Company; provided, however, that in the event the determination of such appraiser is identical
to the fair value of such consideration as determined by the Company, the fees and expenses of such appraiser shall be borne equally
among the holders of the SPA Warrants who disputed the valuation of the Company.

 

(v)         Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may
be.

 

    	- 12 -

    	 

    

  

(vi)        No
Readjustments. For the avoidance of doubt, in the event the Exercise Price has been adjusted pursuant to this Section 2(a)
and the Dilutive Issuance that triggered such adjustment does not occur, is not consummated, is unwound or is cancelled after the
fact for any reason whatsoever, in no event shall the Exercise Price be readjusted to the Exercise Price that would have been in
effect if such Dilutive Issuance had not occurred or been consummated.

 

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

 

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

 

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

 

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

 

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4.          PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

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

 

    	- 14 -

    	 

    

  

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

 

    	- 15 -

    	 

    

  

(c)          Notwithstanding
the foregoing, in the event of Fundamental Transaction, at the request of the Holder delivered before the ninetieth (90th)
day after the occurrence or consummation of such Fundamental Transaction, the Company (or the Successor Entity) shall purchase
this Warrant from the Holder by paying to the Holder, within five (5) Business Days after such request (or, if later, on the effective
date of the Fundamental Transaction), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of
this Warrant on the date of such Fundamental Transaction.

 

5.          NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws,
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect
the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value
of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the exercise of the SPA Warrants, 130% of the number of shares of Common Stock as shall from
time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise).

 

    	- 16 -

    	 

    

  

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

 

7.          REISSUANCE
OF WARRANTS.

 

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

 

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

 

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

 

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

 

    	- 17 -

    	 

    

  

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

 

9.          AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Required Holders. Any change, amendment or waiver by the Company and the Required Holders shall be binding
on the Holder of this Warrant and all holders of SPA Warrants.

 

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

 

    	- 18 -

    	 

    

  

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

 

12.         DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Days
of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company
are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business
Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two
(2) Business Days submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment
bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the
Company's independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the
case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten
(10) Business Days from the time it receives the disputed determinations or calculations; provided, however that
in the event the determination or calculation of the investment bank or the accountant, as the case may be, is identical to the
determination or calculation of the Company, the expenses of such investment bank or accountant, as the case may be, shall be borne
equally among the holders of the SPA Warrants who disputed the determination or calculation of the Company. Such investment bank's
or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

 

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

 

    	- 19 -

    	 

    

  

14.         TRANSFER.
This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of
the Company, except as may otherwise be required by Section 2(f) of the Securities Purchase Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

    	- 20 -

    	 

    

  

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

 

(e)          "Black
Scholes Value" means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the "OV"
function on Bloomberg determined as of the day immediately following the public announcement of the applicable Fundamental Transaction,
or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated, for pricing
purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining
term of this Warrant as of such date of request, (ii) an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the applicable Fundamental
Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated,
(iii) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if
any, plus the value of any non-cash consideration, if any, being offered in the Fundamental Transaction, (iv) a zero cost of borrow
and (v) a 360 day annualization factor.

 

(f)          "Bloomberg"
means Bloomberg Financial Markets.

 

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

 

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

 

    	- 21 -

    	 

    

  

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

 

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

 

(k)          "Eligible
Market" means the Principal Market, the NYSE MKT LLC, The NASDAQ Global Market, The NASDAQ Global Select Market or The
New York Stock Exchange, Inc.

 

    	- 22 -

    	 

    

  

(l)          "Equity
Conditions" means each of the following conditions: (i) on each day during Equity Conditions Measuring Period, either
(x) all Registration Statements filed and required to be filed pursuant to the Registration Rights Agreement shall be effective
and available for the resale of all remaining Registrable Securities, including the shares of Common Stock issuable upon exercise
of the Warrants that is subject to the applicable Mandatory Exercise requiring the satisfaction of the Equity Conditions, in accordance
with the terms of the Registration Rights Agreement and there shall not have been any Grace Periods (as defined in the Registration
Rights Agreement) or (y) all shares of Common Stock issuable pursuant to the terms of the SPA Securities and exercise of the Warrants,
including the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory Exercise
requiring the satisfaction of the Equity Conditions, shall be eligible for sale without restriction pursuant to Rule 144 and without
the need for registration under any applicable federal or state securities laws; (ii) on each day during the Equity Conditions
Measuring Period, the Common Stock is designated for quotation on the Principal Market or any other Eligible Market and shall not
have been suspended from trading on such exchange or market nor shall delisting or suspension by such exchange or market been threatened,
commenced or pending in writing by such exchange or market (provided, however, that in the event proceedings for
such delisting or suspension have been threatened or commenced, the Company shall have ninety (90) days from such threat or commencement,
whichever is earlier, to cure such failure before it is deemed, for all purposes hereunder, to have failed to satisfy such Equity
Condition); (iii) during the Equity Conditions Measuring Period, the Company shall have delivered the shares of Common Stock pursuant
to the terms of the SPA Securities and Warrant Shares upon exercise of the Warrants to the holders on a timely basis as set forth
in Section 3(c) of the SPA Securities and Section 1(a) of this Warrant (and analogous provisions under the other SPA Warrants);
(iv) the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory Exercise requiring
the satisfaction of the Equity Conditions may be issued in full without violating Section 1(f) hereof and the rules or regulations
of the Principal Market or any other applicable Eligible Market; (v) during the Equity Conditions Measuring Period, the Company
shall not have failed to timely make any payments within ten (10) Business Days of when such payment is due pursuant to any Transaction
Document; (vi) during the Equity Conditions Measuring Period, there shall not have occurred either (A) the public announcement
of a pending, proposed or intended Fundamental Transaction which has not been abandoned, terminated or consummated, (B) an Event
of Default (as defined in the SPA Securities) or (C) an event that with the passage of time or giving of notice would constitute
an Event of Default; (vii) the Company shall have no knowledge of any fact that would cause (x) the Registration Statements required
pursuant to the Registration Rights Agreement not to be effective and available for the resale of all remaining Registrable Securities,
including the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory Exercise
requiring the satisfaction of the Equity Conditions, in accordance with the terms of the Registration Rights Agreement or (y) any
shares of Common Stock issuable pursuant to the terms of the SPA Securities and shares of Common Stock issuable upon exercise of
the Warrants, including the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory
Exercise requiring the satisfaction of the Equity Conditions, not to be eligible for sale without restriction pursuant to Rule
144 promulgated under the Securities Act and any applicable state securities laws; (viii) during the Equity Conditions Measuring
Period, the Company otherwise shall have been in compliance with and shall not have breached any provision, covenant, representation
or warranty of any Transaction Document; (ix) on each day during Equity Conditions Measuring
Period, the Holder shall not be in possession of any material, nonpublic information received from the Company, any Subsidiary
or its respective agent or affiliates; (x) the shares of Common Stock issuable upon exercise of the Warrants that is subject to
the applicable Mandatory Exercise requiring the satisfaction of the Equity Conditions are duly authorized and listed and eligible
for trading without restriction on an Eligible Market; (xi) the Company shall have obtained the Stockholder Approval (as defined
in the Securities Purchase Agreement); (xii) the daily dollar trading volume of the Common Stock as reported by Bloomberg shall
be at least $350,000 on no less than ten (10) Trading Days during the twenty (20) consecutive Trading Day immediately preceding
the applicable date of determination; (xiii) the arithmetic average of the daily dollar trading volume of the Common Stock as reported
by Bloomberg during the twenty (20) consecutive Trading Day immediately preceding the applicable date of determination shall be
no less than $350,000; (xiv) the arithmetic average of the Weighted Average Prices of the Common Stock on each Trading Day during
the Equity Conditions Measuring Period exceeds [     ]5 (as adjusted for any stock dividend,
stock split, stock combination, reclassification or similar transaction occurring after the Subscription Date); and (xv) on
each day during the Equity Conditions Measuring Period, the Company is in compliance with the requirement set forth in Rule 144(c)(1).

 

(m)         "Equity
Conditions Failure" means that on any day during the period commencing ten (10) Trading Days prior to the applicable date
of determination through the applicable date of determination, the Equity Conditions have not each been satisfied (or waived in
writing by the Holder).

 

 

5 [INSERT IN INITIAL NOTES: $0.535.] [INSERT
IN ADDITIONAL NOTES: Insert 50% of the Market Price (as defined in the SPA Securities) as of the date of the applicable Buyer
Additional Closing Notice.]

 

    	- 23 -

    	 

    

  

(n)         "Equity
Conditions Measuring Period" means each day during the period beginning thirty (30) Trading Days prior to the applicable
date of determination and ending on and including the applicable date of determination.

 

(o)         "Excluded
Securities" means no more than an aggregate pursuant to all of the following events of 2,345,564 shares of Common Stock
(as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction after the Subscription
Date) (the "Excluded Securities Cap") issued or issuable or deemed to be issued in accordance with Section 2(a)
hereof by the Company: (A) under any Approved Stock Plan; (B) in accordance with the terms of this Warrant, the other SPA Warrants
and the SPA Securities; provided, that this Warrant, the other SPA Warrants and the SPA Securities are not amended, modified
or changed on or after the Subscription Date; (C) upon conversion, exercise or exchange of any Options or Convertible Securities
which are outstanding on the day immediately preceding the Subscription Date, provided, that such issuance of Common Stock
upon exercise of such Options or Convertible Securities is made pursuant to the terms of such Options or Convertible Securities
in effect on the date immediately preceding the Subscription Date and such Options or Convertible Securities are not amended, modified
or changed on or after the Subscription Date, (D) securities issued pursuant to acquisitions or strategic transactions approved
by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to an unaffiliated Person
(or to the equity holders of an unaffiliated Person) which is, itself or through its subsidiaries, an operating company or an owner
of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in
addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities for the purpose
of raising capital or to an entity whose primary business is investing in securities; or (E) in accordance with the terms of any
securities issued to any of the initial Holders; provided, however, that the Excluded Securities Cap shall not apply
to, and the Excluded Securities Cap shall be calculated irrespective of any restricted shares of Common Stock with respect to which
the Company has not and will not file a registration statement for the issuance or resale of such shares pursuant to the Securities
Act, and which are issued in connection with (i) the acquisition from Maglenta Enterprises Inc. and Champfremont Holding Ltd. of
all of the issued and outstanding equity interests of the PayOnline group of companies consisting of PayOnline System LLC, Innovative
Payment Technologies LLC, Polimore Capital Limited and Brosword Holding Limited, by TOT Group Europe, Ltd., a Subsidiary of the
Company, and (ii) pursuant to the foregoing clause (D).

 

(p)         "Expiration
Date" means the date thirty-six (36) months after the Issuance Date or, if such date falls on a day other than a Business
Day or on which trading does not take place on the Principal Market (a "Holiday"), the next day that is not a
Holiday.

 

    	- 24 -

    	 

    

  

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

 

    	- 25 -

    	 

    

  

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

 

(s)          "Lead
Investor" means [            ].

 

(t)          "Option
Value" means the value of an Option based on the Black and Scholes Option Pricing model obtained from the "OV"
function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable Option,
if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable
Option if the issuance of such Option is not publicly announced, for pricing purposes and reflecting (i) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable
date of determination, (ii) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT
function on Bloomberg as of (A) the Trading Day immediately following the public announcement of the applicable Option if the issuance
of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the
issuance of such Option is not publicly announced, (iii) the underlying price per share used in such calculation shall be the highest
Weighted Average Price of the Common Stock during the period beginning on the Trading Day prior to the execution of definitive
documentation relating to the issuance of the applicable Option and ending on (A) the Trading Day immediately following the public
announcement of such issuance, if the issuance of such Option is publicly announced or (B) the Trading Day immediately following
the issuance of the applicable Option if the issuance of such Option is not publicly announced, (iv) a zero cost of borrow and
(v) a 360 day annualization factor.

 

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

 

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

 

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

 

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

 

(y)          "Registrable
Secuirties" shall have the meaning set forth in the Registration Rights Agreement.

 

    	- 26 -

    	 

    

  

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

 

(aa)        "Registration
Statement" shall have the meaning set forth in the Registration Rights Agreement.

 

(bb)       "Required
Holders" means the holders of the SPA Warrants representing at least sixty-five percent (65%) of the shares of Common
Stock underlying the SPA Warrants then outstanding and shall include the Lead Investor so long as the Lead Investor or any of its
Affiliates holds any SPA Warrants.

 

(cc)       "SPA
Securities" means the Notes issued pursuant to the Securities Purchase Agreement.

 

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

 

(ee)        "Subsidiary"
shall have the meaning ascribed to such term in the Securities Purchase Agreement.

 

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

 

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

 

(hh)        "Weighted
Average Price" means, for any security as of any date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its "Volume at Price" function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or "pink sheets" by OTC Markets
Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 12 with the term "Weighted Average Price" being
substituted for the term "Exercise Price." All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

 

[Signature Page Follows]

 

    	- 27 -

    	 

    

 

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

 

	 	NET ELEMENT, INC.	 
	 	 	 
	 	By:	 	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO
EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

Net
element, inc. 

 

The
undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock ("Warrant Shares")
of Net Element, Inc., a Delaware corporation (the "Company"), evidenced by
the attached Warrant to Purchase Common Stock (the "Warrant"). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.

 

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

 

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

 

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

 

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

 

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

 

Date: _______________ __, ______

 

	 
	Name of Registered Holder
	 	 
	By:	 
	 	Name:
	 	Title:

 

    	 

    	 

    

 

ACKNOWLEDGMENT

 

The Company hereby acknowledges
this Exercise Notice and hereby directs Continental Stock Transfer & Trust Company to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated April [__], 2015 from the Company and acknowledged and
agreed to by Continental Stock Transfer & Trust Company.

 

	 	NET ELEMENT, INC.	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 
	 	Title:Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

SECURITIES PURCHASE
AGREEMENT (the "Agreement"), dated as of April 30, 2015, by and among Net Element, Inc., a Delaware corporation,
with headquarters located at 3363 NE 163rd Street, Suite 705, North Miami Beach, FL 33160 (the "Company"),
and the investors listed on the Schedule of Buyers attached hereto (individually, a "Buyer" and collectively,
the "Buyers").

 

WHEREAS:

 

A.           The
Company and the Buyers desire to enter into this transaction to purchase the Preferred Shares (as defined below) pursuant to the
Registration Statement (as defined below) which is currently effective, has up to $50,000,000 of initial offering price of unallocated
securities available for sale as of the date hereof (but which is currently subject to the limitation set forth in General Instruction
I.B.6 of Form S-3) and has been declared effective in accordance with the Securities Act of 1933, as amended (the "1933
Act"), by the United States Securities and Exchange Commission (the "SEC").

 

B.      The
Company has authorized a new series of convertible preferred stock of the Company designated as Series A Convertible Preferred
Stock, par value $0.01 per share, the terms of which are set forth in the certificate of designations for such series of preferred
stock (the "Certificate of Designations") in the form attached hereto as Exhibit A (together with any convertible
preferred shares issued in replacement thereof in accordance with the terms thereof, the "Preferred Shares"),
which Preferred Shares shall be convertible or redeemable into the Company's common stock, par value $0.0001 per share (the "Common
Stock") in accordance with the terms of the Certificate of Designations (as converted or redeemed, collectively, the "Conversion
Shares"). The Conversion Shares shall be issued pursuant to the Registration Statement, or, if such Registration Statement
is not available at the time of issuance of such Conversion Shares, as securities exempt from registration pursuant to Section
3(a)(9) of the 1933 Act.

 

C.      Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, at the Closing
(as defined below) that aggregate number of Preferred Shares set forth opposite such Buyer's name in column (3) on the Schedule
of Buyers attached hereto (which aggregate amount for all Buyers shall be 5,500).

 

D.           The
Preferred Shares shall be entitled to Dividends and to certain Make-Whole Amounts (each, as defined in the Certificate of Designations),
which may be paid in shares of Common Stock that have been registered for resale (the "Additional Shares").

 

E.           The
Preferred Shares, the Conversion Shares and the Additional Shares collectively are referred to herein as the "Securities".

 

    	 

    	 

    

  

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

 

1.          PURCHASE
AND SALE OF Preferred Shares.

 

(a)  Closing.
Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell
to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as defined below),
the number of Preferred Shares in an aggregate amount as is set forth opposite such Buyer's name in column (3) on the Schedule
of Buyers (the "Closing").

 

(b)  Purchase
Price. The aggregate purchase price for the Preferred Shares to be purchased by each such Buyer at the Closing (the "Purchase
Price") shall be the amount set forth opposite each Buyer's name in column (4) on the Schedule of Buyers (less, in the
case of [            ] (the "Lead Investor"), any amounts withheld pursuant to
Section 4(f)). Each Buyer shall pay $1,000 per each Preferred Share to be purchased by each Buyer at the Closing.

 

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

 

(d)  Form
of Payment. On the Closing Date, (i) each Buyer shall pay its Purchase Price to the Company for the Preferred Shares to be
issued and sold to such Buyer at the Closing (less, in the case of the Lead Investor, any amounts withheld pursuant to Section
4(f)) by wire transfer of immediately available funds in accordance with the Company's written wire instructions and (ii) the
Company shall deliver to each Buyer the Preferred Shares (allocated in the amounts as such Buyer shall request) which such Buyer
is then purchasing hereunder, duly executed on behalf of the Company and registered in the name of such Buyer or its designee.

 

2.          BUYER'S
REPRESENTATIONS AND WARRANTIES. Each Buyer, severally and not jointly, represents and warrants
with respect to only itself that, as of the date hereof and as of the Closing Date:

 

(a)  Organization;
Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by such Buyer of the transactions
contemplated by this Agreement has been duly authorized by all necessary action on the part of such Buyer. This Agreement has been
duly executed by such Buyer, and when delivered by such Buyer in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Buyer, enforceable against it in accordance with its terms, except as such enforceability may
be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

 

    	2

    	 

    

 

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

 

(c)  Qualified
Institutional Investor and Accredited Investor Status.  Such Buyer is a "qualified institutional buyer"
("QIB") as such term is defined in Rule 144A under the 1933 Act and/or an "accredited investor" as that
term is defined in Rule 501(a) of Regulation D, as indicated on the signature page of such Buyer.

 

3.          REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company represents and warrants to each of the Buyers
that, as of the date hereof and as of the Closing Date:

 

(a)  Shelf
Registration Statement.

 

(i)          The
Company has prepared and filed in conformity with the requirements of the 1933 Act and the published rules and regulations
thereunder (the "Rules and Regulations") adopted by the SEC a "shelf" registration statement on
Form S-3 (No. 333-199432), which became effective on December 10, 2014, including a base prospectus, (the "Base
Prospectus") relating to Common Stock, preferred stock, warrants, subscription rights or units of
the Company that may be sold from time to time by the Company, in accordance with Rule 415 of the 1933 Act, and such
amendments thereof as may have been required to the date of this Agreement. The Company was at the time of the filing of the
Registration Statement eligible to use Form S-3. The term "Registration Statement" as used in this Agreement
means such registration statement, including all exhibits, financial schedules and all documents and information deemed to be
part of the Registration Statement by incorporation by reference or otherwise, as amended from time to time, including the
information (if any) contained in the form of final prospectus filed with the SEC pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be part thereof at the time of effectiveness pursuant to Rules 430A and 430B of the Rules and
Regulations. The term "Preliminary Prospectus" means the Base Prospectus, together with any preliminary
prospectus supplement used or filed with the SEC pursuant to Rule 424 of the Rules and Regulations. The term
"Prospectus" means the Base Prospectus, any Preliminary Prospectus and any amendments or further
supplements to such prospectus filed with the SEC, and including, without limitation, the final prospectus supplement (the
"Prospectus Supplement"), filed pursuant to and within the limits described in Rule 424(b) with the SEC in
connection with the proposed sale of the Securities contemplated by this Agreement through the date of such prospectus
supplement. Unless otherwise stated herein, any reference herein to the Registration Statement, any Preliminary Prospectus,
the Statutory Prospectus (as hereinafter defined) and the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, including pursuant to Item 12 of Form S-3 under the 1933 Act, which were filed under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), on or before the date hereof or are so
filed hereafter. Any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, any Preliminary Prospectus, the Statutory Prospectus or the Prospectus shall be deemed
to refer to and include any such document filed or to be filed under the 1934 Act after the date of the Registration
Statement, any such Preliminary Prospectus, Statutory Prospectus or Prospectus, as the case may be, and deemed to be
incorporated therein by reference.

 

    	3

    	 

    

 

(ii)         The
Company was at the time of the filing of the Registration Statement eligible to use Form S-3. As of the date of this Agreement,
the Company is eligible to use Form S-3 under the 1933 Act and it meets the transaction requirements with respect to the aggregate
market value of securities being sold pursuant to this offering and during the twelve (12) months prior to this offering, in accordance
with General Instruction I.B.6 of Form S-3. The Company filed with the SEC the Registration Statement on such Form S-3, including
a Base Prospectus, for registration under the 1933 Act of the offering and sale of the Securities, and the Company has prepared
and used a Preliminary Prospectus in connection with the offer and sale of the Securities. When the Registration Statement or any
amendment thereof or supplement thereto was or is declared effective and as of the date of the most recent amendment to the Registration
Statement, it (i) complied or will comply, in all material respects, with the requirements of the 1933 Act and the Rules and Regulations
and the 1934 Act and the rules and regulations of the SEC thereunder and (ii) did not or will not, contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements
therein not misleading. When any Preliminary Prospectus or Prospectus was first filed with the SEC (whether filed as part of the
Registration Statement or any amendment thereto or pursuant to Rule 424 of the Rules) and when any amendment thereof or supplement
thereto was first filed with the SEC, such Preliminary Prospectus or Prospectus as amended or supplemented complied in all material
respects with the applicable provisions of the 1933 Act and the Rules and Regulations and did not or will not, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the
statements therein not misleading.

 

(b)  Prospectus.
As of the Applicable Time (as defined below) and as of the Closing Date, neither (x) the General Use Free Writing Prospectus(es)
(as defined below) issued at or prior to the Applicable Time, the Statutory Prospectus (as defined below), all considered together
(collectively, the "General Disclosure Package"), nor (y) any individual Limited Use Free Writing Prospectus (as
defined below), when considered together with the General Disclosure Package, included, includes or will include any untrue statement
of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes
no representations or warranties as to information contained in or omitted from any Issuer Free Writing Prospectus, in reliance
upon, and in conformity with, written information furnished to the Company by or on behalf of the Buyers, specifically for use
therein. As used in this subsection and elsewhere in this Agreement:

 

    	4

    	 

    

 

(i)          "Applicable
Time" means 5:30 p.m. (New York time) on the date of this Agreement or such other time as agreed to by the Company and
the Buyers.

 

(ii)         "Statutory
Prospectus" as of any time means the Preliminary Prospectus included in the Registration Statement immediately prior to
that time.

 

(iii)        "Issuer
Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433 under the 1933 Act,
relating to the Securities in the form filed or required to be filed with the SEC or, if not required to be filed, in the form
retained in the Company's records pursuant to Rule 433(g) under the 1933 Act.

 

(iv)        "General
Use Free Writing Prospectus" means any Issuer Free Writing Prospectus that is identified on Schedule I to this Agreement.

 

(v)         "Limited
Use Free Writing Prospectus" means any Issuer Free Writing Prospectus that is not a General Use Free Writing Prospectus.

 

(c)  Organization.
Each of the Company and its "Subsidiaries" (which, for the purposes of this Agreement means any entity or joint
venture which the Company, directly or indirectly, owns any of the capital stock or holds an equity or similar interest) are entities
duly organized and validly existing in good standing under the laws of the jurisdiction in which they are formed, and have requisite
power and authorization to own or lease their properties and conduct their business as now being conducted and as described in
the Registration Statement, the General Disclosure Package and the Prospectus. The Company has no significant Subsidiaries (as
such term is defined in Rule 1-02 of Regulation S-X promulgated by the SEC) other than as listed in Exhibit 21.1 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (the "Annual Report"). The Subsidiaries
are the only subsidiaries, direct or indirect, of the Company. The Company and each of the Subsidiaries are duly qualified as a
foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of
the conduct of their business makes such qualification necessary, except to the extent that the failure to be so qualified or be
in good standing would not reasonably be expected to have a Material Adverse Effect. As used in this Agreement, "Material
Adverse Effect" means any material adverse effect on (i) the business, properties, assets, operations, results of operations,
condition (financial or otherwise) or prospects of the Company and its Subsidiaries, taken as a whole, (ii) the transactions contemplated
hereby or on the other Transaction Documents, or (iii) the authority or the ability of the Company to perform its obligations under
the Transaction Documents or consummate any transactions contemplated by this Agreement or the other Transaction Documents. The
outstanding shares of capital stock of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company or another Subsidiary free and clear of all liens, encumbrances and equities and claims,
except as described in the Registration Statement and the Annual Report; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any obligations into shares of capital stock or ownership interests
in the Subsidiaries are outstanding.

 

    	5

    	 

    

 

(d)  Authorization;
Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and perform its obligations
under this Agreement, the Certificate of Designations, the Irrevocable Transfer Agent Instructions (as defined in Section 5(b)),
the Lock-Up Agreements (as defined in Section 3(yy)), the Voting Agreement (as defined in Section 4(n)) and each of the other agreements
entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the "Transaction
Documents") and to issue the Securities in accordance with the terms hereof and thereof. The execution and delivery of
the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Preferred Shares, the reservation for issuance and the issuance of the Conversion
Shares and the Additional Shares pursuant to the terms of the Certificate of Designations have been duly authorized by the Company's
Board of Directors, and, other than NASDAQ's Listing of Additional Shares notification in connection with the transactions contemplated
hereby, no further filing, consent, or authorization is required by the Company, its Board of Directors or its stockholders. This
Agreement and the other Transaction Documents have been duly executed and delivered by the Company, and constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.
The Certificate of Designations in the form attached hereto as Exhibit A has been filed with the Secretary of State of the
State of Delaware and is in full force and effect, enforceable against the Company in accordance with its terms and has not been
amended.

 

(e)  Issuance
of Securities. The outstanding shares of Common Stock of the Company have been duly authorized and validly issued and are fully
paid and non-assessable; the Securities to be issued and sold by the Company have been duly authorized and when issued and paid
for as contemplated herein in accordance with the terms of the Transaction Documents will be free from all taxes, liens and charges
with respect to the issue thereof, validly issued, fully paid and non-assessable; and no preemptive rights of stockholders exist
with respect to any of the Securities or the issue and sale thereof. As of the Closing, a number of shares of Common Stock shall
have been duly authorized and reserved for issuance which equals or exceeds (the "Required Reserve Amount") the
maximum number of shares of Common Stock issued and issuable pursuant to the terms of the Preferred Shares, which amount initially
reserved is 9,501,850 shares of Common Stock (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction occurring after the date hereof) to issue the shares of Common Stock pursuant to the terms of the Certificate
of Designations (without taking into account any limitations on the conversion of the Preferred Shares set forth in the Certificate
of Designations). As of the date hereof, there are 152,539,968 shares of Common Stock authorized and unissued. Neither the offering
nor sale of the Securities as contemplated by this Agreement gives rise to any rights, other than those which have been waived
or satisfied, for or relating to the registration of any shares of Common Stock. Upon issuance pursuant to the Certificate of Designations,
the Conversion Shares and the Additional Shares will be validly issued, fully paid and nonassessable and free from all preemptive
or similar rights, taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded
to a holder of Common Stock. Except as set forth in the Registration Statement and the Prospectus, there are no securities or instruments
issued by the Company containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities.

 

    	6

    	 

    

 

(f)  Equity
Capitalization. The Company has or will have, as the case may be, an authorized, issued and outstanding capitalization as is
set forth in the Registration Statement and the Prospectus (subject, in each case, to the issuance of shares of Common Stock upon
exercise of stock options and warrants disclosed as outstanding in the Registration Statement and the Prospectus and the grant
or issuance of options or shares under existing equity compensation plans or stock purchase plans described in the Registration
Statement or the Prospectus), and such authorized capital stock conforms to the description thereof set forth in the Registration
Statement and the Prospectus. Except as disclosed in the Registration Statement and the Prospectus (i) none of the Company's capital
stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company;
(ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company
or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible
into, or exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiaries; (iii) there are
no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing
Indebtedness (as defined in the Certificate of Designations) of the Company or any of its Subsidiaries or by which the Company
or any of its Subsidiaries is or may become bound; (iv) other than the financing statements perfecting the lien on the Company's
Subsidiaries processing portfolios income stream in connection with the credit facility from RBL Capital Group, LLC, there are
no financing statements securing obligations in any material amounts, either singly or in the aggregate, filed in connection with
the Company or any of its Subsidiaries; (v) there are no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act; (vi) there are no outstanding securities or instruments
of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the
Company or any of its Subsidiaries; (vii) there are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities; (viii) the Company does not have any stock appreciation rights or "phantom
stock" plans or agreements or any similar plan or agreement; and (ix) the Company and its Subsidiaries have no liabilities
or obligations required to be disclosed in the SEC Documents but not so disclosed in the SEC Documents, other than those incurred
in the ordinary course of the Company's or any of its Subsidiary's' respective businesses and which, in the aggregate, do not or
would not have a Material Adverse Effect. The Company has furnished or made available to the Buyers true, correct and complete
copies of the Company's Amended and Restated Certificate of Incorporation, as amended and as in effect on the date hereof (the
"Certificate of Incorporation"), and the Company's Bylaws, as amended and as in effect on the date hereof (the
"Bylaws"), and the terms of all securities convertible into, or exercisable or exchangeable for shares of Common
Stock and the material rights of the holders thereof in respect thereto. All of the Securities conform to the description thereof
contained in the Registration Statement and the Prospectus. The form of certificates for the Securities will conform to the corporate
law of the jurisdiction of the Company's incorporation.

 

    	7

    	 

    

 

(g)  Disclosure.

 

(i)          The
SEC has not issued an order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus
or the Prospectus relating to the proposed offering of the Securities, and no proceeding for that purpose or pursuant to Section
8A of the 1933 Act has been instituted or, to the Company's knowledge, threatened by the SEC. The Registration Statement conforms,
and the Prospectus and any amendments or supplements thereto will conform to the requirements of the 1933 Act and the Rules and
Regulations. The documents incorporated, or to be incorporated, by reference in the Prospectus, at the time filed with the SEC
conformed in all material respects, or will conform in all respects, to the requirements of the 1934 Act, or the 1933 Act, as applicable,
and the Rules and Regulations. The Registration Statement and any amendments and supplements thereto do not contain, and on the
Closing Date will not contain, any untrue statement of a material fact and do not omit, and on the Closing Date will not omit,
to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus
and any amendments and supplements thereto do not contain, and on the Closing Date will not contain, any untrue statement of a
material fact; and do not omit, and on the Closing Date will not omit, to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.

 

(ii)         Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and
sale of the Securities or until any earlier date that the Company notified or notifies the Buyers as described in the next sentence,
did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained
in the Registration Statement or the Prospectus, including any document incorporated by reference therein that has not been superseded
or modified. If at any time following issuance of an Issuer Free Writing Prospectus, there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact necessary in order to make the statements therein, in light of the circumstances, not misleading,
the Company has notified or will notify promptly the Buyers so that any use of such Issuer Free Writing Prospectus may cease until
it is amended or supplemented.

 

    	8

    	 

    

 

(iii)        The
Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or counsel
with any information that constitutes or could reasonably be expected to constitute material, nonpublic information. The Company
understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions in securities
of the Company. All disclosure provided to the Buyers regarding the Company, or any of its Subsidiaries, their business and the
transactions contemplated hereby furnished by or on behalf of the Company is true and correct and does not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. Each press release issued by the Company or any of its Subsidiaries during
the twelve (12) months preceding the date of this Agreement did not at the time of release contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or information exists
with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial
conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed. The Company acknowledges and agrees that no Buyer makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2. For purposes
of this Agreement, "Person" means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

 

(h)  Offering
Materials. The Company has not, directly or indirectly, distributed and will not distribute any offering material in connection
with the offering and sale of the Securities other than any Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus
and other materials, if any, permitted under the 1933 Act. The Company will file with the SEC all Issuer Free Writing Prospectuses
in the time required under Rule 433(d) under the 1933 Act. The Company has satisfied or will satisfy the conditions in Rule 433
under the 1933 Act to avoid a requirement to file with the SEC any electronic road show.

 

(i)   Ineligible
Issuer Status. At the time of filing the Registration Statement and (ii) as of the date hereof (with such date being used as
the determination date for purposes of this clause (ii)), the Company was not and is not an "ineligible issuer" (as defined
in Rule 405 under the 1933 Act, without taking into account any determination by the SEC pursuant to Rule 405 under the 1933 Act
that it is not necessary that the Company be considered an ineligible issuer), including, without limitation, for purposes of Rules
164 and 433 under the 1933 Act with respect to the offering of the Securities as contemplated by the Registration Statement.

 

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(j)   Financial
Statements. The consolidated financial statements of the Company and the Subsidiaries, together with related notes and schedules
as set forth or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, present
fairly in all material respects the financial position of the Company and the consolidated Subsidiaries and the results of operations
and cash flows of the Company and the consolidated Subsidiaries, at the indicated dates and for the indicated periods. Such consolidated
financial statements and related schedules have been prepared in accordance with United States generally accepted accounting principles,
consistently applied throughout the periods involved ("GAAP"), except as disclosed therein, and all adjustments
necessary for a fair presentation of results for such periods have been made. The summary and selected consolidated financial and
statistical data included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus
presents fairly in all material respects the information shown therein, at the indicated dates and for the indicated periods, and
such data has been compiled on a basis consistent with the financial statements presented therein and the books and records of
the Company. All disclosures, if any, contained in the Registration Statement, the General Disclosure Package and the Prospectus
regarding "non-GAAP financial measures" (as such term is defined by the Rules and Regulations) comply in all material
respects with Regulation G of the 1934 Act and Item 10 of Regulation S-K under the 1933 Act, to the extent applicable. The Company
and the Subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet
obligations or any "variable interest entities" within the meaning of Financial Accounting Standards Board Interpretation
No. 46), not disclosed in the Registration Statement, the General Disclosure Package and the Prospectus. There are no financial
statements (historical or pro forma) that are required to be included in the Registration Statement, the General Disclosure Package
or the Prospectus that are not included as required. No other information provided by or on behalf of the Company to the Buyers
which is not included in the SEC Documents (as defined below) contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein, in the light of the circumstance under which they are or were
made, not misleading.

 

(k)   Accountants.
Daszkal Bolton LLP, who have certified certain of the financial statements filed with the SEC as part of, or incorporated by reference
in, the Registration Statement, the General Disclosure Package and the Prospectus, has represented to the Company that it is an
independent registered public accounting firm with respect to the Company and the Subsidiaries within the meaning of the 1933
Act and the applicable Rules and Regulations and the Public Company Accounting Oversight Board (United States).

 

(l)    Weaknesses
or Changes in Internal Accounting Controls. Except as described in Item 9A of the Company's Form 10-K for the period ended
December 31, 2014, neither the Company nor any of the Subsidiaries has during the twelve months prior to the date hereof (i) received
any notice or correspondence from any accountant relating to any material weakness in any part of the system of internal accounting
controls of the Company or any of its Subsidiaries (ii) become aware of any material weakness in its internal control over financial
reporting or change in internal control over financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.

 

(m)  Sarbanes-Oxley.
The principal executive officer and principal financial officer of the Company have made all certifications required by Sections
302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated in connection therewith (the
"Sarbanes-Oxley Act") with respect to all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC, and the statements contained in any such certification are complete and correct. The Company and all
of the Company's directors and officers are in compliance in all respects with all applicable effective provisions of the Sarbanes-Oxley
Act.

 

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

 

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(o)   Title.
The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free
and clear of all liens, encumbrances and defects except for Permitted Liens which do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any
real property and facilities held under lease by the Company and any of its Subsidiaries are held by them under valid, subsisting
and enforceable leases conforming in all material respects to the description thereof set forth in the Registration Statement,
the General Disclosure Package and the Prospectus.

 

(p)   Taxes.
The Company and each of its Subsidiaries (i) has made or filed all U.S. federal, state and foreign income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those
being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any
such claim.

 

(q)   Absence
of Certain Changes. Since the respective dates as of which information is given in the Registration Statement, the General
Disclosure Package and the Prospectus, as each may be amended or supplemented, there has been no material adverse change and no
material adverse development in the business, assets, properties, operations, condition (financial or otherwise), results of operations
or prospects of the Company or its Subsidiaries and there has not been any material transaction entered into by the Company or
the Subsidiaries (including, without limitation, (i) declaration or payment of any dividends, (ii) sale of any assets, in the aggregate,
in excess of $100,000 or (iii) any capital expenditures, in the aggregate, in excess of $100,000), other than transactions in the
ordinary course of business and transactions described in the Registration Statement, the General Disclosure Package and the Prospectus,
as each may be amended or supplemented. The Company and the Subsidiaries have no material contingent obligations which are not
disclosed in the Company's consolidated financial statements which are included in the Registration Statement, the General Disclosure
Package and the Prospectus. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to
any bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact that would reasonably lead a creditor to do so. The Company, individually,
and the Company and its Subsidiaries, on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions
contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Agreement, "Insolvent"
means, with respect to any Person, (i) the present fair saleable value of such Person's assets is less than the amount required
to pay such Person's total Indebtedness, (ii) such Person is unable to pay its debts and liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and matured, (iii) such Person intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature or (iv) such Person has unreasonably small capital
with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.

 

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(r)    No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Shares
and reservation for issuance and issuance of the Conversion Shares and the Additional Shares) will not (i) result in a violation
of its Certificate of Incorporation or Bylaws, any memorandum of association, articles of incorporation, certificate of formation,
bylaws, any certificate of designations or other constituent documents of the Company or any of its Subsidiaries, any capital
stock of the Company or any of its Subsidiaries or the articles of association or bylaws of the Company or any of its Subsidiaries
or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default)
in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries
or any of their respective properties is bound, or (iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including other foreign, federal and state securities laws and regulations and the rules and regulations of the Principal
Market and including all applicable laws of the State of Delaware and any foreign, federal and state laws, rules and regulations)
applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries
is bound or affected.

 

(s)   Contracts.
There is no document, contract or other agreement required to be described in the Registration Statement or Prospectus or to be
filed as an exhibit to the Registration Statement which is not described or filed as required by the 1933 Act or the Rules and
Regulations. Each description of a contract, document or other agreement in the Registration Statement and the Prospectus accurately
reflects in all material respects the terms of the underlying contract, document or other agreement. Each contract, document or
other agreement described in the Registration Statement and Prospectus or listed in the exhibits to the Registration Statement
or incorporated by reference is in full force and effect and is valid and enforceable by and against the Company in accordance
with its terms (except as rights to indemnity and contribution thereunder may be limited by federal or state securities laws and
matter of public policy and except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principle). Neither the
Company nor any of its Subsidiaries nor, to the Company's knowledge, any other party is in default in the observance or performance
of any term or obligation to be performed by it under any such agreement or any other agreement or instrument to which the Company
or its Subsidiaries is a party or by which the Company or its Subsidiaries or their respective properties or businesses may be
bound, and no event has occurred which with notice or lapse of time or both would constitute such a default, in any such case in
which the default or event, in the aggregate, would have a Material Adverse Effect.

 

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(t)    Regulatory
Approvals. Each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative
or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the consummation
of the transactions herein contemplated (except such additional steps as may be required by the SEC, the Financial Industry Regulatory
Authority, Inc. (the "FINRA"), the Principal Market or such additional steps as may be required under state securities
or Blue Sky laws) has been obtained or made and is in full force and effect.

 

(u)   Conduct
of Business. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default under any certificate
of designations of any outstanding series of preferred stock of the Company (if any), its Certificate of Incorporation or Bylaws
or their organizational charter or memorandum of association or articles of incorporation or articles of association or bylaws,
respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries
will conduct its business in violation of any of the foregoing, except for possible violations which would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

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

 

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(w)  Manipulation
of Prices. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any
action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) other than the Agent,
sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) other than the
Agent, paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company.

 

(x)   Investment
Company Act. Neither the Company nor any Subsidiary is, and upon consummation of the sale of the Securities, and for so long
any Buyer holds any Securities, will be, an "investment company," a company controlled by an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company"
as such terms are defined in the Investment Company Act of 1940, as amended.

 

(y)   Internal
Accounting Controls.

 

(i)          Except
as described in Item 9A of the Company’s Form 10-K for the period ended December 31, 2014, the Company and each of its Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence
of liabilities is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability
for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action
is taken with respect to any difference.

 

(ii)         Except
as described in Item 9A of the Company’s Form 10-K for the period ended December 31, 2014, the Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15 under the 1934 Act) that are effective in ensuring that information
required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized
and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the Company's management, including its principal executive officer or officers
and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure.

 

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(z)   Industry
and Market Data. The statistical, industry-related and market-related data included in the Registration Statement, the General
Disclosure Package and the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes
are reliable and accurate, and such data agree in all material respects with the sources from which they are derived.

 

(aa)  Money
Laundering Laws. The operations of the Company and the 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 or its Subsidiaries with respect to the Money Laundering Laws is pending or, to
the Company's knowledge, threatened.

 

(bb)  Office
of Foreign Assets Control.  Neither the Company nor any director, officer, agent, employee or affiliate of the Company
is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department
("OFAC").  Neither the Company nor any subsidiary or affiliate (a) will directly or indirectly use the proceeds
of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other
person or entity currently subject to any U.S. sanctions administered by OFAC; (b) is knowingly engaged in, or will knowingly
engage in, any dealings or transactions or be otherwise associated with such persons or entities described in clause (a) above.

 

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

 

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

 

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(ee)  Employee
Relations.

 

(i)          Neither
the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The
Company and its Subsidiaries believe that its relations with its employees are good. No executive officer of the Company or any
of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the Company or any such Subsidiary that such officer
intends to leave the Company or any such Subsidiary or otherwise terminate such officer's employment with the Company or any such
Subsidiary. No executive officer of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters, except where such
violation would not, in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

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

 

(ff)  Transactions
with Affiliates. To the Company's knowledge, there are no affiliations or associations between any member of the FINRA and
any of the Company's officers, directors or 5% or greater securityholders, except as set forth in the Registration Statement. There
are no relationships or related-party transactions involving the Company or any of the Subsidiaries or, to the knowledge of the
Company, any other person required to be described in the Prospectus which have not been described as required.

 

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

 

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(hh)  Listing;
1934 Act Registration. The Common Stock is listed for trading on the Principal Market. The Company has taken no action designed
to, or likely to have the effect of, terminating the registration of the Common Stock under the 1934 Act or the quotation of the
Common Stock on the Principal Market, nor has the Company received any notification that the SEC or the Principal Market is contemplating
terminating such registration or quotation. Without limiting the generality of the foregoing, the Company is not in violation of
any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances that would
reasonably lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future. During the two
(2) years prior to the date hereof, the Common Stock has been designated for quotation on the Principal Market. During the two
(2) years prior to the date hereof, (i) trading in the Common Stock has not been suspended by the SEC or the Principal Market and
(ii) the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension
or delisting of the Common Stock from the Principal Market. The Company and its Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses,
except where the failure to possess such certificates, authorizations or permits would not have, in the aggregate, a Material Adverse
Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit.

 

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

 

(jj)  No
Integrated Offering. The Company has not sold or issued any securities that would be integrated with the offering of the Securities
contemplated by this Agreement pursuant to the 1933 Act, the Rules and Regulations or the interpretations thereof by the SEC. None
of the Company, its Subsidiaries, any of their affiliates, and any Person acting on their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to require approval of stockholders of the Company for purposes of any applicable stockholder approval provisions,
including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the
securities of the Company are listed or designated. None of the Company, its Subsidiaries, their affiliates and any Person acting
on their behalf will take any action or steps referred to in the preceding sentence that would cause the offering of the Securities
to be integrated with other offerings for purposes of any such applicable stockholder approval provisions.

 

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(kk)  Brokerage
Fees; Commissions. Except as set forth in any of the Transaction Documents, the Registration Statement and the Prospectus,
neither the Company nor any of its Subsidiaries is a party to any contract, agreement or understanding with any person that would
give rise to a valid claim against the Company or the Buyers for a brokerage commission, finder's fee or like payment (other than
any payment to the Agent (as defined below)) in connection with the offering and sale of the Securities. The Company shall pay,
and hold the Buyer harmless against, any liability, loss or expense (including, without limitation, attorneys' fees and out-of-pocket
expenses) arising in connection with any such claim. The Company acknowledges that it has engaged Revere Securities LLC as placement
agent (the "Agent") in connection with the sale of the Securities. Other than the Agent, neither the Company nor
any of its Subsidiaries has engaged any placement agent or other agent in connection with the sale of the Securities.

 

(ll)  Consents.
Other than the Nasdaq's Listing of Additional Shares notification in connection with the transactions contemplated hereby, the
filing of the Certificate of Designations with the Secretary of State of the State of Delaware, and filing of the Prospectus Supplement
and Current Report on Form 8-K with the SEC with respect to the transactions contemplated hereby and the other Transaction Documents,
neither the Company nor any of its Subsidiaries is required to obtain any consent, authorization or order of, or make any filing
or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for
it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance
with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any of its
Subsidiaries is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the Closing
Date, and the Company and its Subsidiaries are unaware of any facts or circumstances that might prevent the Company or any of its
Subsidiaries from obtaining or effecting any of the registration, application or filings pursuant to the preceding sentence. The
Company is not in violation of the listing requirements of the Principal Market and has no knowledge of any facts that would reasonably
lead to delisting or suspension of the Common Stock in the foreseeable future. The issuance by the Company of the Securities shall
not have the effect of delisting or suspending the Common Stock from the Principal Market.

 

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

 

    	18

    	 

    

 

(nn)  Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares and Additional Shares issuable pursuant
to the terms of the Certificate of Designations will increase in certain circumstances. The Company further acknowledges that its
obligation to issue Conversion Shares and Additional Shares pursuant to the terms of the Certificate of Designations is absolute
and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders
of the Company.

 

(oo)  Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any,
in order to exempt the Company's issuance of the Securities and any Buyer's ownership of the Securities from the provisions of
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Certificate of Incorporation of the Company or the laws of the state of its incorporation
which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without
limitation, the Company's issuance of Securities and each Buyer's ownership of the Securities. Except as set forth in the Registration
Statement and the Prospectus, the Company does not have any stockholder rights plan or similar arrangement relating to accumulations
of beneficial ownership of Common Stock or a change in control of the Company.

 

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

 

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

 

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

 

(ss)  [Intentionally
omitted]

 

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

 

(uu)  Shell
Company Status. The Company is not, and has not been since October 5, 2012, an issuer identified in Rule 144(i)(1) of the 1933
Act. On October 5, 2012, the Company filed a Current Report on Form 8-K (as amended by a Current Report on Form 8-K/A filed by
the Company with the SEC on November 19, 2012) containing current "Form 10 information" (as defined in Rule 144 (i)(3))
with the SEC reflecting its status as an entity that was no longer an issuer described in Rule 144(i)(1)(i).

 

    	19

    	 

    

 

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

 

(ww)  SEC
Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely (other than certain
Current Reports on Form 8-K) filed all reports, schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof, and all exhibits
included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter
referred to as the "SEC Documents"). The Company has delivered to the Buyers or their respective representatives
true, correct and complete copies of the SEC Documents not available on the EDGAR system. As of their respective filing dates,
the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the
SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their
respective filing dates, the financial statements of the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such
financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during
the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the
case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
No other information provided by or on behalf of the Company to the Buyers which is not included in the SEC Documents contains
any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein,
in the light of the circumstance under which they are or were made, not misleading.

 

(xx)  Placement
Agent Agreement. The Company has entered into an Equity Distribution Agreement, dated as of January 15, 2015, with the Agent.

 

    	20

    	 

    

 

(yy)  Lock-Up
Agreements. The Company and each of the parties set forth on Exhibit B hereto has executed and delivered to the Company
a lock-up agreement in the form attached hereto as Exhibit C (collectively, the "Lock-Up Agreements").

 

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

 

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

 

(bbb) Indebtedness
and Other Contracts. Neither the Company nor any of its Subsidiaries, except as disclosed in the Registration Statement and
the Prospectus, (i) has any outstanding Indebtedness, (ii) is a party to any contract, agreement or instrument, the violation of
which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to
result in a Material Adverse Effect, (iii) is in violation of any term of or in default under any contract, agreement or instrument
relating to any Indebtedness, except where such violations and defaults would not result, in the aggregate, in a Material Adverse
Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in
the judgment of the Company's officers, has or is expected to have a Material Adverse Effect. The Registration Statement and the
Prospectus provide a detailed description of the material terms of any such outstanding Indebtedness. The Company hereby represents
that loans of up to an aggregate principal amount of $6,035,000 remain available to the Company pursuant that certain Loan and
Security Agreement, dated June 30, 2014, among RBL Capital Group, LLC, as lender, and TOT Group, Inc., TOT Payments, LLC, TOT BPS,
LLC, TOT FBS, LLC, Process Pink, LLC, TOT HPS, LLC and TOT New Edge, LLC, as co-borrowers subject only to the satisfaction or waiver
of the conditions precedents to each subsequent funding specified in Section 5.01(e) thereof.

 

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

 

    	21

    	 

    

 

(ddd) No
Disagreements with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company's
ability to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof,
the Company had discussions with its accountants about its financial statements previously filed with the SEC. Based on those discussions,
the Company has no reason to believe that it will need to restate any such financial statements or any part thereof.

 

4.           COVENANTS.

 

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

 

(b)   Maintenance
of Registration Statement.

 

(i)           For
so long as any of the Securities remain outstanding or are potentially issuable under the Certificate of Designations, the Company
shall use its reasonable best efforts to maintain the effectiveness of the Registration Statement for the issuance thereunder of
the Registrable Securities (as defined below); provided that, if at any time while the Preferred Shares are outstanding, (x) the
Company shall be ineligible to utilize Form S-3 (or any successor form) for the purpose of issuance of all of the Registrable Securities
or (y) the Registration Statement does not, at any time, cover a sufficient number of shares of Common Stock for issuances pursuant
to the terms of the Certificate of Designations, in each case, without any regard to any limitation or restriction on issuances
of shares set forth in the Certificate of Designations, the Company shall promptly amend or supplement the Registration Statement
or, if necessary, file a new registration statement in order to register such number of Registrable Securities not covered by the
Registration Statement or to maintain the effectiveness of the Registration Statement or such other registration statement for
this purpose. For the purpose of this Agreement, "Registrable Securities" means (i) the Conversion Shares
and the Additional Shares issued or issuable pursuant to the terms of the Preferred Shares and (ii) any shares of capital stock
of the Company issued or issuable with respect to the Preferred Shares, the Conversion Shares and/or the Additional Shares as a
result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, in each case, without regard
to any limitations on issuance or conversion thereof.

 

    	22

    	 

    

 

(ii)           If, on
any day after the Closing Date, issuances of all of the Registrable Securities cannot be made pursuant to the terms of the Certificate
of Designations pursuant to the Registration Statement (including, without limitation, because of a failure to keep the Registration
Statement effective, failure to file or cause to become effective any supplements or amendments thereto or other public filings
necessary, failure to disclose such information as is necessary for sales to be made pursuant to the Registration Statement, a
suspension or delisting of the Common Stock on its principal trading market or exchange, failure to register or list a sufficient
number of shares of Common Stock) (a "Maintenance Failure") then, as partial relief for the damages to any Buyer
by reason of any such delay in or reduction of its ability to receive Registrable Securities pursuant to the terms of the Certificate
of Designations (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay
to each Buyer an amount in cash equal to one and one-half percent (1.5%) of the aggregate Purchase Price of such Buyer's Preferred
Shares paid by such Buyer on each of the following dates: (i) the initial day of a Maintenance Failure; and (ii) on every thirtieth
(30th) day (pro-rated for periods totaling less than thirty (30) days) after the initial day after a Maintenance Failure until
such Maintenance Failure is cured. The Company shall also pay the reasonable fees of legal counsel of such Investor to enforce
the provisions hereof. The payments to which an Investor shall be entitled pursuant to this Section 4(b) are referred to herein
as "Registration Delay Payments." Registration Delay Payments shall be paid on the initial day of a Maintenance
Failure, as applicable, and thereafter on the earlier of (I) the thirtieth (30th) day after the event or failure giving rise to
the Registration Delay Payments has occurred and (II) the third (3rd) Business Day after the event or failure giving rise to the
Registration Delay Payments is cured. In the event the Company fails to make Registration Delay Payments when due in a timely manner,
such unpaid portion of the Registration Delay Payments shall bear interest at the rate of one and one-half percent (1.5%) per month
(prorated for partial months) until paid in full.

 

(c)   Prospectus
Supplement and Blue Sky. In the manner required by law, the Company shall have delivered to the Buyers, and as soon as practicable
after the Closing, the Company shall file, the Prospectus Supplement with respect to the Securities as required under and in conformity
with the 1933 Act, including Rule 424(b) thereunder. If required, the Company, on or before the Closing Date, shall take such action
as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities for sale
to the Buyers at the Closing pursuant to this Agreement under applicable securities or "Blue Sky" laws of the states
of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken
to the Buyers on or prior to the Closing Date. The Company shall make all filings and reports relating to the offer and sale of
the Securities required under applicable securities or "Blue Sky" laws of the states of the United States following the
Closing Date.

 

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

 

(e)   Listing.
The Company shall promptly secure the listing of all of the Conversion Shares and Additional Shares upon each securities exchange
and automated quotation system, if any, upon which the Common Stock is then listed, including the Principal Market (subject to
official notice of issuance) and shall use its reasonable best efforts to maintain, in accordance with the Transaction Documents,
such listing of all Conversion Shares and Additional Shares from time to time issuable under the terms of the Transaction Documents.
The Company shall maintain the authorization for quotation of the Common Stocks on the Principal Market or if such authorization
is not able to be maintained, on another Eligible Market (as defined in the Certificate of Designations). Neither the Company nor
any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the
Common Stock on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligations
under this Section 4(e).

 

    	23

    	 

    

 

(f)   Fees.
The Company shall reimburse the Lead Investor (a Buyer) or its designee(s) (in addition to any other expense amounts paid to any
Buyer or its counsel prior to the date of this Agreement) for all costs and expenses incurred in connection with the transactions
contemplated by the Transaction Documents (including all legal fees and disbursements in connection therewith, documentation and
implementation of the transactions contemplated by the Transaction Documents and due diligence in connection therewith) in an amount
not to exceed, without the prior approval of the Company, $65,000 (the "Legal Fee Cap"), which amount, at the
option of the Buyer, may be withheld by such Buyer from its Purchase Price at the Closing to the extent not previously reimbursed
by the Company. The Company shall be responsible for the payment of any placement agent's fees, financial advisory fees, or broker's
commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby, including,
without limitation, any fees or commissions payable to the Agent and all fees payable to the Bank in connection with the Deposit
Account Control Agreement. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, reasonable attorney's fees and out-of-pocket expenses) arising in connection with any claim relating to any
such payment.

 

(g)   Pledge
of Securities. The Company acknowledges and agrees that the Securities may be pledged by any holder of Securities (an "Investor")
in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge
of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a
pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company
pursuant to this Agreement or any other Transaction Document. The Company hereby agrees, subject to applicable securities laws,
to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of
the Securities to such pledgee by an Investor.

 

    	24

    	 

    

 

(h)   Disclosure
of Transactions and Other Material Information. On or before 8:30 a.m., New York City time, on the first Business Day after
this Agreement has been executed, the Company shall issue a press release reasonably acceptable to the Buyers and file a Current
Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the
1934 Act and attaching the material Transaction Documents (including, without limitation, this Agreement, the Certificate of Designations,
the form of Lock-Up Agreement and the Voting Agreement) as exhibits to such filing (including all attachments), the "8-K
Filing"). As of immediately following the filing of the 8-K Filing with the SEC, no Buyer shall be in possession of any
material, nonpublic information received from the Company, any of its Subsidiaries or any of their respective officers, directors,
employees, affiliates or agents, that is not disclosed in the 8-K Filing or in prior filings with the SEC. 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 Buyers or any of their affiliates, on the other hand,
shall terminate. The Company understands and confirms that each of the Buyers will rely on the foregoing in effecting transactions
in securities of the Company. The Company shall not, and shall cause each of its Subsidiaries and its and each of their respective
officers, directors, employees, affiliates and agents, not to, provide any Buyer with any material, nonpublic information regarding
the Company or any of its Subsidiaries from and after the filing of the 8-K Filing with the SEC without the express prior written
consent of such Buyer. If a Buyer has, or believes it has, received any such material, nonpublic information regarding the Company
or any of its Subsidiaries from the Company, any of its Subsidiaries or any of their respective officers, directors, employees,
affiliates or agents, it may provide the Company with written notice thereof in which case the Company shall, within two (2) Trading
Days (as defined in the Certificate of Designations) of receipt of such notice, make public disclosure of such material, nonpublic
information. In the event of a breach of the foregoing covenant by the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees, affiliates and agents, in addition to any other remedy provided herein or in the Transaction
Documents, a Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise,
of such material, nonpublic information without the prior approval by the Company, its Subsidiaries, or any of its or their respective
officers, directors, employees, affiliates or agents. No Buyer shall have any liability to the Company, its Subsidiaries, or any
of its or their respective officers, directors, employees, affiliates or agents for any such disclosure. To the extent the Company
or any of its or their respective officers, directors, employees, affiliates or agents delivers any material, non-public information
to a Buyer without such Buyer's consent, the Company hereby covenants and agrees that such Buyer shall not have any duty of confidentiality
to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect
to, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or
agents not to trade on the basis of, such material, non-public information. Subject to the foregoing, neither the Company, its
Subsidiaries nor any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated
hereby; provided, however, that the Company shall be entitled, without the prior approval of any Buyer, to make any
press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and
contemporaneously therewith and (ii) as is required by applicable law, regulation or any Eligible Market on which the Company's
securities are then listed or quoted (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection
with any such press release or other public disclosure prior to its release). Without the prior written consent of any applicable
Buyer, neither the Company nor any of its Subsidiaries or affiliates shall disclose the name of such Buyer in any filing, announcement,
release or otherwise other than in connection with the Registration Statement unless such disclosure
is required by law, regulation or any Eligible Market on which the Company's securities are then listed or quoted. As
used herein, "Business Day" means any day other than Saturday, Sunday or other day on which commercial banks in
The City of New York are authorized or required by law to remain closed.

 

(i)   Additional
Preferred Shares; Variable Securities. So long as any Buyer beneficially owns any Securities, the Company will not issue any
Preferred Shares other than to the Buyers as contemplated hereby and the Company shall not issue any other securities that would
cause a breach or default under the Certificate of Designations. Other than in connection with the acquisition of the PayOnline
group of companies, and except for any issuances of securities to any of the Buyers, for so long as any Preferred Shares remain
outstanding or potentially may be issued hereunder, the Company shall not, in any manner, issue or sell any rights, warrants or
options to subscribe for or purchase Common Stock or directly or indirectly convertible into or exchangeable or exercisable for
Common Stock at a price which varies or may vary with the market price of the Common Stock, including by way of one or more reset(s)
to any fixed price unless the conversion, exchange or exercise price of any such security cannot be less than the then applicable
Conversion Price (as defined in the Certificate of Designations) with respect to the Common Stock into which any of Preferred Shares
are convertible or redeemable, as applicable.

 

    	25

    	 

    

 

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

 

(k)   Reservation
of Shares. So long as any Buyer owns any Securities, the Company shall take all action necessary to at all times have authorized,
and reserved for the Required Reserve Amount. If at any time the number of shares of Common Stock authorized and reserved for issuance
is not sufficient to meet the Required Reserve Amount or the number of shares of Common Stock issued and issuable pursuant to the
terms of the Preferred Shares at any time exceeds the Required Reserve Amount initially reserved by the Company and the Company
is able under applicable securities laws to issue more shares pursuant to the Registration Statement or other registration statement,
the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including,
without limitation, calling a special meeting of stockholders to authorize additional shares to meet the Company's obligations
under Section 3(e) and this Section 3(k), and, in the case of an insufficient number of authorized shares, obtain stockholder approval
of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in
the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Required Reserve
Amount. The initial number of shares of Common Stock reserved for conversions of the Preferred Shares and each increase in the
number of shares so reserved shall be allocated pro rata among the Buyers based on the number of Preferred Shares held by each
Buyer at the time of issuance of the Preferred Shares or increase in the number of reserved shares, as the case may be. In the
event a Buyer shall sell or otherwise transfer any of such Buyer's Preferred Shares, each transferee shall be allocated a pro rata
portion of the number of reserved shares of Common Stock reserved for such transferor. Any shares of Common Stock reserved and
allocated to any Person which ceases to hold any Preferred Shares (other than pursuant to a transfer of Preferred Shares in accordance
with the immediately preceding sentence) shall be allocated to the remaining Investors, pro rata based on the number of Preferred
Shares then held by such Investors.

 

(l)   
Conduct of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any
law, ordinance or regulation of any governmental entity, including, without limitation, FCPA, OFAC regulations and Money Laundering
Laws, except where such violations would not result, in the aggregate, in a Material Adverse Effect. 

 

    	26

    	 

    

 

(m)   Lock-Up.
The Company shall not amend or waive any provision of the Lock-Up Agreements except to extend the term of the lock-up period contained
therein and shall enforce the provisions of the Lock-Up Agreements in accordance with their terms. If any party to a Lock-Up Agreement
breaches any provision of a Lock-Up Agreement, the Company shall promptly use its best efforts to seek specific performance of
the terms of such Lock-Up Agreement.

 

(n)   Voting
Agreement. The Company shall use its reasonable best efforts to effectuate the transactions contemplated by the Voting Agreement
substantially in the form attached hereto as Exhibit D (the "Voting Agreement"), executed on or prior to
the Closing by the Company and each of Kenges Rakishev, Novatus Holding PTE. Ltd., a company organized under the laws of the British
Virgin Islands, Oleg Firer, Steven Wolberg, James Caan, Jonathan New, David P. Kelley II, William Healy, Beno Distribution, Ltd.,
a company organized under the laws of the British Virgin Islands, Cayman Invest S.A., a company organized under the laws of the
British Virgin Islands, and Mayor Trans Ltd., a company incorporated in the Republic of Seychelles holding, immediately prior to
the date hereof, no less than 50% of the issued and outstanding Common Stock (collectively, the "Principal Stockholders"). 
The Company shall not amend or waive any provision of the Voting Agreement and shall enforce the provisions of the Voting Agreement
in accordance with its terms. If any of the Principal Stockholders breaches any provision of the Voting Agreement, the Company
shall promptly use its best efforts to seek specific performance of the terms of such Voting Agreement in accordance with the terms
thereof.  In addition, if the Company receives any notice from any of the Principal Stockholders pursuant to the Voting Agreement,
the Company shall promptly, but in no event later than two (2) Business Days, deliver a copy of such notice to each Buyer.

 

(o)   Additional
Issuances of Securities.

 

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

 

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

 

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

 

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

 

(ii)           From the
date hereof until the date no Preferred Shares are outstanding (the "Trigger Date"), the Company shall not, (x)
(i) directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant
or any option to purchase or other disposition of) any of its or its Subsidiaries' equity or equity equivalent securities, including
without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of Common Stock or Common Stock Equivalents (any such
offer, sale, grant, disposition or announcement being referred to as a "Subsequent Placement"), or (ii) be party
to any solicitations, negotiations or discussions with regard to the foregoing or (y) directly or indirectly, (i) file any registration
statement with the SEC or file any amendment or supplement thereto, (ii) cause any registration statement to be declared effective
by the SEC or (iii) grant any registration rights to any Person that can be exercised prior to such date as set forth above.

 

    	27

    	 

    

 

(iii)          From
the Trigger Date until the one (1) year anniversary of the Trigger Date, the Company will not, directly or indirectly, effect any
Subsequent Placement unless the Company shall have first complied with this Section 4(o)(iii).

 

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

 

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

 

    	28

    	 

    

 

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

 

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

 

(5)           Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Buyers shall acquire from
the Company, and the Company shall issue to the Buyers, the number or amount of Offered Securities specified in the Notices of
Acceptance, as reduced pursuant to Section 4(o)(iii)(4) above if the Buyers have so elected, upon the terms and conditions specified
in the Offer. The purchase by the Buyers of any Offered Securities is subject in all cases to the preparation, execution and delivery
by the Company and the Buyers of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance
to the Buyers and their respective counsel.

 

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

 

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

 

(8)           Notwithstanding
anything to the contrary in this Section 4(o) and unless otherwise agreed to by the Buyers, the Company shall either confirm in
writing to the Buyers that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case in such a manner such that the Buyers will not be in possession of
material non-public information, by the fifteenth (15th) Business Day following delivery of the Offer Notice. If by
the fifteenth (15th) Business Day following delivery of the Offer Notice no public disclosure regarding a transaction
with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received
by the Buyers, such transaction shall be deemed to have been abandoned and the Buyers shall not be deemed to be in possession of
any material, non-public information with respect to the Company. Should the Company decide to pursue such transaction with respect
to the Offered Securities, the Company shall provide each Buyer with another Offer Notice and each Buyer will again have the right
of participation set forth in this Section 4(o)(iii). The Company shall not be permitted to deliver more than one such Offer Notice
to the Buyers in any 60 day period (other than the Offer Notices contemplated by the last sentence of Section 4(o)(iii)(2) of this
Agreement).

 

(iv)        The
restrictions contained in subsections (ii) and (iii) of this Section 4(o) shall not apply in connection with the issuance of any
Excluded Securities (as defined in the Certificate of Designations).

 

(p)   Stockholder
Approval. The Company shall file with the SEC and provide each stockholder of the Company with an information statement complying
with the requirements of the 1934 Act and substantially in the form that has been previously reviewed and approved by the Buyers
and Schulte Roth & Zabel LLP informing such stockholders of the actions taken in accordance with the Resolutions and of the
Stockholder Approval (each, as defined below). In addition to the foregoing, if required by any governmental or regulatory agency,
the Company shall provide each stockholder entitled to vote at a special or annual meeting of stockholders of the Company (the
"Stockholder Meeting"), which shall be called at or prior to the Company's next annual meeting of stockholders,
but in no event later than the Stockholder Meeting Deadline (as defined below), a proxy statement (the "Proxy Statement"),
in a form reasonably acceptable to the Buyers after review by Schulte Roth & Zabel LLP, soliciting each such stockholder's
affirmative vote at the Stockholder Meeting for approval of resolutions (the "Resolutions") providing for the
issuance of all of the Securities as described in the Transaction Documents in accordance with applicable law, the provisions of
the Certificate of Incorporation and the rules and regulations of the Principal Market (such affirmative approval being referred
to herein as the "Stockholder Approval"), and the Company shall use its reasonable best efforts to solicit its
stockholders' approval of such Resolutions and to cause the Board of Directors of the Company to recommend to the stockholders
that they approve the Resolutions. The Company shall be obligated to seek to obtain the Stockholder Approval by the Stockholder
Meeting Deadline. If, despite the Company's reasonable best efforts, the Stockholder Approval is not obtained at the Stockholder
Meeting, the Company shall cause an additional Stockholder Meeting to be held each calendar quarter thereafter until Stockholder
Approval is obtained. In connection with the stockholders' meeting contemplated by this Section 4(p), the Company shall (i) use
its best efforts to solicit its stockholders' approval of the Resolutions and (ii) cause at least a majority of the Board of Directors
of the Company to recommend to the stockholders that they approve the Resolutions. As used herein, "Stockholder Meeting
Deadline" means (i) the date that is sixty (60) days after the Closing Date in the event the Proxy Statement is subject
to review by the SEC and (ii) the date that is thirty (30) days after the Closing Date in the event the Proxy Statement is not
subject to review by the SEC.

 

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(q)   Conversion
Share Characteristics. If Conversion Shares and/or Additional Shares are issued pursuant to the terms of the Certificate of
Designations, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of the 1933 Act, the Conversion Shares
and/or the Additional Shares, as applicable, shall take on the registered characteristics of the Preferred Shares with respect
to which such Conversion Shares and/or Additional Shares are being issued, and the holding period of such Preferred Shares may
be tacked on to the holding period of the Conversion Shares and/or Additional Shares, respectively.  The Company agrees not
to take any position contrary to this Section 4(q).

 

(r)   Reporting
Status. Until the date on which the Buyers shall have sold all of the Conversion Shares and Additional Shares and none
of the Preferred Shares are outstanding (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, and the Company shall take all actions necessary to maintain its eligibility to issue Securities to the Buyers
on Form S-3.

 

(s)    Financial
Information. The Company agrees to send the following to each Buyer during the Reporting Period, unless the following are filed
with the SEC through EDGAR and are available to the public through the EDGAR system (i) within one (1) Business Day after the filing
thereof with the SEC, a copy of its Annual Reports on Form 10-K, any Quarterly Reports on Form 10-Q, any Current Reports on Form
8-K (or any analogous reports under the 1934 Act) and any registration statements (other than on Form S-8) or amendments filed
pursuant to the 1933 Act, (ii) on the same day as the release thereof, facsimile or e-mailed copies of all press releases issued
by the Company or any of its Subsidiaries, and (iii) copies of any notices and other information made available or given to the
stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders.

 

    	31

    	 

    

 

(t)   Public
Information. At any time during the period commencing from the six (6) month anniversary of the Closing Date and ending at
such time that all of the Securities, if a registration statement is not available for the resale of all of the Securities, may
be sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1),
if the Company shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the
failure to satisfy the current public information requirement under Rule 144(c) or (ii) if the Company has ever been an issuer
described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set
forth in Rule 144(i)(2) (a "Public Information Failure") then, as partial relief for the damages to any Buyer
by reason of any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each such Buyer an amount in cash equal to one and one-half percent
(1.5%) of the aggregate Purchase Price of such Buyer's Securities on the day of a Public Information Failure and on every thirtieth
day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (i) the date such Public Information
Failure is cured and (ii) such time that such public information is no longer required pursuant to Rule 144. The Company shall
also pay the reasonable fees of legal counsel of such Investor to enforce the provisions hereof. The payments to which a holder
shall be entitled pursuant to this Section 4(t) are referred to herein as "Public Information Failure Payments."
Public Information Failure Payments shall be paid on the earlier of (I) the last day of the calendar month during which
such Public Information Failure Payments are incurred and (II) the third Business Day after the event or failure giving
rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure
Payments to such Buyer when due in a timely manner, such unpaid portion of the Public Information Failure Payment(s)
shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full.

 

(u)   FATCA.
Notwithstanding anything to contrary contained herein and other Transaction Documents, if a payment made to a Buyer under any
Preferred Shares or Conversion Shares would be subject to U.S. federal withholding Tax imposed by FATCA if such Buyer were to
fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of
the Code, as applicable), such Buyer shall deliver to Company at the time or times prescribed by law and at such time or times
reasonably requested by the Company such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i)
of the Code) and such additional documentation reasonably requested by the Company as may be necessary for the Company to comply
with its obligations under FATCA and to determine that such Buyer has complied with such Buyer’s obligations under FATCA
or to determine the amount to deduct and withhold from such payment under FATCA. For purposes of this Section 4(u), "FATCA"
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof
and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

(v)  Closing
Documents. On or prior to thirty (30) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered,
to each Buyer and Schulte Roth & Zabel LLP a complete closing set of the executed Transaction Documents, Securities and any
other documents required to be delivered to any party pursuant to Section 7 hereof or otherwise.

 

    	32

    	 

    

 

5.           REGISTER;
TRANSFER AGENT INSTRUCTIONS.

 

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

 

(b)   Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent,
in the form of Exhibit E attached hereto (the "Irrevocable Transfer Agent Instructions") to issue certificates
or credit shares to the applicable balance accounts at DTC, registered in the name of each Buyer or its respective nominee(s),
for the Conversion Shares and the Additional Shares issuable pursuant to the terms of the Transaction Documents in such amounts
as specified from time to time by each Buyer to the Company upon conversion or redemption of the Preferred Shares or as payment
of Dividends with respect to the Preferred Shares. The Company warrants that no instruction other than the Irrevocable Transfer
Agent Instructions referred to in this Section 5(b) will be given by the Company to its transfer agent, and any subsequent transfer
agent, and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the other Transaction Documents. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to each Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach
of its obligations under this Section 5 will be inadequate and agrees, in the event of a breach or threatened breach by the Company
of the provisions of this Section 5, that each Buyer shall be entitled, in addition to all other available remedies, to an order
and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic
loss and without any bond or other security being required.

 

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

 

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

 

(a)   Such
Buyer shall have executed this Agreement and delivered the same to the Company.

 

(b)   Such
Buyer shall have delivered its Purchase Price to the Company (less, in the case of the Lead Investor, the amounts withheld pursuant
to Section 4(f)) for the Preferred Shares being purchased by such Buyer at the Closing by wire transfer of immediately available
funds pursuant to the wire instructions provided by the Company.

 

    	33

    	 

    

 

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

 

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

 

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

 

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

 

(a)   The
Company and each of its Subsidiaries shall have duly executed and delivered to such Buyer each of the following to which it is
a party each of the Transaction Documents, (ii) the Preferred Shares (allocated in such amounts as such Buyer shall request), being
purchased by such Buyer at the Closing pursuant to this Agreement.

 

(b)   Such
Buyer shall have received the opinion of Snell & Wilmer L.L.P., the Company's outside counsel, dated as of the Closing Date,
in substantially the form of Exhibit F attached hereto.

 

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

 

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

 

(e)   The
Company shall have delivered to such Buyer a certificate evidencing the Company's and each of its U.S. Subsidiaries' qualification
as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which
the Company and its Subsidiaries conduct business or a bring down of such good standing from Incorporating Services, Ltd., as of
a date within ten (10) days of the Closing Date.

 

    	34

    	 

    

 

(f)   The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation of the Company and each of its
U.S. Subsidiaries (other than the Subsidiaries formed in the State of Florida) as certified by the Secretary of State (or comparable
office) of the jurisdiction of formation of the Company and each of its Subsidiaries or a bring down of such good standing from
Incorporating Services, Ltd. within ten (10) days of the Closing Date.

 

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

 

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

 

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

 

(j)   The
Common Stock (I) shall be designated for quotation or listed on the Principal Market and (II) shall not have been suspended, as
of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market, nor shall suspension by the SEC or
the Principal Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal Market or
(B) by falling below the minimum listing maintenance requirements of the Principal Market.

 

(k)   The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities.

 

    	35

    	 

    

 

(l)   The
Registration Statement shall be effective and available for the issuance and sale of the Securities hereunder and the Company shall
have delivered to such Buyer the Prospectus and the Prospectus Supplement as required thereunder.

 

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

 

(n)   The
Company shall have delivered to each Buyer a Lock-Up Agreement in the form attached hereto as Exhibit C executed and delivered
by each of the Persons listed on Exhibit B hereto.

 

(o)   The
Voting Agreement in the form attached hereto as Exhibit D shall have been executed and delivered to such Buyer by the Company
and each of the Principal Stockholders.

 

(p)   The
Certificate of Designations in the form attached hereto as Exhibit A shall have been filed with the Secretary of State of
the State of Delaware and shall be in full force and effect, enforceable against the Company in accordance with its terms and shall
not have been amended.

 

(q)   The
Company shall have submitted to the Principal Market a Listing of Additional Shares notification in connection with the transactions
contemplated hereby and the Principal Market shall have approved, orally or in writing, the transactions contemplated by this Agreement
and the other Transaction Documents and the issuance of the Securities.

 

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

 

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

 

    	36

    	 

    

 

9.           MISCELLANEOUS.

 

(a)   Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

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

 

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

 

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

 

    	37

    	 

    

 

(e)   Entire
Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or written
agreements between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein
contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or prospectively), only with the written
consent of the Company and the holders of at least sixty-five percent (65%) of the aggregate number of Registrable Securities
issued or issuable under the Transaction Documents as of the date hereof and shall include the Lead Investor so long as the
Lead Investor or any of its affiliates holds any Registrable Securities (the "Required Holders").
Any amendment or waiver effected in accordance with, and any amendment to this Agreement made in conformity with the
provisions of this Section 9(e) shall be binding on each Buyer and holders of Securities of the Company as applicable. No
such amendment shall be effective to the extent that it applies to less than all of the Buyers of Securities. No
consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any
of the Transaction Documents unless the same consideration (other than the reimbursement of legal fees) also is offered to
all of the parties to the Transaction Documents or the holders of Preferred Shares, as the case may be. The Company has not,
directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions
contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing,
the Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment or promise or has any
other obligation to provide any financing to the Company or otherwise.

 

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

 

If to the Company:

 

Net Element, Inc.

363 NE 163rd Street, Suite 705

North Miami Beach, FL 33160

Telephone:        (786)
923-0515

Facsimile:         (786)
272-0696

E-mail:              swolberg@netelement.com

Attention:         Chief
Legal Officer

 

with
a copy (for informational purposes only) to:

 

Snell
& Wilmer L.L.P.

600
Anton Boulevard, 14th Floor

Costa
Mesa, CA 92626

 

    	38

    	 

    

 

Telephone: 714-427-7442

Facsimile:
714-427-7799

E-mail:           spavluk@swlaw.com

Attention:
Serge V. Pavluk

 

If
to the Transfer Agent:

 

Continental
Stock Transfer & Trust Company

17
Battery Place, 8th Floor

New
York, NY 10004

Telephone:       (212)
845-3217

Email:
mmullings@continentalstock.com

Attention:        Michael
G. Mullings

 

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

 

with
a copy (for informational purposes only) to:

 

Schulte
Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone:        (212) 756-2000

Facsimile:         (212) 593-5955

Attention:         Eleazer N. Klein, Esq.

E-mail:              eleazer.klein@srz.com

 

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

 

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

 

    	39

    	 

    

 

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

 

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

 

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

 

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

 

    	40

    	 

    

 

(ii)        Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim for indemnification in
respect thereof is to be made against any indemnifying party under this Section 9(k), deliver to the indemnifying party a written
notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnitee; provided, however, that an Indemnitee shall have
the right to retain its own counsel with the fees and expenses of not more than one counsel for such Indemnitee to be paid by the
indemnifying party, if, in the reasonable opinion of the Indemnitee, the representation by such counsel of the Indemnitee and the
indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnitee and any other
party represented by such counsel in such proceeding. Legal counsel referred to in the immediately preceding sentence shall be
selected by the Investors holding at least a majority of the Registrable Securities. The Indemnitee shall cooperate fully with
the indemnifying party in connection with any negotiation or defense of any such action or Indemnified Liabilities by the indemnifying
party and shall furnish to the indemnifying party all information reasonably available to the Indemnitee that relates to such action
or Indemnified Liabilities. The indemnifying party shall keep the Indemnitee fully apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action,
claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the
Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified
Liabilities or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to the Indemnitee under this Section 9(k), except to
the extent that the indemnifying party is prejudiced in its ability to defend such action.

 

(iii)        The
indemnification required by this Section 9(k) 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 Indemnified Liabilities are incurred.

 

(iv)        The
indemnity agreements contained herein shall be in addition to (x) any cause of action or similar right of the Indemnitee against
the indemnifying party or others, and (y) any liabilities the indemnifying party may be subject to pursuant to the law.

 

(v)        Except where
the following damages have been awarded to a third party and a party hereto has a duty of indemnification with respect to such
third party claim, in no event shall any claim for incidental, special, punitive or consequential damages of any nature whatsoever
be made by any party to the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby.

 

    	41

    	 

    

 

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

 

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

 

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

 

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

 

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

 

[Signature Page Follows]

 

    	42

    	 

    

 

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

 

	 	COMPANY:	 
	 	 	 
	 	NET ELEMENT, INC.	 
	 	 	 
	 	By:	 	 
	 	 	
        Name:

        
	 
	 	 	
        Title: 
	 

 

[Signature Page to Securities 

Purchase Agreement]

 

    	 

    	 

    

 

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

 

	 	BUYERS:	
	 	 	
	 	[BUYER]	 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

	 	Check as appropriate:
	 	Accredited Investor	 ̈
	 	QIB	 ̈

 

    	44

    	 

    

 

SCHEDULE OF BUYERS

 

	(1)	 	(2)	 	(3)	 	(4)	 	(5)
	 	 	 	 	 	 	 	 	 
	Buyer	 	Address, E-mail and

Facsimile Number	 	Number of Preferred

Shares	 	Purchase Price	 	Legal Representative's Address

and Facsimile Number
	 	 	 	 	 	 	 	 	 

 

    	 

    	 

    

 

EXHIBITS

 

	Exhibit A	Form of Certificate of Designations
	Exhibit B	Parties to Lock-Up Agreement
	Exhibit C	Form of Lock-Up Agreement
	Exhibit D	Form of Voting Agreement
	Exhibit E	Form of Irrevocable Transfer Agent Instructions
	Exhibit F	Form of Opinion of Company's Outside Counsel
	Exhibit G	Form of Secretary's Certificate
	Exhibit H	Form of Officers Certificate

 

SCHEDULES 

	 	 
	Schedule I	List of General Use Free Writing Prospectus
	Schedule 4(d)	Use of Proceeds

 

    	 

    	 

    

 

SCHEDULE I

 

None.

 

    	 

    	 

    

 

SCHEDULE 4(d)

 

Proceeds from the sale of the Preferred Stock
will be used (i) to pay all legal and other fees, costs and expenses related to and in connection with the transactions contemplated
by the Transaction Documents, but not to pay the fees and expenses of the Agent in an amount exceeding $250,000; (ii) for general
corporate purposes, including working capital, sales and marketing activities, general and administrative matters, repayment of
indebtedness, and capital expenditures; (iii) to pay the cash portion of the acquisition of PayOnline group of companies; and (iv)
for the purchase of residual distributions from agents.

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