Document:

EXHIBIT 10.1

 

 

 

 

 

 

 

 

 

 

SECURITIES PURCHASE AGREEMENT

BY AND AMONG

NXT-ID, INC.

AND

THE PURCHASERS PARTY HERETO

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

 

Schedules and
Exhibits

TO

Securities PURCHASE AGREEMENT

 

	Schedule 3.2	Subsidiaries
	Schedule 3.3.2	Capitalization Matters 
	Schedule 3.4	Authorization; Binding Obligation
	Schedule 3.6	Absence of Liabilities
	Schedule 3.8	Changes
	Schedule 3.9	Title to Properties and Assets; Liens
	Schedule 3.10.1	Owned Intellectual Property and Licensed Intellectual Property
	 	 
	 	 
	 	 
	Exhibit A	Schedule of Purchasers
	Exhibit B	Form of Warrant
	Exhibit C	Funding Instructions
	Exhibit D	Form of Legal Opinio
	Exhibit E	Form of Registration Rights Agreement
	Exhibit F	Form of Escrow Agreement

 

 

 

 

 

 

 

 

 

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NXT-ID, INC.

SECURITIES
PURCHASE AGREEMENT

THIS SECURITIES
PURCHASE AGREEMENT (the “Agreement”) is entered into as of the date set forth on the signature page hereto
by and among Nxt-ID, Inc., a Delaware corporation (the “Company”) and the purchasers identified on Exhibit
A on the date hereof (which purchasers are hereinafter collectively referred to as the “Purchasers”
and each individually as, a “Purchaser”).

BACKGROUND

A.          Unless
otherwise defined in this Agreement, capitalized terms used in this Agreement shall have the respective meanings ascribed to such
terms in Section 8.

B.          The Company is offering
(the “Offering”) restricted common shares, par value $0.0001 per share, of the Company (the “Shares”)
and warrants (the “Warrants”) (the Shares and the Warrants collectively referred to herein as the “Securities”)
to a limited number of persons who qualify as “accredited investors” as defined in Rule 501 of Regulation D promulgated
under the Securities Act at a purchase price for the Shares and/or the Warrants as described below, pursuant to the terms set forth
in the Company’s Confidential Private Placement Memorandum, dated December 26, 2013, as may be amended and/or supplemented,
from time to time (collectively, the “Memorandum”).

 

C.          The Securities are
being offered on a “best efforts” basis with respect to the minimum of $250,000 (the “Minimum Offering
Amount”), which the Minimum Offering Amount has already been met, and thereafter on a “best efforts”
basis up to the maximum of $1,000,000 (the “Maximum Offering Amount”). The foregoing does not include
the over-allotment option if the Offering is oversubscribed. In such event, the Company reserves the option to increase the raise
up to fifty (50%) percent, resulting in a total raise of $1,500,000 (the “Over-Allotment Option”), before
expenses.

 

D.          The purchase price
of the Shares shall be ninety (90%) percent of the five (5) day average closing bid price prior to closing, with a maximum Purchase
Price of $3.25 (the “Purchase Price”). The Warrants shall have a five (5) year life with a strike price
equal to the Purchase Price (the “Exercise Price”), which may be exercised cashless if the underlying
shares are not registered after nine (9) months from final Closing (“closing” is defined below).

 

E.          The Company
desires to issue and sell the Securities to each Purchaser in one or more closings (each a “Closing”
and collectively the “Closings”) as set forth herein.

NOW, THEREFORE, in
consideration of the representations, warranties, covenants and agreements herein contained and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

1.             AGREEMENT
TO SELL AND PURCHASE.

1.1          Authorization
of Securities. The Board of Directors of the Company has authorized (i) the sale of up to 500,000 Shares; (ii) the sale of
up to one million five hundred thousand (1,500,000) Warrants (on a pro-rated basis); and (iii) the reservation of 1,000,000 restricted
common shares to be issued upon exercise of the Warrants (the “Warrant Shares”).

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1.2          Initial Sale and Purchase of Securities. Subject to the terms and conditions hereof, and in reliance upon the representations,
warranties and covenants contained herein, at the Initial Closing, the Company shall issue and sell to each Purchaser, and each
Purchaser shall purchase from the Company, the number of Securities set forth opposite such Purchaser’s name on Exhibit
A under the “Initial Securities” column. The purchase price for the Shares shall be ninety (90%) percent of the
five (5) day average closing bid price prior to closing, with a maximum Purchase Price of $3.25, and the Warrants shall have a
five (5) year life with a strike price of $[x.xx] which may be exercised cashless if the underlying shares are not registered
after nine (9) months from final Closing (subject to appropriate and proportionate adjustment for stock dividends payable in shares
of, forward or reverse stock splits and other subdivisions and combinations of, and recapitalizations and like occurrences with
respect to, the Shares, the “Per Securities Purchase Price”). The minimum purchase price by each Purchaser
is $50,000, unless the Company and the Placement Agent agree, in their mutual discretion, to allow a Purchaser to purchase partial
Securities.

1.3          Subsequent Sales and Purchases of Shares. Subject to the terms and conditions hereof, and in reliance upon the representations,
warranties and covenants contained herein, at each Subsequent Closing, the Company shall issue and sell to each Purchaser who is
identified as a “Subsequent Closing Purchaser” on Exhibit A, which shall be deemed amended at each such subsequent
Closing to add each such additional Purchaser (each, a “Subsequent Closing Purchaser”), and each Subsequent
Closing Purchaser shall purchase from the Company, the number of Securities set forth opposite such Purchaser’s name on Exhibit
A at the Per Securities Purchase Price.

1.4          Issuance of Warrants. The Warrant shall be in form and substance substantially the same as the form of Warrant in
Exhibit B.

2.             CLOSINGS,
DELIVERY AND PAYMENT.

2.1          Initial Closing.
Subject to the conditions set forth in Section 5 herein, the initial closing of the sale and purchase of the Securities (the “Initial
Closing”), shall take place electronically on such date and at such time as is agreed between the Company and the
Placement Agent (such date the “Initial Closing Date”), in no event later than December 30, 2013 (the
“Termination Date”). Subject to the foregoing, at the Initial Closing, the Company may sell up to a
maximum of 1,330,000 Shares and Warrants, excluding the Over-Allotment Option. The Securities sold at the Initial Closing are
sometimes referred to herein as “Initial Securities.”

2.2          Subsequent Closings. Subject to the conditions set forth in Section 5, each Subsequent Closing shall take place electronically
on such date and at such time as is agreed between the Company and the Placement Agent (such date the “Subsequent Closing
Date”), in no event later than January 31, 2014 (the “Final Termination Date”). The Securities
sold at the Subsequent Closings are sometimes referred to herein as “Subsequent Securities.”

2.3          Delivery; Payment. At each Closing, subject to the terms and conditions hereof, the Purchasers will deliver the full
amount of the Purchase Price in cash by wire transfer of immediately available funds in accordance with instructions attached hereto
as Exhibit C, or as the Company shall otherwise direct and the Company will deliver instructions to its transfer agent authorizing
the issuance of the Shares and/or Warrant included in the Securities purchased by such Purchaser or Subsequent Closing Purchaser,
as the case may be, at such Closing and each registered in such Purchaser’s name to purchase such number of Warrant Shares
included in the Warrants purchased by such Purchaser or Subsequent Closing Purchaser, as the case may be, at such Closing. Within
five (5) business days following any Closing the Company will deliver, unless otherwise requested by any Purchaser, one (1) certificate
registered in such Purchaser’s name representing the Shares included in the Securities purchased by such Purchaser at such
Closing and the Warrants included in the Securities purchased by such Purchaser at such Closing. The Company and the Placement
Agent, in their mutual discretion, may allow a Purchaser to purchase partial Securities, in which case the Purchaser shall receive
a certificate representing the appropriate number of Shares included in such partial Securities and/or a Warrant for the appropriate
number of Warrant Shares.

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3.          REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

The Company represents
and warrants to each of the Purchasers that the statements made in this Section 3, except as qualified in the disclosure schedules
referenced herein and attached hereto (the “Schedules”), are true and correct on the date hereof, as
of the Initial Closing and shall be true and correct as of each Subsequent Closing, except as qualified by any updated Schedules
delivered at the Subsequent Closing in accordance with Section 5.1.1 herein, all of which qualifications in the Schedules attached
hereto and updated Schedules delivered at the Subsequent Closing shall be deemed to be representations and warranties as if made
hereunder. The Schedules shall be arranged to correspond to the numbered paragraphs contained in this Section 3. For the avoidance
of doubt, information disclosed in one section of the Schedule shall not be deemed disclosed in any other section of the Schedule
unless there is an explicit cross reference to such other section. For purposes of this Section 3, “knowledge” shall
mean the personal knowledge of any of the Company’s officers or directors or what they would have known upon having made
reasonable inquiry.

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

3.2          Subsidiaries. Schedule 3.2 contains a true and complete list of each of the Company’s Subsidiaries and
their respective jurisdictions of organization. Except as set forth on Schedule 3.2, no entity owns or controls any ownership
interest or profits interest in any other corporation, limited liability company, limited partnership or other entity. The Company
owns and controls as to all matters 100% of the outstanding ownership and profits interests in each Subsidiary listed on Schedule
3.2. Except as set forth on Schedule 3.2, no entity is a participant in any joint venture, partnership or similar arrangement.

3.3          Capitalization Matters.

 

3.3.1.          Immediately
prior to the Initial Closing and any Subsequent Closing, if and as applicable, the total authorized capital stock of the Company,
consists of: (a) 100,000,000 shares of common stock; and (b) 10,000,000 shares of preferred stock, of which none are issued and
outstanding.

 

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3.3.2.          Immediately prior to the Initial Closing and any Subsequent Closing, if and as applicable, the authorized, issued and outstanding
capital stock of the Company is, as set forth on Schedule 3.3.2 and all issued and outstanding shares of capital stock of
the Company (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were, in all material
respects, issued in compliance with all applicable state and federal laws concerning the issuance of securities. Except as set
forth on Schedule 3.3.2, (i) there are no outstanding securities of the Company which contain any preemptive, redemption
or similar provisions, nor is any holder of securities of the Company entitled to preemptive or similar rights arising out of any
agreement or understanding with the Company by virtue of any of the Transaction Documents, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to redeem a Securities of the Company (ii) the Company
does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement;
and (iii) except as set forth on Schedule 3.3.2, there are no outstanding options, warrants, agreements, convertible securities,
preemptive rights or other rights to subscribe for or to purchase or acquire, any shares of capital stock of the Company or contracts,
commitments, understandings, or arrangements by which the Company is or may become bound to issue any shares of capital stock of
the Company, or securities or rights convertible or exchangeable into shares of capital stock of the Company. Except as required
by law, including any federal securities rules and regulations, there are no restrictions upon the voting or transfer of any of
the shares of capital stock of the Company pursuant to its Organizational Documents or other governing documents or any agreement
or other instruments to which the Company is a party or by which it is bound. The issuance and sale of the Securities as contemplated
hereby will not obligate the Company to issue shares of common stock or other securities to any other person (other than the Purchaser)
and will not result in the adjustment of the exercise, conversion, exchange or reset price of any outstanding Securities. There
are no proxies, stockholder agreements, or any other agreements between the Company and any securityholder of the Company or, to
the knowledge of the Company, among any securityholders of the Company, including agreements relating to the voting, transfer,
redemption or repurchase of any securities of the Company. The Company does not have any outstanding shareholder purchase rights
or “poison pill” or any similar arrangement in effect giving any person the right to purchase any equity interest in
the Company upon the occurrence of certain events.

 

3.3.3.          The
Shares and Warrants are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of all Encumbrances other than restrictions on transfer
provided for in the Transaction Documents. The Warrant Shares, when issued and paid for in accordance with the terms of the Warrants,
will be validly issued, fully paid and nonassessable, free and clear of all Encumbrances imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents. The Company has reserved a sufficient number of shares for issuance of
the Shares and Warrant Shares, free and clear of all Encumbrances, except for restrictions on transfer set forth in the Transaction
Documents or imposed by applicable securities laws.

3.4          Authorization; Binding Obligations. All actions by or on behalf of the Company necessary for the authorization of
this Agreement and the other Transaction Documents, the performance of all obligations of the Company hereunder and thereunder
at each Closing and the authorization, sale, issuance and delivery of the Securities pursuant hereto have been taken. This Agreement
(assuming due execution and delivery by the Purchasers) and the other Transaction Documents (assuming due execution and delivery
by all other parties thereto), when executed and delivered, will be valid and binding obligations of the Company and enforceable
against it in each case in accordance with its respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of creditors’ rights, (b) general principles of equity
that restrict the availability of equitable remedies, and (c) to the extent that the enforceability of the indemnification provisions
of Section 6.16 may be limited by applicable law. Except as set forth on Schedule 3.4,
the execution, delivery and performance of, and the consummation of the transactions contemplated by, this Agreement and the other
Transaction Documents, including without limitation the sale, issuance and delivery of the Securities, have not resulted and will
not result in (x) any violation of, or default under, or conflict with, or constitute, with or without the passage of time or the
giving of notice or both, any violation of, or default under, or give rise to any right of termination, cancellation or acceleration
under (i) any term or provision of (A) the Organizational Documents of the Company, (B) any Contract, agreement, instrument,
arrangement or understanding of the Company, or (C) any Order to which the Company is a party or by which any of them or any of
their respective properties or assets are bound or (ii) any Requirement of Law applicable to the Company or any of their respective
properties or assets or (y) the creation of any Encumbrance upon any of the properties or assets of the Company.

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3.5          Early Stage Company Status; SEC Reports; Financial Statements. The Company was incorporated on February 8, 2012.
The Company has filed all reports required to be filed by it under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), in accordance with Section 13 thereof, since it became a publicly reporting company (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein being collectively referred to herein as the “SEC
Reports”) on a timely basis or has timely filed a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any such extension.
As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and
the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements
of the Company included in the SEC Reports (the “Financial Statements”) comply in all material
respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles (“GAAP”) applied on a consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the footnotes thereto, and fairly present in all material respects the financial position
of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject,
in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. There is no transaction, arrangement, or
other relationship between the Company and an unconsolidated or other off balance sheet entity that is not disclosed in its financial
statements that should be disclosed in accordance with GAAP and that would be reasonably likely to have a Material Adverse Effect.

3.6          Absence of Liabilities. Except as set forth on Schedule 3.6, the Company does not have any Liabilities that
are not reflected or disclosed in the audited financial statements of the Company for the year ended December 31, 2012 or the unaudited
financial statements of the Company for the quarter ended September 30, 2013. The Company is not a guarantor or indemnitor of any
Liability of any other Person. Except for operating leases for personal or real property entered into in the ordinary course of
business which do not require payments of more than $50,000 in the aggregate during any fiscal year, the Company has not issued
any instruments, entered into any agreements, commitments or arrangements or incurred any obligations that would have, or would
reasonably be expected to have, the effect of providing the Company with “off balance sheet” financing.

3.7          Compliance with Laws. The Company is not in violation of, or in default under, any Requirement of Law applicable
to the Company, or any Order issued or pending against the Company or by which the Company or any of the Company’s 
 properties are bound, except for such violations or defaults that have not had, and could not reasonably be expected
to have, a Material Adverse Effect.

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3.8          Changes. Except as set forth on Schedule 3.8, since September 30, 2013 there has not been:

3.8.1.          any effect, event, condition or circumstance (including, without limitation, the initiation of any litigation or other legal,
regulatory or investigative proceeding) against the Company that individually or in the aggregate, with or without the passage
of time, the giving of notice, or both, has had or could reasonably be expected to have a Material Adverse Effect;

3.8.2.          any resignation or termination of any director, officer or key employee of the Company, and the Company has not received
notification of any impending resignation from any such Person;

3.8.3.          any material change in the contingent obligations of the Company by way of guaranty, endorsement, indemnity, warranty or
otherwise;

3.8.4.          any material damage, destruction or loss adversely affecting the assets, properties, business, financial condition or prospects
of the Company, whether or not covered by insurance;

3.8.5.          any development, event, change, condition or circumstance that constitutes, whether with or without the passage o time or
the giving of notice or both, a default under the Company’s outstanding debt obligation; or

3.8.6.          any change in any compensation arrangement or agreement with any employee, consultant, officer, director or stockholder
of the Company that would increase the cost of any such agreement or arrangement to the Company by more than $10,000 in each instance;

3.8.7.          any labor organization activity of the employees of the Company;

3.8.8.          any declaration or payment of any dividend or other distribution of the assets of the Company;

3.8.9.          any change in the accounting methods or practices followed by the Company; or

3.8.10.        any
Contract or commitment made by the Company to do any of the foregoing.

3.9          Title to Properties and Assets; Liens, etc. Except as set forth on Schedule 3.9, the Company has good and
marketable title to the properties and assets it owns, and the Company has a valid license in all properties and assets licensed
by it, including the properties and assets reflected as owned in the most recent balance sheet included in the Financial Statements,
and has a valid leasehold interest in its leasehold estates. All facilities, machinery, equipment, fixtures, vehicles and other
properties owned, leased or used by the Company are in good operating condition and repair, ordinary wear and tear excepted and
are fit and usable for the purposes for which they are being used. Except as set forth on Schedule 3.9, the Company is in
compliance with all terms of each lease to which it is a party or is otherwise bound.

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3.10         Intellectual Property.

3.10.1.          All
registrations and applications for registration of all Owned Intellectual Property and all Licensed
Intellectual Property (collectively, the “Company Intellectual Property ”) and applications in process
for the Owned Intellectual Property and the Licensed Intellectual Property are licensed any Intellectual Property to or from any
Person. All of the registrations and applications for registration of the Company Intellectual Property are valid, subsisting
and in full force and effect, and all actions and payments necessary for the maintenance and continuation of such Company Intellectual
Property have been taken or paid. The Company owns or possesses sufficient legal rights to use all of the Company Intellectual
Property

3.10.2.          To
the knowledge of the Company, the business as currently conducted and as proposed to be conducted by the Company has not and will
not constitute any infringement of the Intellectual Property rights of any other Person. To the knowledge of the Company, the
development of Product candidates and the use, manufacture or sale of the Company’s Products based on the Company Intellectual
Property does not, and will not, infringe the Intellectual Property rights of any third Person. To the knowledge of the Company,
no employee or agents of the Company has misappropriated the Intellectual Property rights of any Person.

3.10.3.          There are no outstanding options or other rights to acquire any Company Intellectual Property. To the knowledge of the Company,
each licensor of the Licensed Intellectual Property is the sole and exclusive owner of such Licensed Intellectual Property and
has the sole and exclusive right and authority to grant licenses to such Licensed Intellectual Property.

3.10.4.          The
Company has not received any communications alleging or suggesting that it has violated or, by conducting its business as currently
conducted or proposed to be conducted, would infringe or misappropriate any of the Intellectual Property rights of any other Person.

3.10.5.          It
is not necessary to the business of the Company, as currently conducted or as proposed to be conducted, to utilize any inventions,
trade secrets or proprietary information of any of its employees, agents, developers, consultants or contractors made prior to
their employment by or service to the Company, except for inventions, trade secrets or proprietary information that have been
assigned or licensed to the Company.

 

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3.10.6.          Since
the date of the Company’s incorporation, there has not been any sale, assignment or transfer of any Company Intellectual
Property or other intangible assets of the Company.

3.10.7.          No
Company Intellectual Property is subject to any interference, reissue, reexamination, opposition or cancellation proceeding or
any other Legal Proceeding or subject to or otherwise bound by any outstanding Order or Contract (other than in the case of any
Licensed Intellectual Property, the Contract pursuant to which the Company licenses the rights to such Licensed Intellectual Property)
that restricts in any manner the use, transfer or licensing thereof by the Company or may affect the validity, use or enforceability
of such Company Intellectual Property . The Company does not have any knowledge of any fact or circumstance that would render
any portion of the Company Intellectual Property invalid or unenforceable.

 

3.10.8.          The Company has the right to: (a) bring actions for past, present and future infringement, dilution, misappropriation or
unauthorized use of the Company Intellectual Property owned or licensed by the Company, injury to goodwill associated with the
use of the Company Intellectual Property, unfair competition or trade practices violations of and other violation of the Company
Intellectual Property; and (b) with respect to the Company Intellectual Property owned exclusively by the Company, receive all
proceeds from the foregoing set forth in subsection (a) hereof, including, without limitation, licenses, royalties income, payments,
claims, damages and proceeds of suit.

 

3.10.9.          The execution and delivery of this Agreement and the other Transaction Documents and consummation of the transactions contemplated
hereby and thereby will not result in the breach of, or create on behalf of any third party the right to terminate or modify, any
license, sublicense, agreement or permission: (a) relating to or affecting any Company Intellectual Property; or (b) pursuant to
which the Company is granted a license or otherwise authorized to use any third party Intellectual Property.

 

3.10.10.         To
the knowledge of the Company, no Person is infringing, violating, misappropriating or making unauthorized use of any of the Company
Intellectual Property. 

3.11          Compliance with Other Instruments. Except as set forth on Schedule 3.11, the Company is not in violation or
default of any term of its Organizational Documents or its Bylaws, respectively (in each case, as amended to date), or of any provision
of any Contract to which it is party or by which it is bound or of any Order applicable to the Company, except for violations or
defaults of any Contract, which individually or in the aggregate has not had, or would not reasonably be expected to have, a Material
Adverse Effect.

3.12          Litigation. There is no Legal Proceeding pending or, to the knowledge of the Company, threatened against the Company
or any investigation of the Company, nor is the Company aware of any fact that would make any of the foregoing reasonably likely
to arise. The Company is not a party or subject to the provisions of any Order. There is no Legal Proceeding by the Company currently
pending or that the Company intends to initiate.

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3.13          Tax Returns
and Payments.

3.13.1.          Except as set forth on Schedule 3.13.1, the Company has filed all Tax Returns required to be filed by it, and the
Company has timely paid all Taxes owed (whether or not shown on any Tax Return). All such Tax Returns were complete and correct,
and such Tax Returns correctly reflected the facts regarding the income, business, assets, operations, activities, status and other
matters of the Company and any other information required to be shown thereon. The Company has withheld and paid all Taxes required
to have been withheld and paid in connection with amounts paid or owing to any Employee, creditor, independent contractor, shareholder,
member or other third party. The Company has established adequate reserves for all Taxes accrued but not yet payable. The Company
has not been audited by nor have issues been raised or adjustments made or proposed by any tax authority in connection with any
such Taxes or Tax Returns. No deficiency assessment with respect to or proposed adjustment of the Company’s Taxes is pending
or, to the knowledge of the Company, threatened. There is no tax lien (other than for current Taxes not yet due and payable), imposed
by any taxing authority, outstanding against the assets, properties or the business of the Company.

3.13.2.          The
Company has not agreed to make any adjustment under Section 481(a) of the Internal Revenue Code of 1986, as amended (the “Code”)
(or any corresponding provision of state, local or foreign tax law) by reason of a change in accounting method or otherwise, and
the Company will not be required to make any such adjustment as a result of the transactions contemplated by this Agreement. The
Company has not been nor is a party to any tax sharing or similar agreement. The Company is not nor has ever been a party to any
joint venture, partnership, limited liability company, or other arrangement or Contract which could be treated as a partnership
for federal income tax purposes. The Company is not nor has ever been a “United States real property holding corporation”
as that term is defined in Section 897 of the Code.

3.14          Employees.

3.14.1.          All
of the employees of the Company (the “Employees”) are identified, by the Company, on Schedule 3.14.1.
Except as set forth on Schedule 3.14.1, (a) The Company has not, nor has ever had any, collective bargaining agreements
with any of its employees; (b) there is no labor union organizing activity pending or, to the knowledge of the Company, threatened
with respect to the Company; (c) no employee has or is subject to any agreement or Contract to which the Company is a party (including,
without limitation, licenses, covenants or commitments of any nature) regarding his or her employment or engagement; (d) to the
best of the Company’s knowledge, no employee is subject to any Order that would interfere with his or her duties to the
Company or that would conflict with the Company’s businesses as currently conducted and as proposed to be conducted; (e)
no employee is in violation of any term of any employment contract, proprietary information agreement or any other agreement relating
to the right of any such Person to be employed by, or to contract with, the Company; (f) to the best of the Company’s knowledge,
the continued employment by the Company of its present employees, and the performance of their respective duties to the Company,
will not result in any violation of any term of any employment contract, proprietary information agreement or any other agreement
relating to the right of any such individual to be employed by, or to contract with, the Company, and the Company has not received
any written notice alleging that such violation has occurred; (g) no Employee or consultant has been granted the right to continued
employment by or service to the Company or to any compensation following termination of employment with or service to the Company;
and (h) the Company does not have any present intention to terminate the employment or engagement or service of any officer or
any significant employee or consultant.

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3.14.2.          There
are no outstanding or, to the knowledge of the Company, threatened claims against the Company or any Affiliate (whether under
federal or state law, under any employment agreement, or otherwise) asserted by any present or former employee or consultant of
the Company. The Company is not in violation of any law or Requirement of Law concerning immigration or the employment of persons
other than U.S. citizens.

3.15          Pension and Other Employee Benefit Plans.

3.15.1.          Schedule 3.15.1 sets forth all of the plans, funds, policies, programs and arrangements sponsored or maintained by
the Company on behalf of any employee or former employee of the Company (or any dependent or beneficiary of any such Employee or
former employee) with respect to (a) deferred compensation or retirement benefits; (b) severance or separation from service benefits
(other than those required by law); (c) incentive, performance, stock, share appreciation or bonus awards; (d) health care benefits;
(e) disability income or wage continuation benefits; (f) supplemental unemployment benefits; (g) life insurance, death or survivor’s
benefits; (h) accrued sick pay or vacation pay; or (i) any other material benefit offered under any arrangement constituting an
“employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Securities Act of 1974,
as amended (“ERISA”) and not excepted by Section 4 of ERISA (the foregoing being collectively called
“Employee Benefit Plans”). Schedule 3.15.1 sets forth all such Employee Benefit Plans subject
to the provisions of Section 412 of the Code as well as any “multi-employer plans” within the meaning of Section 3(37)
of ERISA or Section 4001(a)(3) of ERISA. The transactions contemplated by this Agreement will not result in any payment or series
of payments by the Purchasers or the Company of an “excess parachute payment” within the meaning of Section 280G of
the Code or any other severance, bonus or other payment on account of such transactions. None of the Employee Benefit Plans is
under investigation or audit by the United States Department of Labor, the Internal Revenue Service or any other Governmental or
Regulatory Authority.

3.15.2.          The
Company has complied with its obligations under all applicable Requirements of Law including, without limitation, of ERISA and
the Code with respect to such Employee Benefit Plans and all other arrangements that provide compensation or benefits to any Employee
and the terms thereof, whether or not such person is directly employed by the Company and there are no pending or, to the knowledge
of the Company, threatened actions or claims for benefits by any Employee, other than routine claims for benefits in the ordinary
course of business. No Employee Benefit Plan provides any benefits to any former employees.

3.15.3.          All
Employee Benefit Plans that are intended to meet the requirements of Section 401(a) of the Code have been determined by the Internal
Revenue Service to meet such requirements and have at all times operated in compliance with such requirements.

3.15.4.          All
employment Taxes, premiums for employee benefits provided through insurance, contributions to Employee Benefit Plans, and all
other compensation and benefits to which employees are entitled, have been timely paid or provided as applicable, and there is
no liability for any such payments, contributions or premiums.

 

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3.16          Real Property. The Company does not have any interest in any real estate, except that the Company leases the properties
described on Schedule 3.16 (the “Leased Real Property”). The Leased Real Property is adequate
for the operations of the Company’s businesses as currently conducted and as contemplated to be conducted. True and complete
copies of the lease agreements (the “Real Property Leases”) pertaining to the Leased Real Property have
been delivered or made available to the Purchasers. The Company has paid all amounts due from it, and is not in default under any
of the Real Property Leases and there exists no condition or event, which, with the passage of time, giving of notice or both,
would reasonably be expected to give rise to a default under or breach of the Real Property Leases.

 

3.17         
Relationships with Collaborators and Suppliers.

3.17.1       Collaborators.
Set forth on Schedule 3.17.1 is a list, by the Company, of the material collaborators, research partners and other material
service providers of the Company. For the purposes of this Section “material collaborators” means scientific research
collaborators who work with the Company and whose work is expected to impact the development of the Company Intellectual Property
and/or the Products, and includes, without limitation, any Person to whom the Company has licensed any of the Company Intellectual
Property (collectively, the “Collaborators”). To the best of the Company’s knowledge, the Company maintains
good working relationships with all of the Collaborators. The Company has delivered or made available to the Purchasers a list
of the Company’s Contracts with the Collaborators as set forth on Schedule 3.17.1. Except as set forth on Schedule
3.17.1, none of such Collaborators has terminated or indicated an intention or plan or, to the knowledge of the Company, threatened
to terminate its Contract with the Company, or to materially reduce the purchases of products or services from the Company historically
made by such Collaborator.

3.17.2       Suppliers.
Set forth on Schedule 3.17.2 is a list of the material suppliers of the Company. For the purposes of this Section, “material
suppliers” means suppliers who provide an essential and material element necessary for the research and development of the
Company Intellectual Property or required for the Products (collectively, the “Suppliers”). Except as set forth on
Schedule 3.17.2, none of such Suppliers has terminated or indicated an intention or plan or, to the knowledge of the Company,
threatened to terminate its Contract with the Company, or to materially reduce the supply of products or services to the Company
historically provided by such Supplier.

3.18          Budget.
The Company’s budget most recently delivered by the Company to the Purchasers (the “Budget”) was prepared in
good faith by the Company, and, based on the Company's experience and the assumptions used in preparing such Budget, constitutes
a reasonable estimate of the costs and expenses expected to be incurred by the Company during the time period covered thereby.
Nothing has come to the attention of the Company’s management that would cause such estimated expenses to no longer be reasonable
estimates. The assumptions used in the preparation of such estimated expenses were fair and reasonable when made and continue
to be fair and reasonable as of the date hereof.

3.19          Permits; Regulatory.

3.19.1       No
Regulatory Approval or Consent of, or any designation, declaration or filing with, any Governmental or Regulatory Authority or
any other Person is required in connection with the valid execution, delivery and performance of this Agreement and the other Transaction
Documents (including, without limitation, the issuance of the Securities), except such Regulatory Approvals, Consents, designations,
declarations or filings that have been duly and validly obtained or filed, or with respect to any filings that must be made after
the Initial Closing or the Subsequent Closing as will be filed in a timely manner. The Company has all franchises, Permits, licenses
and any similar authority necessary for the conduct of its business as now being conducted.

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3.19.2       There
are no feasibility, preclinical, clinical or other studies, tests or trials being conducted by or on behalf of or sponsored by
the Company or in which the Company or any of its Products is participating. The feasibility, preclinical, clinical and other
studies, tests and trials conducted by or on behalf of or sponsored by the Company or in which the Company or any of the Company’s
Products have participated were conducted in accordance with standard medical and scientific research procedures, the protocols
established and approved therefor and all applicable Requirements of Law. The Company has no knowledge of any other studies or
tests the results of which are inconsistent with or otherwise call into question the results of the above referenced studies and
tests.

3.20          Environmental and Safety Laws. The Company has not caused or allowed, or contracted with any party for, the generation,
use, transportation, treatment, storage or disposal of any Hazardous Substances in connection with the operation of its business
or otherwise, except in compliance with all applicable Environmental Laws. To the best of the Company’s knowledge, the Company
and the operation of its business are in compliance with all applicable Environmental Laws. To the best of the Company’s
knowledge, all of the Leased Real Property and all other real property which the Company occupies (the “Premises”)
is in compliance with all applicable Environmental Laws and Orders or directives of any Governmental or Regulatory Authority having
jurisdiction under such Environmental Laws, including, without limitation, any Environmental Laws or Orders or directives with
respect to any cleanup or remediation of any release or threat of release of Hazardous Substances. The Company and the operation
of its business is and has been in compliance with all applicable Environmental Laws. To the knowledge of the Company, there have
occurred no and there are no events, conditions, circumstances, activities, practices, incidents, or actions that may give rise
to any common law or statutory liability, or otherwise form the basis of any Legal Proceeding, any Order, any remedial or responsive
action, or any investigation or study involving or relating to the Company, based upon or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling, or the emission, discharge, release or threatened release
into the environment, of any pollutants, contaminants, chemicals, or industrial, toxic or Hazardous Substance. To the knowledge
of the Company, (a) there is no asbestos contained in or forming a part of any building, structure or improvement comprising a
part of any of the Leased Real Property, (b) there are no polychlorinated byphenyls (PCBs) present, in use or stored on any of
the Leased Real Property, and (c) no radon gas or the presence of radioactive decay products of radon are present on, or underground
at any of the Leased Real Property at levels beyond the minimum safe levels for such gas or products prescribed by applicable Environmental
Laws. The Company has obtained and is maintaining in full force and effect all necessary Permits, licenses and approvals required
by all Environmental Laws applicable to the Premises and the business operations conducted thereon, and is in compliance with all
such Permits, licenses and approvals. The Company has not caused or allowed a release, or a threat of release, of any Hazardous
Substance onto, at or near the Premises, and, to the knowledge of the Company, neither the Premises nor any property at or near
the Premises has ever been subject to a release, or a threat of release, of any Hazardous Substance.

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3.21          Offering Valid. Assuming the accuracy of the representations and warranties of the Purchasers contained in the subscription
agreements entered into by each Purchaser in connection with this Agreement, the offer, sale and issuance of the Securities will
be exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”),
and will be exempt from registration and qualification under applicable state securities laws.

3.22          Full Disclosure.
All information furnished, to be furnished or caused to be furnished to the Purchasers with respect to the Company, any of the
Company’s businesses, assets, properties, financial position and performance and Liabilities applicable for the purposes
of or in connection with this Agreement or any of the other Transaction Documents or any of the transactions contemplated hereby
or thereby is or, if furnished after the date of this Agreement and before the applicable Closing Date, shall be true and complete
in all material respects and, does not, and if furnished after the date of this Agreement and before such applicable Closing Date,
shall not, contain any untrue statement of material fact or fail to state any material fact necessary to make such statement not
misleading.

3.23          Minutes. A copy of all minutes of all meetings of directors and stockholders and all actions by written consent without
a meeting by the directors and stockholders since February 2012, has been made available to the Purchasers in a virtual data room
and accurately reflect all actions taken by the directors (and any committee of the directors) and stockholders with respect to
all transactions referred to in such minutes.

3.24          Insurance.
Schedule 3.24 sets forth a list of all policies or binders of fire, casualty, liability, product liability, worker’s
compensation, vehicular or other insurance held by the Company concerning its assets and/or its businesses (specifying for each
such insurance policy the insurer, the policy number or covering note number with respect to binders, and each pending claim thereunder
of more than $5,000) have been made available to the Purchasers in a virtual data room. Such policies and binders are valid and
in full force and effect. The Company is not in default with respect to any provision contained in any such policy or binder or
has failed to give any notice or present any claim of which it has notice under any such policy or binder in a timely fashion.
The Company has not received or given a notice of cancellation or non-renewal with respect to any such policy or binder. None
of the applications for such policies or binders contain any material inaccuracy, and all premiums for such policies and binders
have been paid when due. The Company does not have knowledge of any state of facts or the occurrence of any event that could reasonably
be expected to form the basis for any claim against it not fully covered by the policies referred to on Schedule 3.24.
The Company has not received written notice from any of their respective insurance carriers that any insurance premiums will be
materially increased after the applicable Closing Date or that any insurance coverage listed on Schedule 3.24 will not
be available after such Closing Date on substantially the same terms as now in effect.

3.25          Investment Company Act. The Company is not an “investment company”, or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

3.26          Foreign Payments; Undisclosed Contract Terms.

3.26.1.       To the knowledge of the Company, the Company has not made any offer, payment, promise to pay or authorization for the payment
of money or an offer, gift, promise to give, or authorization for the giving of anything of value to any Person in violation of
the Foreign Corrupt Practices Act of 1977, as amended and the rules and regulations promulgated thereunder.

 

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3.26.2.       To
the knowledge of the Company, there are no understandings, arrangements, agreements, provisions, conditions or terms relating
to, and there have been no payments made to any Person in connection with any agreement, Contract, commitment, lease or other
contractual undertaking of the Company which are not expressly set forth in such contractual undertaking.

 

3.27          No Broker. Other than as disclosed on Schedule 3.27, the Company has not employed any broker or finder, or
incurred any liability for any brokerage or finder’s fees in connection with the sale of the Securities, or the Shares and
Warrants underlying the Securities pursuant to this Agreement or the other Transaction Documents.

3.28          No General Solicitation. Neither the Company nor any of its Affiliates, nor any person acting on their behalf, has
engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities
Act) in connection with the offer or sale of the Securities or in any other offering of the Company within the last three years.

3.29          No Integrated Offering. Neither the Company nor any of its affiliates, nor any person acting on their behalf has,
directly or indirectly, made any offers or sales of any Securities or solicited any offers to buy any Securities, under circumstances
that would require registration of any of the Securities under the Securities Act or that
is likely to cause this offering of the Securities to be integrated with prior or contemporaneous offerings by the Company for
purposes of the Securities Act or any applicable shareholder approval provisions. Neither the Company nor any of its affiliates,
nor any person acting on their behalf has taken any action or steps referred to in the preceding sentence that would require registration
of any of the Securities under the Securities Act or cause the offering of the Securities to be integrated with other offerings.
Neither the Company nor any of its affiliates, nor any person acting on their behalf has taken any action or steps referred to
in the preceding sentence that would require registration of any of the Securities under the Securities Act.

3.30          Dilution. Except for the anti-dilution rights described on Schedule 3.30, no holder of any common stock or
Common Stock Equivalents of the Company has any anti-dilution rights. The Company’s executive officers and directors understand
the nature of the Securities being sold hereby and recognize that the issuance of the Securities will have a potential dilutive
effect on the equity holdings of other holders of the Company’s equity or rights to receive equity of the Company. The Company’s
Board of Directors has concluded, in its good faith business judgment that the issuance of the Securities is in the best interests
of the Company. The Company specifically acknowledges that its obligation to issue Warrant Shares is binding upon the Company and
enforceable regardless of the dilution such issuance may have on the ownership interests of other stockholders of the Company or
parties entitled to receive equity of the Company.

 

3.31          Maintenance Requirements. The common stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act,
and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the common stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating
such registration.

3.32          OFAC. The Company, to the Company’s knowledge, any director, officer, agent, employee, Affiliate or person
acting on behalf of the Company, is not currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds
of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any joint venture partner or other
person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC
or for the purpose of financing the activities of any person currently subject to any U.S. sanctions.

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3.33          Registration Rights. Except as required pursuant to the Registration Rights Agreement, the Company is not under any
obligation, nor has granted any rights that have not been terminated, to register any of the Company’s currently outstanding
securities or any of its securities that may hereafter be issued.

3.34          Material Non-Public
Information. Except with respect to the transactions contemplated hereby that will be publicly disclosed, the Company has
not provided any Purchaser with any information that the Company believes constitutes material non-public information.

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

3.36          Listing and Maintenance Requirements. The Common Stock is quoted on the OTCQB under the symbol NXTD. The Company
has not, in the twenty-four (24) months preceding the date hereof, received notice from any Trading Market on which the Common
Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements
of such Trading Market.

3.37          Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or might constitute material, non-public information. 
 The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions
in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding
the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Schedules
to this Agreement, taken as a whole is true and correct and does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they
were made, not misleading. For the avoidance of doubt, information disclosed in one section of the Schedule shall not be deemed
disclosed in any other section of the Schedule unless there is an explicit cross reference to such other section. The Company acknowledges
and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3 hereof.

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

3.39          Accountants. The Company’s accounting firm is set forth on Schedule 3.39 of the Disclosure Schedules.
To the knowledge and belief of the Company, such accounting firm is registered with the Public Company Accounting Oversight Board,
and shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2013.

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3.40          No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect
the Company’s ability to perform any of its obligations under any of the Transaction Documents.

3.41          Acknowledgement Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the
contrary notwithstanding (except for Sections 3.34 and 4.21 hereof), it is understood and acknowledged by the Company that: (i)
none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling,
long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company
or to hold the Securities for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically
including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future
private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii)
any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or
indirectly, may presently have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed to
have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. 
The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities in accordance
with all applicable laws at various times during the period that the Securities are outstanding, including, without limitation,
during the periods that the value of the Warrant Shares deliverable with respect to Securities are being determined, and (z) such
hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the
time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities
do not constitute a breach of any of the Transaction Documents.

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

3.43          Stock Option Plans. Except as set forth on Schedule 3.43, as of the date hereof, no stock options have been
granted, nor any commitments made to grant stock options, under the Stock Option Plan, and neither the Company nor any Subsidiary
has ever had an option plan. The Company has not knowingly granted, and there is no and has been no Company policy or practice
to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other
public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

3.44          Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any
and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable
rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.
The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company
and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such
date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is
reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

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3.45          Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, and the Company’s
good faith estimate of the fair market value of its assets, after giving effect to the receipt by the Company of the proceeds from
the sale of the Securities hereunder: (i) the fair saleable value of the Company’s assets exceeds the amount that will be
required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities)
as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted
and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business
conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current
cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking
into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when
such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of
any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.45 sets forth as of the date hereof
all outstanding liens secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary
has commitments which has not been disclosed in the Reports. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 other than debt financing from a licensed United
States bank regularly engaged in such lending activity, and (y) all guaranties, endorsements and other contingent obligations in
respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business, but in all cases excluding trade accounts payable incurred by the Company and its Subsidiaries
in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required
to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

4.          REPRESENTATIONS
AND WARRANTIES OF THE PURCHASERS.

Each of the Purchasers
hereby severally, and not jointly, represents and warrants to the Company that each such Purchaser’s representations and
warranties in the subscription agreement entered into in connection with this Agreement are true and correct as of their respective
Closing, and such representations and warranties are deemed repeated as if contained herein.

5.          CONDITIONS TO THE CLOSING.

5.1          Conditions to Purchasers’ Obligations at the Closings. The obligations of the Purchasers to consummate the
transactions contemplated herein to be consummated at the Initial Closing and of each Subsequent Closing, as the case may be, are
subject to the satisfaction, on or prior to the date of such Closing, of the conditions set forth below and applicable thereto,
which satisfaction shall be determined, or may be waived in writing, by either the Placement Agent or the Purchasers or Subsequent
Closing Purchasers, as the case may be, who have subscribed for at least a majority of the Securities to be purchased at such Closing
and which majority must include Alpha Capital Anstalt for so long as Alpha Capital Anstalt holds $100,000 of Shares purchased in
the Offering, and which subscriptions are intended to be accepted by the Company:

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5.1.1.          Representations and Warranties; Performance of Obligations. Each of the representations and warranties of the Company
contained herein shall be true and correct on and as of the Initial Closing Date. As of the Initial Closing, the Company shall
have performed and complied with the covenants and provisions of this Agreement required to be performed or complied with by it
at or prior to the Initial Closing Date. As to the Subsequent Closings, each of the representations and warranties of the Company
contained herein shall be true and correct on and as of the Subsequent Closing Date, as qualified by any updated Schedules delivered
at least five (5) days in advance of the Subsequent Closing to the Subsequent Closing Purchasers participating in the Subsequent
Closing. As to the Subsequent Closings, the Company shall have performed and complied with the covenants and provisions of this
Agreement and the other Transaction Documents required to be performed or complied with by it at or prior to the Subsequent Closing
Date. At each Closing, the Purchasers participating in such Closing shall have received certificates of the Company dated as of
the date of such Closing, signed by the president or chief executive officer of the Company, certifying as to the fulfillment of
the conditions set forth in this Section 5.1 and the truth and accuracy of the representations and warranties of the Company contained
herein (as qualified by the most recently delivered Schedules) as of the Initial Closing Date and, as to each Subsequent Closing,
the Subsequent Closing Date.

5.1.2.          Issuance in Compliance with Laws. The sale and issuance of the Securities shall be legally permitted by all laws
and regulations to which any of the Purchasers and the Company are subject.

5.1.3.          Filings, Consents, Permits, and Waivers. The Company and the Purchasers shall have made all filings and obtained
any and all Consents, Permits, waivers, and Regulatory Approvals necessary for consummation of the transactions contemplated by
the Agreement and the other Transaction Documents, including the waivers described on Schedule 5.1.3, except for such filings
as are not due to be made until after the applicable Closing.

5.1.4.          Reservation
of Warrant Shares. The Warrant Shares shall have been duly authorized and reserved for issuance by the Board of Directors.

5.1.5.          Registration Rights Agreement. Concurrently with the issuance of the Securities occurring at the Initial Closing
and at each Subsequent Closing, the Registration Rights Agreement, substantially in the form attached hereto as Exhibit E
(the “Registration Rights Agreement”), shall have been executed and delivered by the Company and each
Purchaser.

5.1.6.          Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at
the Closings and all documents and instruments incident to such transactions shall be reasonably satisfactory in substance and
form to the Purchaser and the Purchaser’s counsel, and the Purchaser and the Purchaser’s counsel shall have received
all such counterpart originals or certified or other copies of such documents as they may reasonably request.

5.1.7.          Proceedings
and Litigation. No action, suit or proceeding shall have been commenced by any Person against any party hereto seeking to
restrain or delay the purchase and sale of the Securities or the other transactions contemplated by this Agreement or any of the
other Transaction Documents.

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5.1.8.          No Material Adverse Effect. Since the date hereof, there shall not have occurred any effect, event, condition or
circumstance (including, without limitation, the initiation of any litigation or other legal, regulatory or investigative proceeding)
that individually or in the aggregate, with or without the passage of time, the giving of notice, or both, that has had, or could
reasonably be expected to have, a Material Adverse Effect or which could adversely affect the Company’s ability to perform
its respective obligations under this Agreement or any of the other Transaction Documents.

5.1.9.          Updated Disclosures. As to the Subsequent Closings, the Company must have delivered to the Purchasers an updated
set of schedules in accordance with Section 5.1.1 and such updated schedules do not reveal any information or the occurrence, since
the Initial Closing Date, of any effect, event, condition or circumstance, which individually, or in the aggregate, has had or
could reasonably be expected to have, a Material Adverse Effect and do not include any state of facts that occur as a result of
the breach by the Company of any of its obligations under this Agreement or any of the other Transaction Documents.

5.1.10.         Payment
of Purchase Price. As to each closing, each Purchaser shall have delivered to the Company the total purchase price to be paid
for such Purchaser’s Securities, in the amount set forth opposite such Purchaser’s name on Exhibit A.

5.1.11.         Delivery
of Documents at the Initial Closing. The Company shall have executed and delivered the following documents, on or prior to
the Initial Closing Date, and in the case of the Certificates, within five (5) business days thereafter:

(a)            
Certificates. Certificates representing the Shares to be purchased and sold on the
Initial Closing Date;

(b)           
Warrants: An executed Warrant, in substantially the form of Exhibit B, for the
Warrants to be issued on the Initial Closing Date; 

(c)            
Secretary’s Certificate. A certificate of the Secretary of the Company (i) attaching
and certifying as to the Company’s Certificate of Incorporation (the “Certificate”), (ii) attaching
and certifying as to the Bylaws of the Company in effect at the Initial Closing, (iii) attaching and certifying as to copies of
resolutions by the Board of Directors of the Company authorizing and approving this Agreement and the other Transaction Documents
and the transactions contemplated hereby and thereby including without limitation, the issuance and delivery of the Securities;
and (iv) certifying as to the incumbency of the officers of the Company executing this Agreement and the other Transaction Documents;

(d)           
A legal opinion of Company counsel, substantially in the form of Exhibit D attached
hereto; and

(e)            
Irrevocable Letter surrendering to Company’s treasury, a number of Shares equal to the
Purchase Price as of Closing including stock powers for such Surrendered Shares (“Surrendered Shares”)
together with an irrevocable transmittal letter to the transfer agent (“Irrevocable Letter”) for such
Surrendered Shares.

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5.1.12.          Delivery of Documents at the Subsequent Closing. The Company shall have executed and delivered the following documents,
on or prior to the Subsequent Closing, and in the case of the Certificates,
within a reasonable time thereafter:

(a)            
Certificates. Certificates representing the Shares to be purchased and sold on the
Subsequent Closing Date;

(b)           
Warrants: An executed Warrant, in substantially the form of Exhibit B, for the
Warrants to be issued on the Subsequent Closing Date; 

(c)            
Secretary’s Certificate. A Certificate of the Secretary of the Company (i) certifying
that the resolutions by the Board of Directors of the Company authorizing and approving this Agreement and the other Transaction
Documents delivered at the Initial Closing have not been modified in any way or rescinded and are otherwise in effect as of the
Subsequent Closing, (ii) certifying as to the incumbency of the officers of the Company executing any documents contemplated by
this Agreement to be executed and delivered by the Company at the Subsequent Closing, and (iii) attaching and certifying as to
(x) the Certificate as in effect at the Subsequent Closing, and (y) the Bylaws of the Company in effect at the Subsequent Closing;

(d)           
A legal opinion of Company counsel, substantially in the form of Exhibit D attached
hereto; and

(e)            
Irrevocable Letter and Surrendered Shares.

5.2          Conditions to Obligations of the Company at the Closings. The obligation of the Company to consummate the transactions
contemplated herein to be consummated at the Initial Closing or the Subsequent Closing, as the case may be, is subject to the satisfaction,
on or prior to the date of such Closing of the conditions set forth below and applicable thereto, any of which may be waived in
writing by the Company:

5.2.1.          Representations
and Warranties; Performance of Obligations. Each of the representations and warranties of the Purchasers contained herein
shall be true and correct on and as of the Initial Closing Date. As of the Initial Closing Date, the Purchasers shall have performed
and complied with the covenants and provisions of this Agreement required to be performed or complied with by them at or prior
to the Initial Closing Date. As to the Subsequent Closing, each of the representations and warranties of the Purchaser(s) contained
herein shall be true and correct on and as of the Subsequent Closing Date. As to the Subsequent Closing, the Subsequent Closing
Purchaser(s) shall have performed and complied with the covenants and provisions of this Agreement required to be performed and
complied with by them at or prior to the Subsequent Closing Date.

5.2.2.          Proceedings and Litigation. No action, suit or proceeding shall have been commenced by any Governmental Authority
against any party hereto seeking to restrain or delay the purchase and sale of the Securities or the other transactions contemplated
by this Agreement.

5.2.3.          Qualifications. All Permits, if any, that are required in connection with the lawful issuance and sale of the Securities
pursuant to this Agreement shall be obtained and effective as of the Initial Closing or Subsequent Closing, as applicable.

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6.          COVENANTS OF THE PARTIES.

6.1          Transfer Restrictions. 

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

6.1.2.          The
Purchaser agrees to the imprinting, so long as is required by this Section 6.1, of a legend on any of the Securities, including
the Warrant Shares, substantially in the following form:

NEITHER THESE SECURITIES NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

6.1.3.          Certificates
evidencing the Shares and Warrant Shares shall be eligible for issuance without or for removal of the restrictive legend set forth
in Section 6.1.2 hereof, (a) following any sale of Shares or Warrant Shares pursuant to Rule 144, (b) if such Shares or Warrant
Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public
information required under Rule 144 as to such Shares and Warrant Shares and without volume or manner-of-sale restrictions, (c)
following any sale of such Shares or Warrant Shares, pursuant to the plan of distribution in an effective registration statement
(in compliance with any prospectus delivery requirements), or (d) if such legend is not required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) (the “Removal
Date”).  The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after
the Removal Date if required by the Transfer Agent to effect the issuance without or for removal of the legend hereunder as permitted
by applicable law then in effect. The Company agrees that following the Removal Date, it will, no later than five (5) trading
days following the request for issuance without a legend with respect to not yet issued Shares or Warrant Shares, or the delivery
by a Purchaser to the Company or the Transfer Agent of a certificate representing Shares or Warrant Shares with respect to already
issued Shares or Warrant Shares, as the case may be, issued with a restrictive legend, together with any reasonable certifications
requested by the Company, the Company’s counsel or the Transfer Agent (such fifth (5th) trading day, the “Legend
Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is
free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to the
Transfer Agent that enlarge the restrictions on transfer set forth in this Section 6. Certificates for Shares and Warrant Shares
subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the
Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser if the Transfer Agent is
then a participant in such system and the Company is eligible to use such system and as directed by such Purchaser if either (i)
there is an effective registration statement permitting the resale of such Shares or Warrant Shares by the Purchaser (and the
Purchaser provides the Company or the Company’s counsel with any requested certifications with respect to future sales of
such shares) or (ii) the shares are eligible for resale by the Purchaser under Rule 144, without the requirement for the Company
to be in compliance with the current public information required under Rule 144 as to such Shares and Warrant Shares and without
volume or manner-of-sale restrictions.

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6.1.4.          In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, for each $1,000 of Shares or Warrant Shares (based on the VWAP of the Common Stock on
the date such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section
6.1.3, $10 per Trading Day for each Trading Day after the Removal Date (increasing to $20 per Trading Day after the tenth Trading
Day) until such certificate is delivered without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual
damages for the Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents,
and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief.

6.1.5.          DWAC. In lieu of delivering physical certificates representing the unlegended shares, upon request of a Purchaser,
so long as the certificates therefor do not bear a legend and the Purchaser is not obligated to return such certificate for the
placement of a legend thereon, the Company shall cause its transfer agent to electronically transmit the unlegended shares by crediting
the account of Purchaser’s prime broker with the Depository Trust Company through its Deposit Withdrawal At Custodian system,
provided that the Company’s Common Stock is DTC eligible and the Company’s transfer agent participates in the Deposit
Withdrawal at Custodian system. Such delivery must be made on or before the Removal Date.

6.1.6.          In
the event a Purchaser shall request delivery of unlegended shares as described in this Section 6.1.6 and the Company is required
to deliver such unlegended shares, the Company may not refuse to deliver unlegended shares based on any claim that such Purchaser
or anyone associated or affiliated with such Purchaser has not complied with Purchaser’s obligations under the Transaction
Documents, or for any other reason, unless, an injunction or temporary restraining order from a court, on notice, restraining
and or enjoining delivery of such unlegended shares shall have been sought and obtained by the Company and the Company has posted
a surety bond for the benefit of such Purchaser in the amount of the greater of (i) 15% of the amount of the aggregate purchase
price of the Shares and Warrant Shares which is subject to the injunction or temporary restraining order, or (ii) the VWAP of
the Common Stock on the trading day before the issue date of the injunction multiplied by the number of unlegended shares to be
subject to the injunction, which bond shall remain in effect until the completion of arbitration/’litigation of the dispute
and the proceeds of which shall be payable to such Purchaser to the extent Purchaser obtains judgment in Purchaser’s favor.

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

6.1.8.          Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell
the Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold
in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from
certificates representing Securities as set forth in this Section 6.1.8 is predicated upon the Company’s reliance upon this
understanding.

6.2          Reservation of Shares. The Company shall at all times while the Warrants are outstanding maintain a reserve from
its duly authorized shares of common stock of a number of shares of common stock sufficient to allow for the issuance of Warrant
Shares (“Required Minimum”).

6.3          Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or
in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance
of such replacement securities. If a replacement certificate or instrument evidencing any securities is requested due to a mutilation
thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance
of a replacement.

6.4          Securities Laws; Publicity. The Company shall by 8:30 a.m. (New York City time) on the trading day immediately following
a Closing hereunder, or at the latest, prior to the second trading day immediately following a Closing hereunder, file a Current
Report on Form 8-K disclosing the material terms of the transactions contemplated hereby and including the Transaction Documents
as exhibits thereto to the extent required by law. The Company shall not publicly disclose the name of Purchaser, or include the
name of any Purchaser in any filing with the SEC or any regulatory agency or trading market, without the prior written consent
of Purchaser, except: (a) as required by federal securities law in connection with the filing of final Transaction Documents (including
signature pages thereto) with the SEC and (b) to the extent such disclosure is required by law, in which case the Company shall
provide the Purchaser with prior notice of such disclosure permitted under this clause (b).

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6.5             
Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under
Regulation D promulgated under the Securities Act and to provide a copy thereof, promptly upon request of the Purchaser. The Company
shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify
the Securities for, sale to the Purchaser at the Closing under applicable securities or “Blue Sky” laws of the states
of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.

6.6             
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be
offered or paid to any person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents
unless the same consideration is also offered to all of the parties to the Transaction Documents.

6.7             
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, the Company covenants and agrees that neither it, nor any other person acting on its behalf, will
provide Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information,
unless prior thereto Purchaser shall have executed a written agreement regarding the confidentiality and use of such information.
The Company understands and confirms that Purchaser shall be relying on the foregoing covenant in effecting transactions in securities
of the Company.

6.8             
Permitted Indebtedness. Until one year after the Effective Date, the Company will not incur any Indebtedness.

6.9             
Acknowledgment of Dilution. The Company and Purchasers acknowledges that the issuance of the Securities may result
in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company
further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue
the Shares and Warrant Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right
of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against
any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the
Company.

6.10         
Furnishing of Information; Public Information.

 

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

 

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(b)          At any time commencing on the Initial Closing Date and ending at such time that all of the
Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction
or limitation pursuant to Rule 144, if the Company shall fail for any reason to satisfy the current public information requirement
under Rule 144(c) (a “Public Information Failure”) then, in addition to such Purchaser’s other
available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason
of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate
Purchase Price held by such Purchaser on the day of a Public Information Failure and on every thirtieth (30th) day (pro-rated for
periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and
(b) such time that such public information is no longer required for the Purchasers to transfer the Shares and Warrant Shares pursuant
to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 6.10 are referred to herein as “Public
Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day
of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day
after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make
Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate
of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to
pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available
to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

6.11         
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities
in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated
with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require
shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing
of such subsequent transaction.

 

6.12         
Exercise Procedures. The form of Notice of Exercise included in the Warrants sets forth the totality of the procedures
required of the Purchasers in order to exercise the Warrants. No additional legal opinion, other information or instructions shall
be required of the Purchasers to exercise their Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant
Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

 

6.13         
Purchase Price Reset.

 

6.13.1          From
the date of this Agreement until the sooner of (i) the Purchaser and his permitted assigns no longer holds any Securities, and
(ii) two years after the Effective Date (the “Protection Period”), in the event that the Company issues
or sells any shares of Common Stock or any Common Stock Equivalent (calculated on an as converted, as exercised basis) pursuant
to which shares of Common Stock may be acquired at a price less than the Per Share Purchase Price (a “Share Dilutive
Issuance”) (adjusted as described in Section 7.26), then the Company shall promptly issue additional shares of Common
Stock to the Purchasers who held outstanding Shares on the date of such Share Dilutive Issuance, for no additional consideration,
in an amount sufficient that (a) the aggregate Purchase Price paid at the Initial Closing and the Subsequent Closing, if any, for
such outstanding Shares held by Purchasers on the date of such Share Dilutive Issuance (whether or not such Purchasers were the
Purchasers at the Initial Closing or the Subsequent Closing, if any), when divided by (x) the sum of (i) the total number of outstanding
Shares held by the Purchasers on the date of such Share Dilutive Issuance, (ii) any other shares of Common Stock then or theretofore
issued in respect of such outstanding Shares (by stock split, stock dividend or otherwise) that resulted in an adjustment to the
Per Share Purchase Price referred to above pursuant to Section 7.26, and (iii) all Additional Shares issued with respect to such
outstanding Shares held by the Purchasers on the date of such Share Dilutive Issuance that were issued as a result of Share Dilutive
Issuances that occurred prior to such Share Dilutive Issuance, will equal the price per share of Common Stock in such Share Dilutive
Issuance, (each such adjustment, a “Share Dilution Adjustment”, and such shares, the “Additional
Shares”). The Additional Shares to be issued in a Share Dilution Adjustment shall be issued by the Company to the
Purchasers who held outstanding Shares on the date of the applicable Share Dilutive Issuance (in proportion to the number of such
Shares held by such Purchasers on the date of such Share Dilutive Issuance). Such Share Dilution Adjustment shall be made successively
whenever such an issuance is made. Such Additional Shares must be delivered to the applicable Purchasers not later than the date
the Share Dilutive Issuance occurs.

 

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6.13.2          From
the date of this Agreement until the end of the Protection Period, in the event that the Company issues or sells any shares of
Common Stock or any Common Stock Equivalent (calculated on an as converted, as exercised basis) pursuant to which shares of Common
Stock may be acquired at a price less than the exercise price per share of Common Stock that was paid during the Protection Period
by a Purchaser upon exercise of a Warrant (a “Warrant Dilutive Issuance”) (adjusted as described in Section
7.26), then the Company shall promptly issue additional shares of Common Stock to the Purchasers who on the date of such Warrant
Dilutive Issuance held the issued Warrant Shares that were issued upon such exercise, for no additional consideration, in an amount
sufficient that (a) the aggregate exercise price paid for such issued Warrant Shares held by the Purchasers on the date of such
Warrant Dilutive Issuance (whether or not such Purchasers were the Purchasers who exercised such Warrant), when divided by (x)
the sum of (i) the total number of such issued Warrant Shares held by the Purchasers on the date of such Warrant Dilutive Issuance,
(ii) any other shares of Common Stock then or theretofore issued in respect of such issued Warrant Shares (by stock split, stock
dividend or otherwise) that resulted in an adjustment to the exercise price referred to above pursuant to Section 7.26, and (iii)
all Additional Warrant Shares issued with respect to such issued Warrant Shares held by the Purchasers on the date of such Warrant
Dilutive Issuance that were issued as a result of Warrant Dilutive Issuances that occurred prior to such Warrant Dilutive Issuance,
will equal the price per share of Common Stock in such Warrant Dilutive Issuance, (each such adjustment, a “Warrant
Dilution Adjustment”, and such shares, the “Additional Warrant Shares”). The Additional
Warrant Shares to be issued in a Warrant Dilution Adjustment shall be issued by the Company to the Purchasers who held the applicable
issued Warrant Shares on the date of the applicable Warrant Dilutive Issuance (in proportion to the number of such issued Warrant
Shares held by such Purchasers on the date of such Warrant Dilutive Issuance). Such Warrant Dilution Adjustment shall be made successively
whenever such an issuance is made. Such Additional Warrant Shares must be delivered to the applicable Purchasers not later than
the date the Warrant Dilutive Issuance occurs.

 

6.13.3          Notwithstanding
the foregoing, this Section 6.13 shall not apply in respect of an Exempt Issuance. No adjustment shall be made hereunder which
would require the Purchaser to surrender any shares to the Company. The holder of outstanding Additional Shares and Additional
Warrant Shares is granted the same rights and benefits as a holder of outstanding Shares pursuant to the Transaction Documents,
except the rights and benefits of this Section 6.13 and except that such rights and benefits shall not apply to a holder of outstanding
Additional Shares or Additional Warrant Shares after such outstanding Additional Share or Additional Warrant Share has been irrevocably
sold pursuant to an effective registration statement under the Securities Act or pursuant to Rule 144 without further restrictions
or conditions to transfer pursuant to Rule 144.

 

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6.14          Most Favored Nation Provision. From the date hereof until the earlier of (i) such time as no Purchaser holds any
outstanding Securities and (ii) the end of the Protective Period, in the event that the Company issues or sells any Common Stock
such that the provisions of Section 6.13 are triggered, if a Purchaser then holding outstanding Securities reasonably believes
that any of the terms and conditions appurtenant to such issuance or sale are more favorable to such investors than are the terms
and conditions granted to the Purchasers hereunder, then upon notice to the Company by such Purchaser within five Trading Days
after disclosure of such issuance or sale, the Company shall amend the terms of this transaction as to such Purchaser only so as
to give such Purchaser the benefit of such more favorable terms or conditions. This Section 6.14 shall not apply with respect to
an Exempt Issuance. The Company shall provide each Purchaser with notice of any such issuance or sale.

 

6.15          Use
of Proceeds.  The Company will use the net proceeds to the Company from the sale of the Shares and Warrants hereunder
as set forth on Schedule 6.15. The Company shall not use such proceeds: (a) for the satisfaction of any portion of
the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior
practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding
litigation, (d) in violation of the law, including FCPA or OFAC or (e) for the development of new products not substantially related
to the Company’s current products in production or development as of the date hereof.

 

6.16          Indemnification
of Purchasers. Subject to the provisions of this Section 6.16, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser’s Party’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations
by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross
negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser
Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will
not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that
a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of its representations, warranties or
covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder
or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance. The indemnification required by this Section 6.16 shall be made by
periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are
incurred however, each Purchaser Party who receives such interim payment agrees to reimburse the Company for any such payment
made by the Company to such Purchaser Party if it is finally determined in such action or proceeding that such Purchaser Party
is not entitled to indemnification pursuant to this Section 6.16. The indemnity agreements contained herein shall be in addition
to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may
be subject to pursuant to law.

 

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6.17          Reservation and Listing of Securities.

 

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

 

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

 

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

 

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6.18          Subsequent
Equity Sales. Without prior written approval from Holder, from the date hereof until such time as the Common Stock and Warrants
are no longer outstanding, the Company will not, without the consent of the Purchasers, enter into any Equity Line of Credit or
similar agreement, nor issue nor agree to issue any common stock, floating or Variable Priced Equity Linked Instruments nor any
of the foregoing or equity with price reset rights (subject to adjustment for stock splits, distributions, dividends, recapitalizations
and the like) (collectively, the “Variable Rate Transaction”).   For purposes hereof,
“Equity Line of Credit” shall include any transaction involving a written agreement between the Company
and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter
over an agreed period of time and at an agreed price or price formula, and “Variable Priced Equity Linked Instruments”
shall include: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right
to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt
or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date
at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s
Common Stock since date of initial issuance, and (B) any amortizing convertible security which amortizes prior to its maturity
date, where the Company is required or has the option to (or any investor in such transaction has the option to require the Company
to) make such amortization payments in shares of Common Stock which are valued at a price that is based upon and/or varies with
the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security (whether
or not such payments in stock are subject to certain equity conditions).  For purposes of determining the total consideration
for a convertible instrument (including a right to purchase equity of the Company) issued, subject to an original issue or similar
discount or which principal amount is directly or indirectly increased after issuance, the consideration will be deemed to be
the actual cash amount received by the Company in consideration of the original issuance of such convertible instrument. Until
twenty-four (24) months after the Effective Date, the Company will not issue any Common Stock or Common Stock Equivalents to those
individuals listed on Schedule 6.23  nor will the Company issue any replacement shares of Surrendered Shares except in
the amounts and on the terms set forth on Schedule 6.18.

 

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

 

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

 

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

 

6.22          Purchaser’s
Exercise Limitations. The Company shall not effect any exercise of the option granted to each Purchaser in Section 2.2 of
this Agreement, and a Purchaser shall not have the right to exercise any portion of such option, pursuant to Section 2.2 or otherwise,
to the extent that after giving effect to such issuance after exercise as set forth on the applicable Exercise Notice, the Purchaser
(together with the Purchaser’s Affiliates, and any other Persons acting as a group together with the Purchaser or any of
the Purchaser’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). 
For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Purchaser and its Affiliates
shall include the number of shares of Common Stock issuable upon exercise of the option with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining,
nonexercised portion of the option beneficially owned by the Purchaser or any of its Affiliates and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common
Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially
owned by the Purchaser or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section
6.22, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder, it being acknowledged by the Purchaser that the Company is not representing to the Purchaser that such
calculation is in compliance with Section 13(d) of the Exchange Act and the Purchaser is solely responsible for any schedules
required to be filed in accordance therewith. To the extent that the limitation contained in this Section 6.22 applies, the determination
of whether the option is exercisable (in relation to other securities owned by the Purchaser together with any Affiliates) and
of which portion of the option is exercisable shall be in the sole discretion of the Purchaser, and the submission of an Exercise
Notice shall be deemed to be the Purchaser’s determination of whether the option is exercisable (in relation to other securities
owned by the Purchaser together with any Affiliates) and of which portion of the option is exercisable, in each case subject to
the Beneficial Ownership Limitation. To ensure compliance with this restriction, a Purchaser will be deemed to represent to the
Company when it delivers an Exercise Notice that such Exercise Notice has not violated the restrictions set forth in this paragraph,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder. For purposes of this Section 6.22, in determining the number of outstanding shares
of Common Stock, a Purchaser may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s
most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by
the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common
Stock outstanding.  Upon the written or oral request of a Purchaser, the Company shall within two Trading Days confirm orally
and in writing to the Purchaser 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
the Warrants, by the Purchaser or its Affiliates since the date as of which such number of outstanding shares of Common Stock
was reported. The “Beneficial Ownership Limitation” shall be 4.99%, unless a Purchaser elects on its
signature page hereto a different amount for its own Beneficial Ownership Limitation (which shall also apply to and supercede
the corresponding Beneficial Ownership Limitation as same relates to the Warrants issued to such electing Purchaser) of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon
exercise of the option. The Purchaser, upon not less than 61 days’ prior notice to the Company, may increase or decrease
the Beneficial Ownership Limitation provisions of this Section 6.22, provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock upon exercise of the option held by the Purchaser and the provisions of this Section 6.22 shall continue to apply.
Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 6.22 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply to a successor holder of the option right.

 

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6.23          Surrendered
Shares. Management, as described on Schedule 6.23, has agreed to surrender at Closing an aggregate of ___________ Shares
of Common Stock (pro-rata to what each of Management owns) as further described on Schedule 6.23. Additionally, management
has agreed to deliver to Company counsel who will act as Escrow Agent pursuant to the terms of an Escrow Agreement in the form
annexed hereto as Exhibit F an aggregate of ____________ Shares and stock powers to be held in escrow until the expiration
of the Warrants, or sooner, if no Warrants are outstanding. On the fifth (5th) business day of each calendar year,
the Escrow Agent will determine the number of Warrants exercised during the prior calendar year and will surrender to the treasury
an equivalent amount of such management Shares with stock power (pro-rata to what each of management owns).

 

6.24          Attorneys’
Fees and Expenses.  At the Initial Closing, the Company has agreed to pay to Grushko & Mittman, P.C., a legal fee
of $15,000 (of which $5,000 has been paid). If any action at law or in equity (including arbitration) is necessary to enforce
or interpret the terms of this Agreement or any Transaction Document, the prevailing party shall be entitled to reasonable attorneys’
fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled as determined by such
court, equity or arbitration proceeding.

 

6.25          Participation in Future Financing.

 

(a)          For so long as
any of the Securities are outstanding, upon any proposed issuance by the Company or any of its Subsidiaries of indebtedness convertible
into Common Stock or preferred equity convertible into Common Stock, other than (i) a rights offering to all holders of Common
Stock (which may include extending such rights offering to holders of Common Stock) or (ii) an Exempt Issuance, (a “Subsequent
Financing”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal
to 100% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price
provided for in the Subsequent Financing, unless the Subsequent Financing is an underwritten public offering, in which case the
Company shall offer each Purchaser the right to participate in such public offering when it is lawful for the Company to do so,
but no Purchaser shall be entitled to purchase any particular amount of such public offering.

 

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

 

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

 

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

 

(e)          If by 5:30 p.m.
(New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice, the Company
receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation
Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation Maximum. 
“Pro Rata Portion” means the ratio of (x) the Subscription Amount of shares of Common Stock and Warrants
purchased hereunder by a Purchaser participating under this Section 6.25 and (y) the sum of the aggregate Subscription Amounts
of Securities purchased hereunder by all Purchasers participating under this Section 6.25.

 

(f)          The Company must
provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of participation
set forth above in this Section 6.25, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated
for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after the date of the
initial Subsequent Financing Notice.

 

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

 

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(h)          Notwithstanding
anything to the contrary in this Section 6.25 and unless otherwise agreed to by such Purchaser, the Company shall either confirm
in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser
will not be in possession of any material, non-public information, by the tenth (10th) Business Day following delivery of the Subsequent
Financing Notice. If by such tenth (10th) Business Day, no public disclosure regarding a transaction with respect to the Subsequent
Financing has been made, and no notice regarding the abandonment of such transaction has been received by such Purchaser, such
transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession of any material,
non-public information with respect to the Company or any of its Subsidiaries.

 

7.          MISCELLANEOUS.

7.1          Governing Law; Submission to Jurisdiction; Waiver of Trial by Jury. This Agreement shall be governed in all respects
by the laws of the State of New York without regard to the conflict of laws principles of the State of New York or any other
jurisdiction. No suit, action or proceeding with respect to this Agreement or any of the Transaction Documents may be brought in
any court or before any similar authority other than in a court of competent jurisdiction in the State of New York and the parties
hereby submit to the exclusive jurisdiction of such courts for the purpose of such suit, proceeding or judgment. Each of the parties
hereto hereby irrevocably waives any right which it may have had to bring such an action in any other court, domestic or foreign,
or before any similar domestic or foreign authority and agrees not to claim or plead the same. Each of the parties hereto hereby
irrevocably and unconditionally waives trial by jury in any legal action or proceeding in relation to this Agreement or any of
the Transaction Documents and for any counterclaim therein.

7.2          Survival of Representations and Warranties. The representations and warranties made by the Company and the Purchasers
herein at each Closing shall survive such Closing. All statements contained in any certificate or other instrument delivered by
or on behalf of any party to this Agreement, pursuant to or in connection with the transactions contemplated by this Agreement
or any of the other Transaction Documents shall be deemed to be representations and warranties made by such party as of the date
of such certificate or other instrument.

7.3          Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any
of its rights or obligations under this Agreement without the consent of each other party. Notwithstanding the foregoing (a) any
Purchaser may assign or transfer, in whole or, from time to time, in part, the right to purchase all or any portion of the Securities
to one or more of its Affiliates (subject to Affiliate qualification as an Accredited Investor) and (b) any Purchaser may assign
or transfer any of its rights or obligations under this Agreement, in whole or from time to time in part, to the Company or any
other Purchaser or any Affiliate of any other Purchaser. As a condition of any transfer pursuant to this Section 7.3, the transferee
must agree in writing for the benefit of all parties to this Agreement (which writing shall be in form and substance reasonably
acceptable to all parties to this Agreement) to be bound by the terms and conditions of this Agreement and all other Transaction
Documents with respect to any Shares being transferred hereunder.

7.4          Entire Agreement. This Agreement, the Exhibits and Schedules hereto, the other Transaction Documents and each of
the Exhibits delivered pursuant thereto constitute the full and entire understanding and agreement between the parties hereto with
regard to the subject matter hereof and thereof and no party hereto shall be liable or bound to any other party hereto in any manner
by any representations, warranties, covenants and agreements except as specifically set forth herein and therein.

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7.5          Severability. If any provision of the Agreement is held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

7.6          Amendment and Waiver. Any provision of this Agreement may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Company and the Purchasers (and, to the extent of any assignment under Section 7.3 hereof,
their respective permitted assigns and any permitted assigns thereof) holding a majority of the voting power of the then outstanding
Shares and Warrant Shares purchased under this Agreement held by such holders, with each outstanding Share having one vote and
each outstanding Warrant Share having one vote and which majority must include Alpha Capital Anstalt for so long as Alpha Capital
Anstalt holds $100,000 of Shares purchased in the Offering.

7.7          Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by another party under this Agreement, the other Transaction Documents, shall impair any such
right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of or in any similar breach, default or noncompliance thereafter occurring. Any waiver or approval of any kind or character
on any Purchaser’s part of any breach, default or noncompliance under this Agreement, the other Transaction Documents or
any waiver on such party’s part of any provisions or conditions of the Agreement, the other Transaction Documents, must be
in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement,
the other Transaction Documents, or otherwise afforded to any party, shall be cumulative and not alternative.

7.8          Notices. All notices, requests, demands and other communications given or made in accordance with the provisions
of this Agreement shall be addressed (i) if to a Purchaser, at such Purchaser’s address, fax number or email address, as
furnished to the Company on the signature page below or as otherwise furnished to the Company by the Purchaser in writing, or (ii)
if to the Company, to the attention of the President at such address, fax number or email address furnished to the Purchasers on
the signature page below or as otherwise furnished by the Company in writing, and shall be made or sent by a personal delivery
or overnight courier, by registered, certified or first class mail, postage prepaid, or by facsimile or electronic mail with confirmation
of receipt, and shall be deemed to be given on the date of delivery when made by personal delivery or overnight courier, 48 hours
after being deposited in the U.S. mail, or upon confirmation of receipt when sent by facsimile or electronic mail. Any party may,
by written notice to the other, alter its address, number or respondent, and such notice shall be considered to have been given
three (3) days after the overnight delivery, airmailing, faxing or sending via e-mail thereof.

7.9          Expenses. The Company shall pay all costs and expenses that it incurs with respect to the preparation, negotiation,
execution, delivery and performance of this Agreement, including, without limitation, any costs and expenses of its counsel. The
Company shall pay the reasonable fees and expenses of independent counsel for the Purchaser with respect to the negotiation and
execution of this Agreement and the other Transaction Documents in accordance with the terms of the Company’s agreement with
the Purchaser.

7.10         Titles and Subtitles. The titles of the sections and subsections of the Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.

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7.11         Counterparts; Execution by Facsimile Signature. This Agreement may be executed in any number of counterparts (including
execution by facsimile), each of which shall be an original, but all of which together shall constitute one instrument. This Agreement
may be executed by facsimile signature(s) which shall be binding on the party delivering same, to be followed by delivery of originally
executed signature pages.

7.12          Acknowledgment.
Any investigation or other examination that may have been made at any time by or on behalf of a party to whom representations
and warranties are made in this Agreement or in any other Transaction Documents shall not limit, diminish, supersede, act as a
waiver of, or in any other way affect the representations, warranties and indemnities contained in this Agreement and the other
Transaction Documents, and the respective parties may rely on the representations, warranties and indemnities made to them in
this Agreement and the other Transaction Documents irrespective of and notwithstanding any information obtained by them in the
course of any investigation, examination or otherwise, whether before or after any Closing.

7.13          Publicity. Except as otherwise required by law or applicable stock exchange rules, no announcement or other disclosure,
public or otherwise, concerning the transactions contemplated by this Agreement shall be made, either directly or indirectly, by
any party hereto which mentions another party (or parties) hereto without the prior written consent of such other party (or parties),
which consent shall not be unreasonably withheld, delayed or conditioned.

7.14          No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer on any person
other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or Liabilities under
or by reason of this Agreement.

7.15          Pronouns. All pronouns contained herein, and any variations thereof, shall be deemed to refer to the masculine, feminine
or neutral, singular or plural, as to the identity of the parties hereto may require.

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

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

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

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

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

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

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

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

    	36

    	 

    

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

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

7.26          Equitable Adjustment. Trading volume amounts, price/volume amounts and similar figures in the Transaction Documents
shall be equitably adjusted (but without duplication) to offset the effect of stock splits, similar events and as otherwise described
in this Agreement and Warrants.

8.          DEFINITIONS.

As used in this Agreement,
the following terms shall have the meanings herein specified:

8.1          “Affiliate”
shall mean, with respect to any Person specified: (i) any Person that directly or indirectly through one or more intermediaries
controls, is controlled by or under common control with the Person specified; (ii) any director, officer, or Subsidiary of the
Person specified; and (iii) the spouse, parents, children, siblings, mothers-in-law, fathers-in law, sons-in-law, daughters-in-law,
brothers-in-law, and sisters-in-law of the Person specified, whether arising by blood, marriage or adoption, and any Person who
resides in the specified Person’s home. For any director, officer, or Subsidiary of the Person specified. For purposes of
this definition and without limitation to the previous sentence, (x) “control” (including, with correlative meanings,
the terms “controlled by” and “under common control with”) of a Person means the power, direct or indirect,
to direct or cause the direction of management and policies of such Person, whether through ownership of voting securities, by
contract or otherwise, and (y) any Person beneficially owning, directly or indirectly, more than ten percent (10%) or more of
any class of voting securities or similar interests of another Person shall be deemed to be an Affiliate of that Person.

    	37

    	 

    

8.2          “Agreement” shall have the meaning set forth in the preamble to this Agreement.

 

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

8.4          “Budget” shall have the meaning set forth in Section 3.18.

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

8.6          “Certificate” shall have the meaning set forth in Section 5.1.11.

8.7          “Closing” shall mean the Initial Closing or the Subsequent Closing, as applicable.

8.8          “Closing Date” shall mean the Initial Closing Date or the Subsequent Closing Date, as applicable.

8.9          “Code” shall have the meaning set forth in Section 3.13.2.

8.10          “Collaborators”
shall have the meaning set forth in Section 3.17.1.

8.11         
“Company” shall have the meaning set forth in the preamble to this Agreement.

8.12         
“Commission” means the United States Securities and Exchange Commission.

8.13         
“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other
class of securities into which such securities may hereafter be reclassified or changed.

8.14         
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would
entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles
the holder thereof to receive, Common Stock.

8.15         
“Company Counsel” means, Robinson Brog Leinwand Greene Genovese & Gluck P.C., with offices
at 875 Third Avenue, 9th Floor, New York, New York 10022, Attn: David E. Danovitch, facsimile: (212) 956-2164.

8.16         
“Company Intellectual Property” shall mean shall mean all Copyrights, Patents, Trademarks, technology,
trade secrets, know-how, inventions, methods, techniques and other intellectual property

8.17         
“Consents” shall mean any consents, waivers, approvals, authorizations, or certifications from
any Person or under any Contract, Organizational Document or Requirement of Law, as applicable.

    	38

    	 

    

8.18         
“Contracts” shall mean any indentures, indebtedness, contracts, leases, agreements, instruments,
licenses, undertakings and other commitments, whether written or oral.

8.19         
“Copyrights” shall mean all copyrights, copyrightable works, mask works and databases, including,
without limitation, any computer software (object code and source code), Internet web-sites and the content thereof, and any other
works of authorship, whether statutory or common law, registered or unregistered, and registrations for and pending applications
to register the same including all reissues, extensions and renewals thereto, and all moral rights thereto under the laws of any
jurisdiction.

 

8.20         
“Effective Date” means the earliest of the date that (a) the Initial Registration Statement, as
defined in the Registration Rights Agreement, has been declared effective by the Commission, or (b) all of the Shares and Warrant
Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in
compliance with the current public information requirement under Rule 144 and without volume or manner-of-sale restrictions and
Company counsel has delivered to the Transfer Agent and such holders a standing written unqualified opinion that resales may then
be made by such holders of the Shares and Warrant Shares pursuant to such exemption which opinion shall be in form and substance
reasonably acceptable to such holders.

8.21         
“Employee” shall have the meaning set forth in Section 3.14.1.

8.22         
“Employee Benefit Plans” shall have the meaning set forth in Section 3.15.1.

8.23         
“Encumbrances” shall mean any Securities interests, liens, encumbrances, pledges, mortgages, conditional
or installment sales Contracts, title retention Contracts, transferability restrictions and other claims or burdens of any nature
whatsoever.

8.24         
 “Equity Line of Credit” shall have the meaning ascribed to such term in Section 6.18.

8.25         
“ERISA” shall have the meaning set forth in Section 3.15.1.

8.26         
“Escrow Agreement” shall have the meaning set forth in Section 5.1.11.

8.27         
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

8.28         
“Exempt Issuance” means the issuance of (a) shares of Common Stock and options to officers, employees,
or directors of the Company prior to and after the Closing Date pursuant to any (i) current stock or option plan previously adopted
or (ii) any future stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of
Directors or a majority of the members of a committee of non-employee directors established for such purpose in the amounts and
on the terms set forth on Schedule 8.28, (b) securities upon the exercise or exchange of or conversion of any Securities
issued hereunder, and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement, provided that such securities and any term thereof have not been amended since the date
of this Agreement to increase the number of such securities or to decrease the issue price, exercise price, exchange price or conversion
price of such securities and which securities and the principal terms thereof are set forth on Schedule 3.3.2, and described
in the SEC Reports filed not later than ten (10) days before the Closing Date, (c) securities issued pursuant to acquisitions or
strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall
only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or
an owner of an asset in a business synergistic with the business of the Company and shall be intended to provide to the Company
substantial additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company
is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities,
and (d) securities issued or issuable pursuant to this Agreement, or the Warrants, including, without limitation, Section 6.14,
or upon exercise or conversion of any such securities.

    	39

    	 

    

8.29         
“Exercise Notice” shall have the meaning set forth in Section 6.12.

8.30         
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

8.31         
“Final Termination Date” shall have the meaning set forth in Section 2.2.

8.32         
“Financial Statements” shall have the meaning set forth in Section 3.5.

8.33         
“GAAP” shall have the meaning ascribed to such term in Section 3.5.

8.34         
“G&M” shall mean Grushko & Mittman, P.C., with offices located at 515 Rockaway Avenue,
Valley Stream, New York 11581, Fax: 212-697-3575.

8.35         
“Governmental or Regulatory Authority” shall mean any court, tribunal, arbitrator, authority,
agency, commission, official or other instrumentality of the government of the United States or of any foreign country, any state
or any political subdivision of any such government (whether state, provincial, county, city, municipal or otherwise).

8.36         
“Hazardous Substances” shall mean oil and petroleum products, asbestos, polychlorinated biphenyls,
urea formaldehyde and any other materials classified as hazardous or toxic under any Environmental Laws.

8.37         
“Indebtedness” shall have the meaning set forth in Section 3.45.

8.38         
“Indemnified Losses” shall mean all losses, Liabilities, obligations, claims, demands, damages,
penalties, settlements, causes of action, costs and expenses arising out of any third party claim or action against an Indemnified
Party, including, without limitation, the actual costs paid in connection with an Indemnified Party’s investigation and evaluation
of any claim or right asserted against such Indemnified Party and all reasonable attorneys’, experts’ and accountants’
fees, expenses and disbursements and court costs including, without limitation, those incurred in connection with the Indemnified
Party’s enforcement of the indemnification provisions of Section Error! Reference source not found.
of this Agreement.

8.39         
“Initial Closing” shall have the meaning set forth in Section 2.1.

8.40         
“Initial Closing Date” shall have the meaning set forth in Section 2.1.

8.41         
“Initial Securities” shall have the meaning set forth in Section 2.1.

8.42         
“Leased Real Property” shall have the meaning set forth in Section 3.17.

8.43         
“Legal Proceeding” shall mean any action, suit, arbitration, claim or investigation by or before
any Governmental or Regulatory Authority, any arbitration or alternative dispute resolution panel, or any other legal, administrative
or other proceeding.

    	40

    	 

    

8.44         
“Liabilities” shall mean all obligations and liabilities including, without limitation, direct
or indirect indebtedness, guaranties, endorsements, claims, losses, damages, deficiencies, costs, expenses, or responsibilities,
in any of the foregoing cases, whether fixed or unfixed, known or unknown, asserted or unasserted, choate or inchoate, liquidated
or unliquidated, or secured or unsecured.

8.45         
“Licensed Intellectual Property” shall mean all Copyrights, Patents, Trademarks, technology rights
and licenses, trade secrets, know-how, inventions, methods, techniques and other intellectual property the Company has or has the
right to use in connection with its business, as applicable, pursuant to license, sublicense, agreement or permission.

8.46         
“Material Adverse Effect” shall have the meaning set forth in Section 3.1.

8.47         
 “OFAC” shall have the meaning ascribed to such term in Section 3.1(hh).

8.48         
“Order” shall mean any judgment, order, writ, decree, stipulation, injunction or other determination
whatsoever of any Governmental or Regulatory Authority, arbitrator or any other Person whose finding, ruling or holding is legally
binding or is enforceable as a matter of right (in any case, whether preliminary or final and whether voluntarily imposed or consented
to).

8.49         
“Organizational Documents” shall mean, with respect to any Person, such Person’s articles
or certificate of incorporation, by-laws or other governing or constitutive documents, if any.

8.50         
“Owned Intellectual Property” shall mean all Copyrights, Patents, Trademarks, technology, trade
secrets, know-how, inventions, methods, techniques and other intellectual property owned by the Company or any of its Subsidiaries.

8.51         
 “Participation in Future Financing” shall have the meaning ascribed to such term in Section 6.25.

8.52         
“Patents” shall mean patents and patent applications (including, without limitation, provisional
applications, utility applications and design applications), including, without limitation, reissues, patents of addition, continuations,
continuations-in-part, substitutions, additions, divisionals, renewals, registrations, confirmations, re-examinations, certificates
of inventorship, extensions and the like, any foreign or international equivalent of any of the foregoing, and any domestic or
foreign patents or patent applications claiming priority to any of the above.

8.53         
“Permits” shall mean all licenses, permits, certificates of authority, authorizations, approvals,
registrations, franchises, rights, Orders, qualifications and similar rights or approvals granted or issued by any Governmental
or Regulatory Authority relating to the Business.

8.54         
“Per Securities Purchase Price” shall have the meaning set forth in Section 1.2.

8.55         
“Person” shall mean any individual, corporation, partnership, firm, joint venture, association,
limited liability company, limited liability partnership, joint-stock company, trust, unincorporated organization or Governmental
or Regulatory Authority.

8.56         
“Placement Agent” shall mean Garden State Securities, Inc.

8.57         
“Premises” shall have the meaning set forth in Section 3.20.

    	41

    	 

    

8.58         
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation,
an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

8.59         
“Protection Period” shall have the meaning ascribed to such term in Section 6.13.

8.60         
“Public Information Failure” shall have the meaning ascribed to such term in Section 6.10.

8.61         
“Public Information Failure Payments” shall have the meaning ascribed to such term in Section
6.10.

8.62         
“Purchase Price” shall mean the “Total Purchase Price Amount” set forth in Exhibit
A for each respective Purchaser.

8.63         
“Purchasers” and “Purchaser” shall have the meaning set forth in the
preamble to this Agreement.

8.64         
“Real Property Leases” shall have the meaning set forth in Section 3.17.

8.65         
"Registration Rights Agreement” shall have the meaning set forth in Section 5.1.5.

8.66         
 “Regulatory Approvals” shall mean all Consents from all Governmental or Regulatory Authorities.

8.67         
“Removal Date” means the date that all of the issued Shares and Warrant Shares have been sold
pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current
public information requirements under Rule 144 and without volume or manner-of-sale restrictions.

8.68         
“Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock
then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Shares and Warrant Shares
issuable upon exercise in full of all Warrants or conversion in full of all shares of Preferred Stock, ignoring any conversion
or exercise limits set forth therein, and assuming that any previously unconverted shares of Preferred Stock will be held until
the third anniversary of the Closing Date.

8.69         
“Requirement of Law” shall mean any provision of law, statute, treaty, rule, regulation, ordinance
or pronouncement having the effect of law, and any Order.

8.70         
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

8.71         
“Schedules” shall have the meaning set forth in the preamble to Section 3.

8.72         
“SEC” shall mean Securities and Exchange Commission.

    	42

    	 

    

8.73         
“SEC Reports” shall have the meaning ascribed to such term in Section 3.5.

8.74         
“Securities” shall have the meaning set forth in the preamble of this Agreement.

8.75         
“Securities Act” shall have the meaning set forth in Section 3.21.

8.76         
“Securities Laws” means the securities laws of the United States or any state thereof and the
rules and regulations promulgated thereunder.

8.77         
“Share Dilution Adjustment” shall have the meaning ascribed to such term in Section 4.14.

8.78         
“Share Dilutive Issuance” shall have the meaning ascribed to such term in Section 4.14.

8.79         
“Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this
Agreement, provided that any such share of Common Stock shall not constitute a Share after such share has been irrevocably sold
pursuant to an effective registration statement under the Securities Act or pursuant to Rule 144 without further restrictions or
conditions to transfer pursuant to Rule 144, and provided further that Additional Shares and Additional Warrant Shares shall constitute
Shares only as provided in Section 4.14.

8.80         
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under
the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

8.81         
“Stock Option Plan” means the Stock Option Plan of the Company in effect as the date of this Agreement,
the principal terms of which have been disclosed in the SEC Reports.

8.82         
“Subsequent Closing” shall mean the funding which occurs on the Subsequent Closing Date.

8.83         
“Subsequent Closing Date” shall have the meaning set forth in Section 2.2.

8.84         
“Subsequent Closing Purchaser” shall have the meaning set forth in Section 1.3.

8.85         
“Subsequent Securities” shall have the meaning set forth in Section 2.2.

8.86         
“Subsidiaries” and “Subsidiary” shall mean, with respect to any entity
at any date, any direct or indirect corporation, limited or general partnership, limited liability company, trust, estate, association,
joint venture or other business entity of which (A) more than 30% of (i) the outstanding capital stock having (in the
absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such entity,
(ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership
or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly
or indirectly through one or more intermediaries, by such entity, or (B) is under the actual control of the Company.

8.87         
“Suppliers” shall have the meaning set forth in Section 3.17.2.

    	43

    	 

    

8.88         
“Surrendered Shares” shall have the meaning set forth in Section 5.1.11.

8.89         
“Tax Returns” shall mean any declaration, return, report, estimate, information return, schedule,
statements or other document filed or required to be filed in connection with the calculation, assessment or collection of any
Taxes or, when none is required to be filed with a taxing authority, the statement or other document issued by, a taxing authority.

8.90         
“Taxes” shall mean (i) any tax, charge, fee, levy or other assessment including, without limitation,
any net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, payroll, employment,
social Securities, unemployment, excise, estimated, stamp, occupancy, occupation, property or other similar taxes, including any
interest or penalties thereon, and additions to tax or additional amounts imposed by any federal, state, local or foreign Governmental
or Regulatory Authority, domestic or foreign or (ii) any Liability for the payment of any taxes, interest, penalty, addition
to tax or like additional amount resulting from the application of Treasury Regulation §1.1502-6 or comparable Requirement
of Law.

 

8.91         
“Termination Date” shall have the meaning ascribed to such term in Section 2.1.

8.92         
“Trademarks” shall mean trademarks, service marks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, uniform resource locators (URLs), domain names, trade dress, any other
names and locators associated with the Internet, other source of business identifiers, whether registered or unregistered and whether
or not currently in use, and registrations, applications to register and all of the goodwill of the business related to the foregoing.

8.93         
“Trading Day” means a day on which the principal Trading Market is open for trading.

8.94         
“Trading Market” means any of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange, the OTC Bulletin Board, the OTCQB or the OTCQX (or any successors to any of
the foregoing).

8.95         
“Transaction Documents” shall mean this Agreement, the Warrant, the Registration Rights Agreement
and all other documents, certificates and instruments executed and delivered at any Closing.

8.96         
“Transfer Agent” means VStock Transfer, LLC, with offices located at 77 Spruce Street, Suite 201,
Cedarhurst, New York 11516, and any successor transfer agent of the Company.

8.97         
“Variable Priced Equity Linked Instruments” shall have the meaning ascribed to such term in Section
6.18.

8.98         
“Variable Rate Transaction” shall have the meaning ascribed to such term in Section 6.18.

8.99         
“VWAP” means, for any date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported
by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if
the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin
Board and if prices for the Common Stock are then reported on the OTCQX, OTCQB or OTC Pink Marketplace maintained by the OTC Markets
Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the volume weighted average
price of the Common Stock on the first such facility (or a similar organization or agency succeeding to its functions of reporting
prices), or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.

    	44

    	 

    

8.100     
“Warrants” means, collectively, the Common Stock purchase warrants delivered to the Purchasers
at any Closing in the form of Exhibit B attached hereto.

8.101     
“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants, provided
that any share of Common Stock issued upon exercise of the Warrants shall not constitute an issued Warrant Share for purposes of
this Agreement after such share has been irrevocably sold pursuant to an effective registration statement under the Securities
Act or pursuant to Rule 144 without further restrictions or conditions to transfer pursuant to Rule 144.

 

[SIGNATURES
ON FOLLOWING PAGES]

 

 

 

 

 

 

 

 

 

 

 

 

    	45

    	 

    

IN WITNESS WHEREOF,
the parties hereto have executed this Securities Purchase Agreement as of [____________], 2014.

	COMPANY:

NXT-ID, INC.	 
	
         

        By: _____________________________

        Name: Gino Pereira

        Title: Chief Executive Officer

        

        Address:    One Reservoir Corporate Centre

            4 Research
Drive, Suite 402

            Shelton,
CT 06484.

Tel:            (203) 242-3076

Fax:            _______________________

email:         gino@nxt-id.com
	 
	 	 
	 	 
	PURCHASERS:
	 
	The Purchasers set forth on Exhibit A to the Agreement have executed a Subscription Agreement with the Company which provides, among other things, that by executing the Subscription Agreement each Purchaser is deemed to have executed the SECURITIES PURCHASE AGREEMENT in all respects and is bound to purchase the Securities set forth in such Subscription Agreement and Exhibit A to the Agreement.          

 

    	46

    	 

    

 

EXHIBIT A

SCHEDULE OF PURCHASERS

 

Initial Closing

 

	Name of Purchaser	Shares	Warrants	Warrant Shares	Total Purchase

Price Amount
	 	 	 	 	$
	
         
	 	 	 	TOTAL: $

Subsequent Closing

	Name of Subsequent Closing Purchaser	Shares	Warrants	Warrant Shares	Total Purchase
Price Amount
	 	 	 	 	TOTAL: $

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

 

EXHIBIT
B

Form
of Warrant

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

 

EXHIBIT
C

FUNDING INSTRUCTIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

EXHIBIT
D

FORM OF LEGAL OPINION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

 

EXHIBIT
E

FORM OF REGISTRATION
RIGHTS AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

 

EXHIBIT
F

FORM OF ESCROW AGREEMENTEXHIBIT 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights
Agreement (this “Agreement”) is made and entered into as of January __, 2014, between Nxt-ID, Inc., a Delaware
corporation (the “Company”), and each of the several purchasers signatory hereto (each such purchaser, a “Purchaser”
and, collectively, the “Purchasers”).

 

This Agreement is made
pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser (the “Purchase
Agreement”).

 

The Company and each Purchaser
hereby agrees as follows:

 

1.     Definitions.

 

Capitalized terms used
and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

“Advice”
shall have the meaning set forth in Section 6(d).

 

“Allowance
Period” shall have the meaning set forth in Section 2(d).

 

“Business
Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York are
authorized or required by law to remain closed.

 

“Effectiveness
Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the 90th calendar
day following the Initial Registration Statement and with respect to any additional Registration Statements which may be required
pursuant to Section 2(c) or Section 3(c), the 90th calendar day following the date on which an additional Registration
Statement is required to be filed hereunder; provided, however, that in the event the Company is notified by the
Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review
and comments, the Effectiveness Date as to such Registration Statement shall be the third Trading Day following the date on which
the Company is so notified if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date
falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.

 

“Effectiveness
Period” shall have the meaning set forth in Section 2(a).

 

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“Event”
shall have the meaning set forth in Section 2(d).

 

“Event
Date” shall have the meaning set forth in Section 2(d).

 

“Filing
Date” means, (i) with respect to the Initial Registration Statement required hereunder, the earlier of (x) February 21,
2014, or (y) the (3rd) third business day after the filing date of the Company’s Annual Report on Form 10-K for
the year ended December 31, 2013 (ii) with respect to any Registration Statement for a Subsequent Closing in which the Registrable
Securities will not be included on the Initial Registration Statement, the 30th day after the Subsequent Closing, and
(iii) with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the
earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related
to the Registrable Securities.

 

“Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

“Indemnified
Party” shall have the meaning set forth in Section 5(c).

 

“Indemnifying
Party” shall have the meaning set forth in Section 5(c).

 

“Initial
Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.

 

“Losses”
shall have the meaning set forth in Section 5(a).

 

“Plan
of Distribution” shall have the meaning set forth in Section 2(a).

 

“Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to
be incorporated by reference in such Prospectus.

 

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“Registrable
Securities” means, as of any date of determination, (a) all of the shares of Common Stock then issued and (b) all Warrant
Shares then issued and issuable upon exercise of the Warrants (assuming on such date the Warrants are exercised in full without
regard to any exercise limitations therein), (c) any additional shares of Common Stock issued and issuable in connection with any
anti-dilution provisions in the Common stock or the Warrants (in each case, without giving effect to any limitations on exercise
set forth in the Warrants) and (d) any securities issued or then issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable Securities
shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another,
Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of
such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have
been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been
previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale
restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect,
addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities
issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable,
were at no time held by any Affiliate of the Company, and all Warrants are exercised by “cashless exercise” as provided
in Section 2(c) of each of the Warrants), as reasonably determined by the Company, upon the advice of counsel to the Company.

 

“Registration
Statement” means any registration statement required to be filed hereunder pursuant to Section 2, including (in each
case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such
registration statement.

 

“Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

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

 

“Selling
Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).

 

“SEC
Guidance” means (i) any publicly available written or oral guidance of the Commission staff, or any comments, requirements
or requests of the Commission staff and (ii) the Securities Act.

 

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2.     Shelf Registration.

 

(a)               
On or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering
the resale of all of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415 (assuming
on such date the Warrants are exercised in full without regard to any exercise limitation therein). Each Registration Statement
filed hereunder shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith, subject to the provisions
of Section 2(e)) and shall contain (unless otherwise directed by at least a majority in interest of the Holders of Registrable
Securities then outstanding) substantially the “Plan of Distribution” attached hereto as Annex A. Subject
to the terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement filed under this Agreement
(including, without limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as possible after
the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act until all Registrable Securities covered by such Registration
Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions
pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement
under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities issuable upon exercise,
conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held
by any Affiliate of the Company) (the “Effectiveness Period”). The Company shall telephonically request
effectiveness of a Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall immediately notify the
Holders via facsimile or by e-mail of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically
confirms effectiveness with the Commission, which shall be the date requested for effectiveness of such Registration Statement.
The Company shall, by 9:30 a.m. Eastern Time on the Trading Day after the effective date of such Registration Statement, file a
final Prospectus with the Commission as required by Rule 424. Failure to so notify the Holder within one (1) Trading Day of such
notification of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(d).

 

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(b)              
Notwithstanding the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of
the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering
on a single registration statement, the Company agrees to promptly inform each of the Holders thereof and use its commercially
reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission, covering the maximum
number of Registrable Securities permitted to be registered by the Commission, on Form S-3 or such other form available to register
for resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2(e); provided, however,
that prior to filing such amendment, the Company shall be obligated to use diligent efforts to advocate with the Commission for
the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance
and Disclosure Interpretation 612.09.

 

(c)               
Notwithstanding any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section
2(d), if the Commission or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered
on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate
with the Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing
by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement
will be reduced as follows:

 

		a.	First, the Company shall reduce or eliminate any securities to be included by any Person other
than a Holder; and

 

		b.	Second, the Company shall reduce Registrable Securities represented by Warrant Shares (applied,
in the case that some Warrant Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered
Warrant Shares held by such Holders).

 

In the event
of a cutback hereunder, the Company shall give the Holder at least five (5) Trading Days prior written notice along with the calculations
as to such Holder’s allotment. In the event the Company amends the Initial Registration Statement in accordance with the
foregoing, the Company will use its best efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance
provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other
form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration
Statement, as amended.

 

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(d)               
If: (i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files a Registration Statement
without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein, the Company
shall be deemed to have not satisfied this clause (i)), or (ii) the Company fails to file with the Commission a request for acceleration
of a Registration Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities Act, within three
(3) Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that
such Registration Statement will not be “reviewed” or will not be subject to further review, or (iii) prior to the
effective date of a Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond in writing
to comments made by the Commission in respect of such Registration Statement within twenty (20) calendar days after the receipt
of comments by or notice from the Commission that such amendment is required in order for such Registration Statement to be declared
effective, or (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared effective
by the Commission by the Effectiveness Date of the Initial Registration Statement, or (v) after the effective date of a Registration
Statement, such Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities
included in such Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus therein to resell
such Registrable Securities, for more than fifteen (15) calendar days or more than an aggregate of thirty (30) calendar days (which
need not be consecutive calendar days) during any 12-month period (any such failure or breach being referred to as an “Event”,
and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of clause (ii) the date on which
such three (3) Trading Day period is exceeded, and for purpose of clause (iii) the date which such twenty (20) day period is exceeded,
and for purpose of clause (v) the date on which such fifteen (15) or thirty (30) calendar day period, as applicable, is exceeded
being referred to as “Event Date”), then, in addition to any other rights the Holders may have hereunder or
under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event
shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in
cash, as partial liquidated damages and not as a penalty, equal to 2% of the aggregate purchase price paid by such Holder pursuant
to the Purchase Agreement for the Registrable Securities held by Holder on each such Event Date. The aforedescribed liquidated
damages in connection with an Effectiveness Date default will not accrue with respect to Warrant Shares during the period commencing
one hundred and eighty (180) days after the Closing Date and ending ninety (90) days thereafter (the “Allowance Period”)
provided each of the following conditions applies: (i) a Filing Date and Effectiveness Date related default has not occurred,
(ii) one or more Registration Statements including all of the Warrant Shares, [unless such Warrant Shares were initially included
in and subsequently removed from a Registration Statement pursuant to Section 2(c)b], have been filed and are pending as of the
first day of the Allowance Period, with at least one such Registration Statement having been declared effective, (iii) Warrant
Shares included in an effective Registration Statement remain unsold by the Purchaser pursuant to such effective Registration
Statement, and (iv) the closing price of the Common Stock on the principal Trading Market is lower than the exercise price of
the Warrants each day during the Allowance Period. Provided that liquidated damages with respect to some Warrant Shares would
not accrue during the Allowance Period pursuant to the previous sentence, then Public Information Failure Payments will also not
accrue during the Allowance Period in connection with such Warrant Shares. If the Company fails to pay any partial liquidated
damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a
rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily
from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The
partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior
to the cure of an Event.

 

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(e)               
If Form S-3 is not available for the registration of the resale of Registrable Securities hereunder,
the Company shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register
the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the Commission.

 

3.     Registration Procedures.

 

In connection with the
Company’s registration obligations hereunder, the Company shall:

 

(a)               
Not less than five (5) Business Days prior to the filing of each Registration Statement and not less than one (1) Business
Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such
documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will
be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent registered public
accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder,
to conduct a reasonable investigation within the meaning of the Securities Act. Notwithstanding the above, the Company shall not
be obligated to provide the Holders advance copies of any universal shelf registration statement registering securities in addition
to those required hereunder, or any Prospectus prepared thereto. The Company shall not file a Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably
object in good faith, provided that, the Company is notified of such objection in writing no later than five (5) Business Days
after the Holders have been so furnished copies of a Registration Statement or one (1) Business Day after the Holders have been
so furnished copies of any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company
a completed questionnaire in the form attached to this Agreement as Annex B (a “Selling Stockholder Questionnaire”)
on a date that is not less than two (2) Business Days prior to the Filing Date or by the end of the fourth (4th) Business
Day following the date on which such Holder receives draft materials in accordance with this Section.

 

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(b)              
(i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement
and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as
to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement),
and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably
possible to the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement
(provided that, the Company shall excise any information contained therein which would constitute material non-public information
regarding the Company or any of its Subsidiaries), and (iv) comply in all material respects with the applicable provisions of the
Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement
during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by
the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

 

(c)               
If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares
of Common Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but
in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not
less than the number of such Registrable Securities.

 

(d)              
Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof,
be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as
reasonably possible (and, in the case of (i)(A) below, not less than one (1) Business Day prior to such filing) and (if requested
by any such Person) confirm such notice in writing no later than one (1) Business Day following the day (i)(A) when a Prospectus
or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission
notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments
in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when
the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission
or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by
the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of
the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible
for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement,
Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence
or existence of any pending corporate development with respect to the Company that the Company believes may be material and that,
in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided, however, in no event shall any such notice contain any information which would
constitute material, non-public information regarding the Company or any of its Subsidiaries.

 

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(e)               
Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending
the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

 

(f)               
Furnish to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment
thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference
to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished
or incorporated by reference) promptly after the filing of such documents with the Commission; provided, that any such item which
is available on the EDGAR system (or successor thereto) need not be furnished in physical form.

 

(g)              
Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered
by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).

 

(h)              
 The Company shall cooperate with any broker-dealer through which a Holder proposes to resell its Registrable Securities
in effecting a filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as requested by any such Holder,
and the Company shall pay the filing fee required by such filing within two (2) Business Days of request therefor.

 

(i)                
Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify
or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration
or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions
within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable
the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the
Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject
the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of
process in any such jurisdiction.

 

(j)                
If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free,
to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be
in such denominations and registered in such names as any such Holder may request.

 

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(k)              
Upon the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances
taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders
of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration
Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference,
and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will
contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies
the Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the
requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use
its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled
to exercise its right under this Section 3(k) to suspend the availability of a Registration Statement and Prospectus, subject
to the payment of partial liquidated damages otherwise required pursuant to Section 2(d), for a period not to exceed 60 calendar
days (which need not be consecutive days) in any 12-month period.

 

(l)                
Comply with all applicable rules and regulations of the Commission.

 

(m)            
From and after the date the Company becomes eligible to use Form S-3, the Company shall use its best efforts to maintain
eligibility for use of Form S-3 (or any successor form thereto) for the registration of the resale of Registrable Securities.

 

(n)              
The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of
Common Stock beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting
and dispositive control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect
to the registration of the Registrable Securities solely because any Holder fails to furnish such information within three Business
Days of the Company’s request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled
and any event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information
is delivered to the Company.

 

4.     Registration
Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred
to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made
with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then
listed for trading, (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in
writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications
or exemptions of the Registrable Securities) and (D) if not previously paid by the Company in connection with an Issuer Filing,
with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable
Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission
in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable
Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities
Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by
the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall
be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities
on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions
of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.

 

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5.     Indemnification.

 

(a)               
Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and
hold harmless each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable
Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors
and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack
of such title or any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and
employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of
such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against
any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses
(collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement
of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto,
in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the
performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements
or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly
for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution
of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration
Statement, such Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A
hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the
use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in
writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by
such Holder of the Advice contemplated in Section 6(d), but only if and to the extent that following the receipt of the Advice
the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders promptly
of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this
Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made
by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by any of the Holders in
accordance with Section 6(h).

 

    	11

    	 

    

 

(b)              
Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company,
its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest
extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon:
(x) such Holder’s failure to comply with any applicable prospectus delivery requirements of the Securities Act through no
fault of the Company or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement,
any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the
case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the
extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing
by such Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent,
but only to the extent, that such information relates to such Holder’s proposed method of distribution of Registrable Securities
and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus or in any amendment or supplement thereto or (iii)
in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), to the extent, but only to the extent,
related to the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to
the receipt by such Holder of the Advice contemplated in Section 6(d), but only if and to the extent that following the receipt
of the Advice the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability
of any selling Holder under this Section 5(b) be greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

(c)               
Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled
to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from
whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right
to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment
of all fees and expenses incurred in connection with defense thereof; provided, that, the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject
to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

 

An Indemnified
Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party
has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense
of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named
parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate
counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect
of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

 

    	12

    	 

    

 

Subject to the
terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten Business Days of written notice thereof to the Indemnifying
Party; provided, that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and
expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.

 

(d)              
Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient
to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable
by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified
Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among
other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include,
subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification
provided for in this Section was available to such party in accordance with its terms.

 

The parties hereto
agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation
or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute pursuant to
this Section 5(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder
from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

 

The indemnity
and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to
the Indemnified Parties.

 

    	13

    	 

    

 

6.     Miscellaneous.

 

(a)               
Remedies. In the event of a breach by the Company or by a Holder of any of their respective obligations under this
Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law
and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement.
Each of the Company and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred
by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action
for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be
adequate.

 

(b)              
No Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Neither the Company nor any of
its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration
Statements other than the Registrable Securities. The Company shall not file any other registration statements until all Registrable
Securities are registered pursuant to a Registration Statement that is declared effective by the Commission.

 

(c)               
Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the
Securities Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities
pursuant to a Registration Statement.

 

(d)              
Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of
a notice from the Company of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will
forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing
(the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or
amended) may be resumed. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly
as is practicable. The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the
disposition of the Registrable Securities hereunder shall be subject to the provisions of Section 2(d).

 

(e)               
Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall
be in writing and signed by the Company and the Holders of 67% or more of the then outstanding Registrable Securities (for purposes
of clarification, this includes any Registrable Securities issuable upon exercise or conversion of any Security). If a Registration
Statement does not register all of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous
sentence, then the number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders
and each Holder shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively
to the rights of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders may be given
only by such Holder or Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however,
that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of
the first sentence of this Section 6(f). No consideration shall be offered or paid to any Person to amend or consent to a waiver
or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this
Agreement.

 

    	14

    	 

    

 

(f)               
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder
shall be delivered as set forth in the Purchase Agreement.

 

(g)              
Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its
rights or obligations hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities.
Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under Section 5.7 of the
Purchase Agreement.

 

(h)              
No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor
shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to
its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts
with the provisions hereof. Except as set forth on Schedule 6(h), neither the Company nor any of its Subsidiaries has previously
entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been
satisfied in full.

 

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

 

(j)                
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be determined in accordance with the provisions of the Purchase Agreement.

 

(k)              
Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided
by law.

 

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

 

    	15

    	 

    

 

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

 

(n)              
Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several
and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance
of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership,
an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting
in concert or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other
matters, and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not asset
any such claim, with respect to such obligations or transactions. Each Holder shall be entitled to protect and enforce its rights,
including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations
of the Company contained was solely in the control of the Company, not the action or decision of any Holder, and was done solely
for the convenience of the Company and not because it was required or requested to do so by any Holder. It is expressly understood
and agreed that each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company
and the Holders collectively and not between and among Holders.

 

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

 

(Signature
Pages Follow)

 

 

 

 

 

 

 

 

 

 

    	16

    	 

    

 

IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.

 

	 	
        Nxt-ID, Inc.

         

         

	 	
        By:____________________________________

              Name:

              Title:

 

 

 

 

 

 

 

 

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

 

 

 

 

 

 

 

 

 

    	17

    	 

    

 

[SIGNATURE
PAGE OF HOLDERS TO ITEN RRA]

 

 

Name of Holder: __________________________

 

Signature of Authorized Signatory of Holder: __________________________

 

Name of Authorized Signatory: _________________________

 

Title of Authorized Signatory: __________________________

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	18

    	 

    

 

Annex A

 

Plan of Distribution

 

Each Selling Stockholder
(the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their securities covered hereby on the OTC Bulletin Board or any other stock exchange,
market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated
prices. A Selling Stockholder may use any one or more of the following methods when selling securities:

		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

		·	block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction;

		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

		·	an exchange distribution in accordance with the rules of the applicable exchange;

		·	privately negotiated transactions;

		·	settlement of short sales;

		·	in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities
at a stipulated price per security;

		·	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

		·	a combination of any such methods of sale; or

		·	any other method permitted pursuant to applicable law.

The Selling Stockholders
may also sell securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”),
if available, rather than under this prospectus.

Broker-dealers engaged
by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction
not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction
a markup or markdown in compliance with FINRA IM-2440.

    	1

    	 

    

In connection with
the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions
they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions,
or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter
into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which
securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).

The Selling Stockholders
and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within
the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement
or understanding, directly or indirectly, with any person to distribute the securities.

The Company is required
to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed
to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.

Because Selling
Stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the
prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this
prospectus. The Selling Stockholders have advised us that there is no underwriter or coordinating broker acting in connection with
the proposed sale of the resale securities by the Selling Stockholders.

We agreed to keep
this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without
registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of
similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or
any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if
required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be
sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.

Under applicable
rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation
M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and
sales of securities of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser
at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

    	2

    	 

    

Annex B

Nxt-ID,
Inc.

Selling Stockholder Notice and Questionnaire

The undersigned
beneficial owner of common stock (the “Registrable Securities”) of NXT-ID, INC. (the “Company”),
understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”)
a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with
the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document
is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.
All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

Certain legal consequences
arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

NOTICE

The undersigned
beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable
Securities owned by it in the Registration Statement.

 

 

 

 

 

 

 

    	1

    	 

    

 

The undersigned hereby provides the
following information to the Company and represents and warrants that such information is accurate:

QUESTIONNAIRE

		1.	Name.

	 	(a)	Full Legal Name of Selling Stockholder
	 	 	 
	 	 	 
	 	 	 
	 	(b)	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:
	 	 	 
	 	 	 
	 	 	 
	 	(c)	Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire):
	 	 	 
	 	 	 
	 	 	 
	2.	Address for Notices to Selling Stockholder:
	 	 	 
	 	 	 
	 	 	 
	 	 	 

	Telephone:	 
	Fax:	 	 
	Contact Person:	 

 

	3.	Broker-Dealer Status:
	 	 	 
	 	(a)	Are
you a broker-dealer?
	 	 	 
	 	 	Yes o No o
	 	 	 
	 	(b)	If
“yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services
to the Company?
	 	 	 
	 	 	Yes o No o
	 	 	 
	 	Note:	If
“no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in
the Registration Statement.

 

    	2

    	 

    

	 	 	 
	 	(c)	Are you an affiliate of a broker-dealer?
	 	 	 
	 	 	Yes o No o
	 	 	 
	 	(d)	If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?
	 	 	 
	 	 	Yes o No o
	 	 	 
	 	Note:	If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
	 	 	 
	4.	Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.
	 	 	 
	 	Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of
    any securities of the Company other than the securities issuable pursuant to the Purchase Agreement.
	 	 	 
	 	(a)	Type
and Amount of other securities beneficially owned by the Selling Stockholder:
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	5.	Relationships with the Company:
	 	 	 
	 	Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.
	 	 	 
	 	State any exceptions here:
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

    	3

    	 

    

The undersigned
agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent
to the date hereof at any time while the Registration Statement remains effective.

By
signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through
5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements
thereto. The undersigned understands that such information will be relied upon by the Company in
connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements
thereto.

IN WITNESS WHEREOF
the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person
or by its duly authorized agent.

	Date: _____________________	Beneficial Owner: ________________________
	 	 
	 	By: _____________________________
	 	       Name:
	 	       Title:

 

PLEASE FAX A COPY (OR EMAIL A .PDF COPY)
OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO: 

 

Robinson Brog Leinwand Greene Genovese &
Gluck P.C.

875 Third Avenue

New York, New York 10022

Attn: David E. Danovitch

 

 

    	4

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