Document:

Exhibit 4.1

 

THIS SECURITY HAS NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED THEREBY.

 

Original Issue Date: August 16, 2018

Principal Amount: $303,000

Purchase Price: $252,500

 

SECURED
PROMISSORY NOTE

DUE
FEBRUARY 15, 2019

 

THIS SECURED PROMISSORY
NOTE is one of a series of duly authorized and validly issued Secured Promissory Notes of DPW Holdings, Inc., a Delaware corporation
(the “Company”), having its principal place of business at 201 Shipyard Way, Newport Beach, CA 92663, designated
as its Secured Promissory Note due February 15, 2019 (this “Note”, or collectively with the other Notes of such
series, the “Notes”).

 

FOR VALUE RECEIVED,
the Company promises to pay to the order of ___________________ or its registered assigns (the “Holder”), or
shall have paid pursuant to the terms hereunder, the principal sum of $303,000 on February 15, 2019 (the “Maturity Date”)
or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder
on the then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following
additional provisions:

 

Section 1.          Definitions.
For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein
shall have the meanings set forth in the Purchase Agreement (as defined below) and (b) the following terms shall have the following
meanings:

 

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

 

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

 

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

 

“Common
Stock” means the Class A common stock of the Company, par value $0.001 per share, and any other class of securities into
which such securities may hereafter be reclassified or changed.

 

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

 

“Event
of Default” shall have the meaning set forth in Section 4(a).

 

“Late
Fees” shall have the meaning set forth in Section 2(c).

 

“Mandatory
Default Amount” means the payment of one hundred twenty percent (120%) of the outstanding principal amount of this Note
and accrued and unpaid interest hereon, in addition to the payment of all other amounts, costs, expenses and liquidated damages
due in respect of this Note.

 

“New
York Courts” shall have the meaning set forth in Section 5(d).

 

“Note
Register” shall have the meaning set forth in Section 2(b).

 

“Original
Issue Date” means the date of the first issuance of this Note, regardless of any transfers of any Note and regardless
of the number of instruments which may be issued to evidence such Note.

 

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

 

“Purchase
Agreement” means that certain Securities Purchase Agreement, dated August 15, 2018 between the Company and the Holder.

 

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

 

“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1 of the Purchase Agreement and shall, where applicable,
also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

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

 

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

 

Section
2.         Interest and Amortization.

 

a)       Payment
of Interest in Cash. The Company shall pay interest to the Holder on the aggregate principal amount of this Note at the rate
of eight percent (8%) per annum. Following the Closing Date, all interest payments hereunder shall be payable in cash. Accrued
and unpaid interest shall be due and payable on the Maturity Date.

 

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b)       Interest
Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve (12) thirty (30) calendar day
periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together
with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest
hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration
and transfers of this Note (the “Note Register”).

 

c)       Late
Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the
lesser of eighteen percent (18%) per annum or the maximum rate permitted by applicable law (the “Late Fees”)
which shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.

 

d)       Voluntary
Prepayment. So long as no Event of Default (as defined in Section 6(a)) hereof exists, at any time upon ten (10) days written
notice to the Holder, the Company may prepay any portion of the principal amount of this Note, any accrued and unpaid interest,
and any other amounts due under this Note. If the Company exercises its right to prepay the Note, the Company shall make payment
to the Holder of an amount in cash equal to the sum of the then outstanding principal amount of this Note, any accrued and unpaid
interest.

 

Section
3.         Registration of Transfers and Exchanges.

 

a)       Different
Denominations. This Note is exchangeable for an equal aggregate principal amount of Note of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

 

b)       Investment
Representations. This Note has been issued subject to certain investment representations of the original Holder and may be
transferred or exchanged only in compliance with applicable federal and state securities laws and regulations.

 

c)       Reliance
on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company
may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary.

 

Section
4.         Events of Default.

 

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

 

i.       any
default in the payment of (A) the principal amount of this Note or (B) interest, liquidated damages and other amounts owing to
a Holder on this Note, as and when the same shall become due and payable (whether on the Maturity Date or by acceleration or otherwise)
which default is not cured within ten (10) Trading Days;

 

ii.       the
Company shall fail to observe or perform any other covenant, provision, or agreement contained in this Note which failure is not
cured, if possible to cure, within the earlier to occur of (A) ten (10) Trading Days after notice of such failure sent by the Holder
or by any other Holder to the Company and (B) ten (10) Trading Days after the Company has become or should have become aware of
such failure;

 

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iii.       a
material default or material event of default (subject to any grace or cure period provided in the applicable agreement, document
or instrument) shall occur under any of the Transaction Documents;

 

iv.       except
as otherwise specifically provided in this Section 4(a) any representation or warranty made in this Note, any other Transaction
Documents, any written statement pursuant hereto or thereto, any other agreement, contract, lease, document or instrument to which
the Company or any Subsidiary is obligated (including those covered by clause (vi) below), or any other report, financial statement
or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the
date when made or deemed made;

 

v.       the
Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;

 

vi.       the
Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $50,000 whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming
or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

vii.       the
Company does not meet the current public information requirements under Rule 144, which failure is not cured, if possible to cure,
within ten (10) Trading Days after the expiration of the applicable grace period permitted
under Rule 12b-25 of the Exchange Act, further provided that the Company files a Form 12b-25 for the relevant report required to
meet the current public information requirements under Rule 144;

 

viii.       the
Company or any Subsidiary shall: (A) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of
it or any of its properties; (B) admit in writing its inability to pay its debts as they mature; (C) make a general assignment
for the benefit of creditors; (D) be adjudicated as bankrupt or insolvent or be the subject of an order for relief under Title
11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law
or statute of any other jurisdiction or foreign country; or (E) file a voluntary petition in bankruptcy, or a petition or an answer
seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization, insolvency, readjustment
of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against
it in any proceeding under any such law, or (F) take or permit to be taken any action in furtherance of or for the purpose of effecting
any of the foregoing;

 

ix.       if
any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Subsidiary,
by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company or any Subsidiary,
or appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all or any substantial part
of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of thirty (30) days;

 

x.       the
occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company or
any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $50,000 individually or in the aggregate,
and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after the date thereof;
or

 

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xi.       any
monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $50,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of ten (10) days;

 

xii.       the
Common Stock is delisted from or ceases to trade on the NYSE American unless it is listed on the New York Stock Exchange or any
market of the Nasdaq Stock Market in the definition of Trading Market;

 

xiii.      the
Company fails to use its best efforts to have the issuance of the Commitment Shares receive Exchange Approval within the time required
by the Purchase Agreement;

 

xiv.      the
Form S-3, which shall include the Commitment Shares as registrable securities (the “Form S-3”), shall not have
been filed within fourteen (14) days after the date that the Commission shall have declared the Company’s presently filed
registration statement on Form S-3 (File No. 333-226301) effective and the Company shall not have used its best efforts to have
such Form S-3 declared effective by the Commission within thirty (30) days of the Filing Date.

 

xv.       is
advised by the Company that the Prospectus Supplement may not be used (or the Company otherwise, directly or indirectly, communicates
that information to any Person) and a new Prospectus Supplement has not been filed within ten (10) Trading Days;

 

xvi.      the
Commission suspends trading of the Common Stock; or

 

xvii.     the
Company fails to use the proceeds in the manner disclosed by the Company to each Purchaser.

 

b)       Remedies
Upon Event of Default. If any Event of Default occurs, then the outstanding principal amount of this Note, plus accrued but
unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become,
at the Holder’s election, immediately due and payable in cash at the Mandatory Default
Amount. After the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest
rate on this Note shall accrue at an additional interest rate equal to the lesser of one and one-half percent (1.5%) per month
(eighteen percent (18.0%) per annum) or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory
Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration
described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice
of any kind (other than the Holder’s election to declare such acceleration), and the Holder may immediately and without expiration
of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable
law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have
all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 4(b).
No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

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Section
5.                  Miscellaneous.

 

a)       Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be in writing and delivered
personally, by email or facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company at 201
Shipyard Way, Newport Beach, CA 92663, or such other address, facsimile number, or email address as the Company may specify for
such purposes by notice to the Holder delivered in accordance with this Section 7(a). Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by email or facsimile, or sent
by a nationally recognized overnight courier service addressed to each Holder at the email address, facsimile number, or address
of the Holder appearing on the books of the Company, or if no such email address, facsimile number, or address appears on the books
of the Company, at the principal place of business of such Holder. Any notice or other communication or deliveries hereunder shall
be deemed given and effective on the earliest (i) the date of transmission, if such notice or communication is delivered via facsimile
or email at the facsimile number or email address set forth on the signature pages attached hereto prior to 12:00 p.m. (New York
City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered
via facsimile or email at the facsimile number or email address set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 12:00 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom
such notice is required to be given.

 

b)      Absolute
Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note
at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.

 

c)       Lost
or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

 

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

 

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

 

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f)       Amendments.
The prior written consent of 50.1% in interest of the Holders, which shall be calculated
based on the principal amount of all Notes outstanding at the time of such consent, shall be required for any change or amendment
to the Notes.

 

g)       Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.
If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and
the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has been enacted.

 

h)       Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief.  The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity
(including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note.  The
Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the
amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of
the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that,
in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies,
to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and
without any bond or other security being required. The Company shall provide all information and documentation to the Holder that
is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this
Note.

 

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

 

j)       Payment
of Collection, Enforcement and Other Costs. If (i) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (ii) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors' rights and involving a claim under this Note, then the Company shall pay the
reasonable and documented out-of-pocket costs incurred by the Holder for such collection, enforcement or action or in connection
with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, attorneys' fees and disbursements.

 

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

 

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF,
the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

 

 

	 	DPW HOLDINGS, INC.	 
	 	 	 	 
	 	By:	 	 
	 	 	Name: Milton C. Ault III	 
	 	 	Title: Chief Executive Officer	 
	 	 	 	 
	 	Facsimile No. for delivery of Notices:	 

 

 

8Exhibit
10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”) is dated as of August 16, 2018, by and among DPW Holdings,
Inc., a Delaware corporation (the “Company”), and the purchasers identified on the signature pages hereto (each,
including its successors and permitted assigns, a “Purchaser,” or in the aggregate, the “Purchasers”).

 

WHEREAS,
the Company desires to issue and sell to the Purchasers, and the Purchasers desire to purchase from the Company, the Notes (as
defined below) as set forth herein, and as a condition of the issuance and delivery of the Notes, receive Commitment Shares (as
defined below); 

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act”), and/or Rule 506(b) promulgated thereunder, the Company will sell and issue
to the Purchasers the Notes (as defined below) without registration.

 

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

 

ARTICLE
I. 

DEFINITIONS

 

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

  

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

 

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

 

“Agent”
shall have the meaning as defined in the Security and Pledge Agreement.

 

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

 

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

 

“Business
Day” means any day except any Saturday, any Sunday, or any day on which the Federal Reserve Bank of New York is
closed.

 

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

 

“Closing”
means closing of the purchase and sale of the Securities pursuant to Section 2.2.

 

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

 

“Commitment
Shares” means 100,000 shares of Common Stock to be issued by the Company to each Purchaser pursuant to Section 2.3(a)(ii).

 

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“Common
Stock” means the Class A common stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may hereafter be reclassified or changed. 

 

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

 

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

 

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

 

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

 

“Exchange
Approval” means approval of the Commitment Shares contemplated by this Agreement by the NYSE American, which approval
shall be obtained no later than twenty-five (25) days after the Closing Date.

 

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

 

“Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1(ll).

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

 

“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated 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; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP.

 

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

 

“Liabilities”
means all direct or indirect liabilities, Indebtedness and obligations of any kind of Company to the Purchasers, howsoever created,
arising or evidenced, whether now existing or hereafter arising (including those acquired by assignment), absolute or contingent,
due or to become due, primary or secondary, joint or several, whether existing or arising through discount, overdraft, purchase,
direct loan, participation, operation of law, or otherwise, including, but not limited to, pursuant to the Notes, this Agreement
and/or any of the other Transaction Documents, all accrued but unpaid interest on the Notes, any letter of credit, any standby
letter of credit, and/or outside attorneys’ and paralegals’ fees or charges relating to the preparation of the Transaction
Documents and the enforcement of the Purchasers’ rights, remedies and powers under this Agreement, the Notes and/or the other
Transaction Documents.

 

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

 

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

 

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

 

    	 	2 	 

     

    

 

“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.15.

 

“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(qq). 

 

“Note”
means the Company’s Secured Original Issue Discount Promissory Note due February 15, 2019 issued by the Company to each Purchaser
hereunder, in the form of Exhibit A attached hereto.

 

“Off-balance Sheet
Arrangement” shall have the meaning ascribed to such term in Section 3.1(pp).

 

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

  

“Principal
Amount” means, as to the Purchaser, the principal amount of the Note set forth opposite such Purchaser’s name in
column (2) on the Schedule of Purchasers attached hereto in United States Dollars. 

 

“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. 

 

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

 

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

 

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

 

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

 

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

 

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

 

“Securities”
means the Notes and the Commitment Shares to be issued to the Purchasers pursuant to this Agreement. 

 

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

 

“Security and
Pledge Agreement” means the Security and Pledge Agreement dated on the date hereof by and among Super Crypto Mining,
Inc. and the Purchasers, as hereinafter amended and/or supplemented altogether with all exhibits, schedules and annexes to such
Security and Pledge Agreement, pursuant to which all Liabilities of the Company to the Purchasers under the Transaction Documents
are secured by the Collateral (as defined in the Security and Pledge Agreement), which security interest in the Collateral shall
be perfected by each Purchaser’s UCC-1, filed with the Secretary of State of the State of Delaware, to the extent perfectable
by the filing of a UCC-1 Financing Statement, or if applicable, a UCC-3 Financing Statement Amendment and such other documents
and instruments related thereto, which Security and Pledge Agreement is annexed hereto as Exhibit B.

 

“Shell
Company” means an entity that fits within the definition of “shell company” under Section 12b-2 of the Exchange
Act and Rule 144.

 

    	 	3 	 

     

    

 

“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act. 

 

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

 

“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof. 

 

“Super
Crypto” means Super Crypto Mining, Inc., a Delaware corporation.

 

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

 

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

 

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

 

“Transfer
Agent” means Computershare Trust Company, N.A., and any successor transfer agent of the Company. 

 

ARTICLE
II. 

PURCHASE
AND SALE 

 

2.1        Purchase.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company shall sell and issue to each Purchaser, and each Purchaser shall
purchase, severally and not jointly, from the Company: 

 

(a)
       a Note with a Principal Amount equal to
the amount set forth opposite such Purchaser’s name in column (2) on the Schedule of Purchasers attached hereto; and

 

(b)
       in consideration for the Purchaser’s execution and delivery of this Agreement,
100,000 Commitment Shares. 

 

The
purchase of the Note and Commitment Shares will be completed in a single tranche as provided herein.

 

2.2        Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, concurrent with the execution and delivery
of this Agreement by the parties hereto, the Company agrees to sell, and each Purchaser agrees to purchase, the Subscription Amount
of Notes and Commitment Shares as set forth on the signature page hereto executed by such Purchaser. At the Closing, each Purchaser
shall deliver to the Company, via wire transfer to an account designated by the Company, immediately available funds equal to such
Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the Company shall
deliver to such Purchaser its Note and the Commitment Shares as set forth in Section 2.3(a), and the Company and such Purchaser
shall deliver the other items set forth in Section 2.3 deliverable at the Closing. Upon satisfaction of the covenants and
conditions set forth in Sections 2.3 and 2.4 for Closing, such Closing shall occur at the offices of Sichenzia Ross Ference
Kesner LLP or such other location as the parties hereto shall mutually agree, and may by agreement be undertaken remotely by electronic
exchange of Closing documentation.

 

    	 	4 	 

     

    

 

2.3       Deliveries.

 

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

 

(i)       this
Agreement duly executed by the Company;

 

(ii)       Upon
the Company’s receipt of Exchange Approval, the Commitment Shares;

 

(iii)       a
Note with a Principal Amount equal to the amount set forth opposite such Purchaser’s name in column (2) on the Schedule
of Purchasers attached hereto, registered in the name of the Purchaser;

 

(iv)       the
Security and Pledge Agreement, duly executed by Super Crypto Mining, Inc.; and

 

(v)       a
certificate executed by the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions, as adopted by
the Board of Directors in a form reasonably acceptable to the Purchasers, approving (A) the entering into and performance of this
Agreement and the other Transaction Documents and the issuance, offering and sale of the Securities and (B) the performance of
the Company and each of its Subsidiaries of their respective obligations under the Transaction Documents contemplated therein,
(ii) the Company’s certificate of incorporation and (iii) the Company’s bylaws, each as in effect at the Closing.

 

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

 

(i)
       this Agreement, duly executed by the Purchaser; 

 

(ii)
       the Purchaser’s Subscription Amount by wire transfer to the account specified in
writing by the Company; and

 

(iii)       the
Security and Pledge Agreement, duly executed by the Purchaser.

 

2.4        Closing
Conditions.

 

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

 

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

 

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

 

(iii)
       the delivery by the Purchaser of the items set forth in Section 2.3(b) of this Agreement.

 

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

 

(i)       the
accuracy in all material respects when made as to the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein);

 

    	 	5 	 

     

    

 

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

 

(iii)       the
delivery by the Company of the items set forth in Section 2.3(a) of this Agreement;

 

(iv)       there
is no existing Event of Default (as defined in the Notes) and no existing event which, with the passage of time or the giving of
notice, would constitute an Event of Default;

 

(v)        there
is no breach of an obligations, covenants and agreements under the Transaction Documents and no existing event which, with the
passage of time or the giving of notice, would constitute a breach under the Transaction Documents;

 

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

 

(vii)       from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P.
shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported
by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New
York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international
calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the
reasonable judgment of the Purchaser, and without regard to any factors unique to the Purchaser, makes it impracticable or inadvisable
to purchase the Securities at the Closing.

 

ARTICLE
III. 

REPRESENTATIONS
AND WARRANTIES 

 

3.1        Representations
and Warranties of the Company. Except as set forth in the disclosure schedules attached hereto (the “Disclosure Schedules”),
which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the
extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company (which for purposes
of this Section 3.1 means the Company and all of its Subsidiaries) hereby makes the following
representations and warranties to each Purchaser as of the Closing Date:

 

(a)       Subsidiaries.
All of the direct and indirect Subsidiaries and parent entities of the Company are set forth on Schedule 3.1(a) hereto.
The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear
of any Liens, other than as set forth on Schedule 3.1(a) hereto, and all of the issued and outstanding shares of capital
stock or other equity interests of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive
and similar rights to subscribe for or purchase securities. 

 

(b)    Organization
and Qualification. The Company and each of the Subsidiaries and parent entities of the Company is an entity duly incorporated
or otherwise organized and validly existing, and the Company and each of the Subsidiaries and such parent entities is in good standing,
under the laws of the jurisdiction of its incorporation or organization, as applicable, 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
or parent entity of the Company is in violation or default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. The Company and each of the Subsidiaries and parent entity
of the Company 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, its parent entities
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.

 

    	 	6 	 

     

    

 

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

 

(d)       No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not, except as set forth on Schedule 3.1(d): (i) conflict with or violate any provision
of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter
documents; (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become
a default) under, result in the creation of any Lien (except Liens in favor of the Purchaser) upon any of the properties or assets
of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of
the Company or any Subsidiary is bound or affected; or (iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii)
and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(e)       Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the
filings required pursuant to Sections 4.3 and 4.11 of this Agreement; (ii) the notice and/or application(s) to each applicable
Trading Market for the issuance and sale of the Securities and the listing of the Commitment Shares for trading thereon in the
time and manner required thereby; (iii) the filing of Form D with the Commission and such filings as are required to be made
under applicable state securities laws and (iv) the filing of a registration statement on Form S-3 as required by Section 4.14
of this Agreement (collectively, the “Required Approvals”).

 

    	 	7 	 

     

    

 

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

 

(g)          Capitalization;
Corporate Governance. 

 

(i)
The capitalization of the Company is as set forth on Schedule 3.1(g)(i), which Schedule 3.1(g)(i) shall
also include (A) the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the
date hereof and (B) the number of authorized and reserved shares of capital stock of the Company. The Company has not issued capital
stock since its most recently filed periodic report under the Exchange Act except as set forth on Schedule 3.1(g)(i),
except the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and except
pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic
report under the Exchange Act except as set forth on Schedule 3.1(g)(i). All of the outstanding shares of capital stock
of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights
to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities. There are no stockholders’ agreements, voting agreements or other
similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders. 

 

(ii)
The names and titles of each of the Company’s principal officers, directors and beneficial holders of at least five percent
(5%) of the outstanding shares of each class of the Company’s capital stock on a fully diluted basis are as set forth on
Schedule 3.1(g)(ii), which Schedule 3.1(g)(ii) shall also include each committee of directors as well as the names
and titles of each director currently serving on each such committee.

 

(h)          Indebtedness.
Schedule 3.1(h) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has commitments. Except as set forth on Schedule 3.1(h), neither
the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

(i)          SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two (2) years preceding the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC Reports”). As of their respective dates,
the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial
statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and
the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments. The Company expects to file its Form 10-Q for the three and six months ended June 30, 2018 with the
time required by the Rules of the Commission.

 

    	 	8 	 

     

    

 

(j)       Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in the Company’s Annual Report on Form 10-K, including such latest
audited financial statements, or in a subsequent SEC Report filed prior to the date hereof and except as set forth in Schedule
3.1(g), Schedule 3.1(m), and Schedule 3.1(j): (i) there has been no event, occurrence or development that
has had or that could reasonably be expected to result in a Material Adverse Effect; (ii) the Company has not incurred any
liabilities or obligations (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or disclosed in filings made with the Commission; (iii) the Company has not altered its method
of accounting; (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock; (v) the Company has not sold,
assigned or transferred any other tangible assets or Intellectual Property Rights, or canceled any debts or claims, except in the
ordinary course of business; (vi) the Company has not suffered any substantial loss contingencies
or waived any rights of material value, whether or not in the ordinary course of business, or suffered the loss of any material
amount of prospective business, (vii) the Company has not entered into any acquisition or financing transactions, whether
or not in the ordinary course of business, other than with respect to the Transaction Documents,
(viii) the Company has not issued any equity securities to any officer, director or Affiliate; and (ix)
no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or
exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial
condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation
is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation
is made. 

 

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

 

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

 

    	 	9 	 

     

    

 

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

 

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

 

(o)     Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except as set forth in Schedule 3.1(o) and except for (i) Liens as do not
materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such
property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate
reserves have been made therefor in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties.
Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting
and enforceable leases with which the Company and the Subsidiaries are in compliance.

 

(p)       Material
Agreements. Except for the Transaction Documents (with respect to clause (i) only) or as set forth on Schedule 3.1(p)
hereto, or as would not be reasonably likely to have a Material Adverse Effect, (i) the Company and each of its Subsidiaries have
performed all obligations required to be performed by them to date under any written or oral contract, instrument, agreement, commitment,
obligation, plan or arrangement, filed or required to be filed with the Commission (the “Material Agreements”),
(ii) neither the Company nor any of its Subsidiaries has received any notice of default under any Material Agreement and, (iii)
to the best of the Company's knowledge, neither the Company nor any of its Subsidiaries is in default under any Material Agreement
now in effect.

 

(q)     Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights as necessary or required for use in connection with their respective businesses as presently conducted and which
the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
Neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of the Intellectual Property Rights
has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the
date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements
included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights
violate or infringe upon the rights of any Person, except as could not have or could not reasonably be expected to have a Material
Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights except as disclosed in Schedule 3.1(q). The Company
and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their
intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. All Material Agreements not entered into in the ordinary course of business have been filed with the
Commission.

 

    	 	10 	 

     

    

 

(r)       Transactions
with Affiliates and Employees. Except as disclosed in Schedule 3.1(r), none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered; (ii) reimbursement
for expenses incurred on behalf of the Company; and (iii) other employee benefits. 

 

(s)       Payments
of Cash. Except as disclosed on Schedule 3.1(s), since September 22, 2016, neither the Company, its directors or officers,
or any Affiliates or agents of the Company, have withdrawn or paid cash to any vendor in an aggregate amount that exceeds Five
Thousand Dollars ($5,000) for any purpose.

 

(t)       Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of
the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of
the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).
The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange
Act) that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting
of the Company and its Subsidiaries.

 

(u)       Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiaries to any broker,
financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. 

 

    	 	11 	 

     

    

 

(v)       Private
Placement/No Disqualification Events. Assuming the accuracy of each Purchaser’s representations and warranties set forth
in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to
the Purchaser as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations
of the Trading Market, provided that its approval thereof is obtained prior to the issuance of the Commitment Shares. With respect
to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the Securities Act, none of the Company, any of
its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering
contemplated hereby, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated
on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the
Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered
Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under
the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).
The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the
Purchasers a copy of any disclosures provided thereunder.

 

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

 

(x)       Registration
Rights.  Other than as set forth on Schedule 3.1(x) and pursuant to this Agreement, no Person has any right
to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiaries.

 

(y)       Listing
and Maintenance Requirements; Trading Market Regulation. The Common Stock is registered pursuant to Section 12(b) of the
Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is
contemplating terminating such registration. Except as disclosed in the SEC reports, the Company has not, in the twelve (12) months
preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to
the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company
is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing
and maintenance requirements.

 

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

 

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

 

    	 	12 	 

     

    

 

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

 

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

 

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

 

(ee)     Accountants.
The Company’s accounting firm is set forth on Schedule 3.1(ee). To the knowledge and belief of the Company, such
accounting firm is a registered public accounting firm as required by the Exchange Act.

 

(ff)     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.

 

(gg)     Acknowledgment
Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that each Purchaser is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that each Purchaser is not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice
given by any Purchaser or any of its respective representatives or agents in connection with the Transaction Documents and the
transactions contemplated thereby is merely incidental to each Purchaser’s purchase of the Securities. The Company further
represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents
has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

    	 	13 	 

     

    

 

(hh)     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.

 

(ii)      Stock
Option Plans. 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 respective financial results or prospects.

 

(jj)     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.

 

(kk)     U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.

 

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

 

(mm)     Promotional
Stock Activities. Neither the Company, its officers, its directors, nor any affiliates or agents of the Company have engaged
in any stock promotional activity that could give rise to a complaint, inquiry, or trading suspension by the Commission alleging
(i) a violation of the anti-fraud provisions of the federal securities laws, (ii) violations of the anti-touting provisions, (iii)
improper “gun-jumping; or (iv) promotion without proper disclosure of compensation.

 

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

 

(oo)    Seniority.
As of the Closing Date, other than as set forth on Schedule 3.1(oo), no Indebtedness or other claim against the Company
is senior to the Notes in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise,
other than indebtedness secured by purchase money security interests (which is senior only as to underlying assets covered thereby)
and capital lease obligations (which is senior only as to the property covered thereby).

 

    	 	14 	 

     

    

 

(pp)     No “Off-balance
Sheet Arrangements”. Other than as set forth in Schedule 3.1(pp), neither the Company nor any of its Affiliates
is involved in any “Off-balance Sheet Arrangements”. For purposes hereof an “Off-balance Sheet Arrangement”
means any transaction or contract to which an entity unconsolidated with the Company or any of its Affiliates is a party and under
which either the Company or any such Affiliate has: (i) any obligation under a guarantee contract pursuant to which the Company
or any of its Affiliates could be required to make payments to the guaranteed party, including any standby letter of credit, market
value guarantee, performance guarantee, indemnification agreement, keep-well or other support agreement; (ii) any retained or contingent
interest in assets transferred to such unconsolidated entity that serves as credit, liquidity or market risk support to the entity
in respect of such assets; (iii) any variable interest held in such unconsolidated entity where such entity provides financing,
liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with the
Company of any of its Affiliates; and (iv) any liability or obligation of the same nature as those described in clauses (i) through
(iii) of this sentence even if of a different name (whether absolute, accrued, contingent or otherwise) that would not be required
to be reflected in the Company or any of its Affiliates’ financial statements.

 

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

 

(rr)     Subsidiary Rights.
The Company has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and
distributions on, all capital securities of each of its Subsidiaries as owned by the Company or any Subsidiary and the unrestricted
right to pledge the Collateral as provided in the Security and Pledge Agreement.

 

(ss)     Shell Company Status.
The Company has never been, and is not presently, an issuer identified as a Shell Company.

 

(tt)     Investor
Relations. Other than as set forth in Schedule 3.1(tt), the Company is not currently a party, nor does it intend to
become a party, to any agreement pursuant to which the Company will receive investor relations services.

 

(uu)
    Reporting Requirements and General Instructions Form
S-3. The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13
or Section 15(d), as applicable, of the Exchange Act and is currently eligible to use Form S-3 pursuant to General
Instructions I.B.1 of Form S-3. The Company has availability on its effective shelf registration statement (No. 333-215834)
under General Instruction I.B.1 of Form S-3 and will file a registration statement on Form S-3 within the time provided in
and as contemplated by Section 4.14.

 

(vv)     Full
Disclosure. No representation or warranty by the Company in this Agreement and no statement contained in the Disclosure Schedules
to this Agreement or any certificate or other document furnished or to be furnished to the Purchasers pursuant to this Agreement
contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained
therein, in light of the circumstances in which they are made, not misleading.

 

(xx)     Legal Compliance.Except
as limited by specific representations and warranties in this Agreement, the Company and its Subsidiaries have complied with all
applicable laws, rules and regulations, except where such non-compliance will not result in a Material Adverse Effect.

 

    	 	15 	 

     

    

 

3.2        Representations
and Warranties of the Purchaser. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as
of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein in which case they
shall be accurate as of such date):

 

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

 

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

 

(c)     Purchaser
Status.  At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, it will be
an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.

 

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

 

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

 

(f)     Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser has not directly
or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, executed any purchases
or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Purchaser
first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the
material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of the Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of the Purchaser’s assets, the representation set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement. Other than to other Persons party to this Agreement, the Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

 

    	 	16 	 

     

    

 

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

 

ARTICLE
IV. 

OTHER
AGREEMENTS OF THE PARTIES 

 

4.1        Transfer
Restrictions.

 

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

 

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

 

THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES. 

 

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

 

    	 	17 	 

     

    

 

4.2        Acknowledgment
of Dilution.  The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding
shares of Common Stock. The Company further acknowledges that its obligations under the Transaction Documents, including, without
limitation, its obligation to issue the Commitment 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 the Purchaser and regardless of the dilutive effect that such issuance may have on the ownership
of the other stockholders of the Company.

 

4.3        Furnishing
of Information; Public Information.

 

(a)       For
as long as the Notes are outstanding, the Company covenants to maintain the registration of the Common Stock under Section 12(b)
or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period)
all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then
subject to the reporting requirements of the Exchange Act.

 

(b)       At
any time during the period commencing from the six (6)-month anniversary of the date hereof and ending at such time that all of
the Securities have been sold or 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 the 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 Subscription Amount of the Purchaser’s Securities 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 Purchaser
to transfer the Commitment Shares pursuant to Rule 144.  The payments to which a Purchaser shall be entitled pursuant to this
Section 4.3(b) are referred to herein as “Public Information Failure Payments.”  Public Information Failure Payments
shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments
are incurred and (ii) the fifth (5th) 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. 

 

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

 

4.5      Intentionally
Omitted.

 

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

 

    	 	18 	 

     

    

 

4.7       Material
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 of its subsidiaries, nor any other
Person acting on its behalf, will provide the Purchaser or its agents or counsel with any information that the Company believes
constitutes material non-public information (“MNPI”), unless prior thereto such information is disclosed
to the public, or the Purchaser shall have entered into a written agreement with the Company
regarding the confidentiality and use of such information. The Company understands and confirms that the Purchaser shall be relying
on the foregoing covenant in effecting transactions in securities of the Company. If the Company or any of their respective officers,
directors, employees or agents, provides any Purchaser with MNPI relating to the Company or any of its Subsidiaries, the Company
shall, on or prior to the next business day (“Required Disclosure Date”), publicly disclose such MNPI on a Current
Report on Form 8-K or otherwise (each, a “Disclosure”). In the event that the Company fails to effect such Disclosure
on or prior to the Required Disclosure Date and such Purchaser shall have possessed MNPI for at least two (2) consecutive Trading
Days (each, a “Disclosure Failure”), then, as partial relief for the damages to such Purchaser by reason of
any such delay in, or reduction of, its ability to buy or sell shares of common stock after such Required Disclosure Date (which
remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to such Purchaser an
amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of the Purchaser’s Securities on the day
of the Disclosure Failure and on every thirtieth (30th) day (pro-rated for periods totaling less than thirty days) thereafter until
the date such Disclosure Failure is cured. The payments to which a Purchaser shall be entitled pursuant to this Section 4.7 are
referred to herein as “MNPI Disclosure Payments.” MNPI Disclosure Payments shall be paid on the earlier of (i)
the last day of the calendar month during which such MNPI Disclosure Payments are incurred and (ii) the fifth (5th) Business Day
after the event or failure giving rise to the MNPI Disclosure 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.

 

4.8       Use
of Proceeds. The Company shall use the net proceeds as disclosed to the Purchasers in writing prior to the Closing by the Company.

 

4.9     Certain
Transactions. The Purchaser covenants and agrees that neither it, nor any Affiliate acting on its behalf or pursuant to any
understanding with it will execute any Short Sales of the Common Stock or (ii) hedging transaction,
which establishes a net short position with respect to the Company’s Common Stock) during the period commencing with
the execution of this Agreement and ending on the earlier of the Maturity Date (as defined in the Notes) of the Notes or
the full repayment of the Notes; provided, that this provision shall not operate to restrict a Purchaser’s trading under
any prior securities purchase agreement containing contractual rights that explicitly protects such trading in respect of the
previously issued securities.  

 

4.10
       Securities Laws Disclosure; Publicity. The Company shall (a) as soon as
reasonably practicable following the execution hereof, issue a press release disclosing the material terms of the transactions
contemplated hereby, and (b) by 9:00 a.m. (New York City time) on the Trading Day immediately following the date hereof file a
Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission. From and after the issuance
of such press release, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public information
delivered to any of the Purchaser by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees
or agents in connection with the transactions contemplated by the Transaction Documents. The Company and the Purchaser shall consult
with each other in issuing any other public disclosure with respect to the transactions contemplated hereby, and neither the Company
nor the Purchaser shall issue any such public disclosure nor otherwise make any such public statement without the prior consent
of the Company, with respect to any press release of the Purchaser, or without the prior consent of the Purchaser, with respect
to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is
required by law or rules of the principal Trading Market, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose
the name of the Purchaser, or include the name of the Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of the Purchaser, except: (a) as required by federal securities law in connection with
any registration statement contemplated by this Agreement and (b) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchaser with prior notice of such disclosure permitted under this clause
(b).

 

    	 	19 	 

     

    

 

4.11      Form
D. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof, promptly upon request of the Purchaser.

 

4.12.     Variable
Rate Transactions. So long as any Securities remain outstanding, the Company and each Subsidiary shall be prohibited from
effecting or entering into an agreement to effect any Variable Rate Transactions. “Variable Rate Transaction”
means a transaction in which the Company or any Subsidiary (i) issues or sells any Common Stock Equivalents either (A) at a conversion,
exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares
of Common Stock at any time after the initial issuance of such Common Stock Equivalents, or (B) with a conversion, exercise or
exchange price that is subject to being reset at some future date after the initial issuance of such Common Stock Equivalents
or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the
market for the Common Stock, other than pursuant to a customary “weighted average” anti-dilution provision or (ii)
enters into any agreement (including, without limitation, an equity line of credit or an “at-the-market” offering)
whereby the Company or any Subsidiary may sell securities at a future determined price (other than standard and customary “preemptive”
or “participation” rights). Each Purchaser shall be entitled to obtain injunctive relief against the Company and its
Subsidiaries to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

 

4.13     FAST
Compliance. While any Securities remain outstanding, the Company shall maintain a transfer agent that participates in the DTC
Fast Automated Securities Transfer Program.

 

4.14    Form S-3.The
Company shall use its best efforts to file a registration statement on Form S-3 covering the public sale of the Commitment Shares
within fourteen (14) days after the Commission has declared the registration statement currently on file therewith (File No. 333-226301)
effective.

 

4.15    Legal Opinion.Within
five days after the Closing Date, the Company’s counsel shall deliver to each Purchaser a legal opinion containing the matters
covered by Exhibit A and reasonably acceptable to the Agent.

 

ARTICLE
V. 

MISCELLANEOUS

 

5.1     Termination.
This Agreement may be terminated by the Purchaser, as to the Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchaser, by written notice to the other parties, if the Closing
has not been consummated on or before August 22, 2018; provided, however, that such termination will not affect the right of any
party to sue for any breach by any other party (or parties).

 

5.2     Fees
and Expenses.  The Company has agreed to bear all fees, disbursements, and expenses in connection with the transactions
contemplated herein, including, without limitation, the Company’s legal and accounting fees and disbursements, the costs
incident to the preparation and UCC fees. In addition, the Company will reimburse the Purchaser for its reasonable out-of-pocket
expenses, including legal fees and disbursements of its counsel in connection with the purchase and sale of the Securities contemplated
hereby; provided that such reimbursement obligation shall not exceed $10,000. The Agent may withhold $10,000 from its Subscription
Amount. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing
of any instruction letter delivered by the Company, stamp taxes and other taxes and duties levied in connection with the delivery
of any Securities to the Purchasers.

 

    	 	20 	 

     

    

 

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

 

5.4     Notices.
Any and all notices or other communications or deliveries to be provided by the Purchaser hereunder, shall be in writing and delivered
personally, by email or facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company at 201
Shipyard Way, Newport Beach, CA 92663, or such other address, facsimile number, or email address as the Company may specify for
such purposes by notice to the Purchaser delivered in accordance with this Section 5.4. Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by email or facsimile, or
sent by a nationally recognized overnight courier service addressed to each Purchaser at the email address, facsimile number,
or address of the Purchaser appearing on the books of the Company, or if no such email address, facsimile number, or address appears
on the books of the Company, at the principal place of business of such Purchaser. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest (i) the date of transmission, if such notice or communication is
delivered via facsimile or email at the facsimile number or email address set forth on the signature pages attached hereto prior
to 12:00 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile or email at the facsimile number or email address set forth on the signature pages attached hereto
on a day that is not a Trading Day or later than 12:00 p.m. (New York City time) on any Trading Day, (iii) the second Trading
Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt
by the party to whom such notice is required to be given.

 

5.5     Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and Purchasers holding at least 50.1% in interest of the Notes then outstanding or,
in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment,
modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately
impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default
or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately,
materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations
of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in
accordance with accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.

 

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

 

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

 

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

 

    	 	21 	 

     

    

 

5.9     Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence
an action, suit or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the
Company under Section 4.9, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.

 

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

 

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

 

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

 

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

 

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

 

    	 	22 	 

     

    

 

5.15       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 the Purchaser in order to enforce
any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction
Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments
in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”),
and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated
with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such
Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents
is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract
rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof
forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the
Maximum Rate is paid by the Company to the Purchaser with respect to indebtedness evidenced by the Transaction Documents, such
excess shall be applied by the Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the Company,
the manner of handling such excess to be at the Purchaser’s election.

 

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

 

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

 

5.18     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.

 

[Signature
Pages Follow]

 

    	 	23 	 

     

    

 

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

 

	
        DPW HOLDINGS, INC.

         

         
	 	Address for Notice:
	
         

        By:
	 	 	
        201 Shipyard Way

        Newport CA 92663

	 	
        Name: Milton C. Ault IIII

        Title: Chief Executive Officer
	 	
        Attention: Milton C. Ault IIII

        E-Mail:Todd@DPWHoldings.com

         

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

 

	 	 
	SICHENZIA ROSS FERENCE KESNER LLP

 

 

	 	
        1185 Avenue of the Americas

        New York, NY 10036

        Attention: Marc J. Ross, Esq.

        e-mail: mross@srfkllp.com

  

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK 

SIGNATURE
PAGE FOR PURCHASER FOLLOWS] 

 

    	 	24 	 

     

    

 

[PURCHASER
SIGNATURE PAGES TO DPW HOLDINGS, INC. SECURITIES PURCHASE AGREEMENT] 

 

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

 

Name of Purchaser: 

 

Signature of Authorized
Signatory of Purchaser:  ____________________________________

 

Name of Authorized
Signatory:                                 ____________________________________

Title of Authorized
Signatory:                                   ____________________________________

Email Address of
Authorized Signatory:                              ____________________________________

Facsimile Number
of Authorized Signatory:                        ____________________________________

 

Address for Notice
to Purchaser: 

 

 

 

Subscription Amount:
$                              

 

 

EIN Number: _______________________

 

    	 	25 	 

     

    

 

SCHEDULE OF PURCHASERS

 

	(1)	(2)	(3)	(4)
	Purchaser	
        Principal Amount of

        Note
	Subscription 

Amount	Commitment 

Shares
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

 

26

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