Document:

Exhibit 4.2

 

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

 

Original
Issue Date: ______________

 

Purchase
Amount: $_________

Principal
Amount: $_________

 

 

8%
Original Issue Discount CONVERTIBLE NOTE

DUE
___________, 2015

 

THIS
8% ORIGINAL ISSUE DISCOUNT CONVERTIBLE NOTE is one of a series of duly authorized and validly issued 8% Original Issue Discount
Convertible Notes of Nxt-ID, Inc. (the “Company”), having its principal place of business at 288 Christian
St, Hanger C, 2nd Fl, Oxford CT 06478, designated as its 8% Original Issue Discount Convertible Note due _______, 2015
(the “Note” and, collectively with the other Notes of such series, the “Notes”).

 

FOR
VALUE RECEIVED, the Company promises to pay to ____________ or its registered assigns (the “Holder”), or shall
have paid pursuant to the terms hereunder, the principal sum of $_________ on __________, 2015 (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 aggregate unconverted and 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 and (b) the following terms shall
have the following meanings:

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

    	 

    	 

    

  

“Alternative
Conversion Price” means 85% of the lowest closing price of the Common Stock in the twenty (20) Trading Days prior to
the date of issuance.

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary 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.

 

“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).

 

“Buy-In”
shall have the meaning set forth in Section 4(c)(v).

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise)
of in excess of 33% of the voting securities of the Company (other than by means of conversion or exercise of the Notes and the
Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges
into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately
prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction,
(c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company
immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after
the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board
of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original
Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board
of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the
execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events
set forth in clauses (a) through (d) above.

 

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“Company”
shall have the meaning set forth in the preamble hereto.

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Price” shall have the meaning set forth in Section 4(b).

 

“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the
terms hereof.

 

“DTC”
means the Depository Trust Company.

 

“DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer Program.

 

“DWAC
Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements,
(b) the Company has been approved (without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved
as an agent in the DTC/FAST Program, and (d) the Transfer Agent does not have a policy prohibiting or limiting delivery of the
Conversion Shares via Deposit/Withdrawal at Custodian.

 

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“Equity
Conditions” means each of the following conditions: (a) the Company shall have duly honored all conversions and redemptions
scheduled to occur or occurring, including conversions pursuant to one or more Notices of Conversion of the Holder, if any, (b)
the Company shall have paid all liquidated damages and other amounts owing to the Holder in respect of this Note, (c) on each
day during the Equity Conditions Measuring Period, either (i) there is an effective registration statement pursuant to which the
Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to the
Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable
future) or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents (and shares issuable in lieu of cash
payments of interest) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions as determined by the counsel
to the Company as set forth in a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the
Holder, (d) on each day during the Equity Conditions Measuring Period, the Common Stock is trading on a Trading Market and all
of the shares of Common Stock issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading
Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted
for the foreseeable future), (e) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common
Stock for the issuance of all of the shares of Common Stock then issuable pursuant to the Transaction Documents, (f) on each day
during the Equity Conditions Measuring Period, there is no existing Event of Default and no existing event which, with the passage
of time or the giving of notice, would constitute an Event of Default, (g) the issuance of the shares of Common Stock in question
to the Holder would not violate the limitations set forth in Section 4(d) herein, (h) on each day during the Equity Conditions
Measuring Period, there has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control
Transaction that has not been consummated, (i) the applicable Holder is not in possession of any information provided by the Company
that constitutes, or may constitute, material non-public information, (j) the Company has timely filed (or obtained extensions
in respect thereof and filed within the applicable grace period) all reports other than Current Reports on Form 8-K required to
be filed by the Company after the date hereof pursuant to the Exchange Act, (k) on any date that the Company desires to make a
payment of interest and/or principal, the average daily dollar volume of the Company’s Common Stock for the previous twenty
(20) Trading Days must be greater than $50,000, and (l) on each day during the Equity Conditions Measuring Period, the Company’s
shares of Common Stock must be DWAC Eligible and not subject to a “DTC chill”.

 

"Equity
Conditions Measuring Period" means each day during the period beginning twenty (20) Trading Days prior to the applicable
date of determination and ending on and including the applicable date of determination or, if applicable, such shorter period
beginning on the Original Issue Date and ending on and including the applicable date of determination.

 

“Event
of Default” shall have the meaning set forth in Section 6(a).

 

“Excess
Shares” shall have the meaning set forth in Section 4(d).

 

“Extension
Period” Reserved.

 

“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“Holder”
shall have the meaning set forth in the preamble hereto.

 

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

 

“Maturity
Date” shall have the meaning set forth in the preamble hereto.

 

“New
York Courts” shall have the meaning set forth in Section 7(d).

 

“Note”
shall have the meaning set forth in the preamble hereto.

 

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

 

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

 

“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.

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of July 27, 2015 between the Company and the original Holder,
as amended, modified or supplemented from time to time in accordance with its terms.

 

“Registered
Offering” means any underwritten public offering of at least $1,000,000 of securities of the Company pursuant to a registration
statement on Form S-1 or Form S-3. 

 

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

 

“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).

 

“Significant
Subsidiary” means “significant subsidiary,” as such term is defined in Rule 1-02(w) of Regulation S-X.

 

“Successor
Entity” shall have the meaning set forth in Section 5(e).

 

Section
2.        Interest.

 

a)      Payment
of Interest in Cash or Kind. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Note at the rate of 8% per annum. All interest payments hereunder will be payable in cash, or subject
to the Equity Conditions being satisfied, in Common Stock or a combination of cash and Common Stock in the Holder’s discretion.
Accrued and unpaid interest shall be due and payable on each Conversion Date and on the Maturity Date, or as otherwise set forth
herein.

 

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b)      Interest
Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 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 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)      Prepayment.
At any time upon three (3) days written notice to the Holder, the Company may prepay any portion of the principal amount of the
Note and any accrued and unpaid interest. 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 the Note and interest multiplied
by 109% if such prepayment is made within sixty (60) days after the Closing Date; thereafter, 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 the Note and interest multiplied by 114%. The Holder may continue to convert the Note from the date notice
of the prepayment is given until the date of the prepayment.

 

Section
3.        Registration of Transfers and Exchanges.

 

a)      Different
Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes 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 set forth
in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and 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.

 

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Section
4.         Conversion.

 

a)      Voluntary
Conversion. From the date hereof until this Note is no longer outstanding, this Note shall be convertible, in whole or in
part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations
set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion,
the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein
the principal amount of this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion
Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such
Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder,
the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note,
plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the
outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain
a Conversion Schedule showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an
objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any
dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The
Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph,
following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the
amount stated on the face hereof.

 

b)      Conversion
Price. The conversion price in effect on any Conversion Date shall be equal to $_____, subject to adjustment as provided herein
(the “Conversion Price”). Notwithstanding anything herein to the contrary, at any time after the occurrence
of any Event of Default the Holder may require the Company to, at such Holder’s option and otherwise in accordance with
the provisions for conversion herein, convert all or any part of this Note into Common Stock at the Alternative Conversion Price.
All such foregoing determinations will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction that proportionately decreases or increases the Common Stock during such measuring period. Nothing herein
shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof and the
Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from
seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

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c)       Mechanics
of Conversion.

 

i.        Conversion
Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder
shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted and
any accrued and unpaid interest to be converted by (y) the Conversion Price.

 

ii.        Delivery
of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share
Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or
certificates representing the Conversion Shares which, on or after the date on which such Conversion Shares are eligible to
be sold under Rule 144 without the need for current public information and the Company has received an opinion of counsel to
such effect reasonably acceptable to the Company (which opinion the Company will be responsible for obtaining) shall be free
of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement)
representing the number of Conversion Shares being acquired upon the conversion of this Note, and (B) a bank check in the
amount of accrued and unpaid interest to be paid in cash (if the Company has elected or is required to pay any accrued
interest in cash). All certificate or certificates required to be delivered by the Company under this Section 4(c) shall be
delivered electronically through DTC or another established clearing corporation performing similar functions. If the
Conversion Date is prior to the date on which such Conversion Shares are eligible to be sold under Rule 144 without the need
for current public information the Conversion Shares shall bear a restrictive legend in the following form, as
appropriate:

 

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

 

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Notwithstanding
the foregoing, commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public
information requirements, the Company, upon request of the Holder, shall obtain a legal opinion to allow for such sales under
Rule 144.

 

iii.      Failure
to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to
or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to
the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event
the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return
to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Notice of Conversion.

 

iv.       Obligation
Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion
of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the
Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law
by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery
shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder
of this Note shall elect to convert any or all of the outstanding principal or interest amount hereof, the Company may not refuse
conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation
of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining
conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit
of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which
bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which
shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion
Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder
such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading Day after such Share Delivery Date
until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to
pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Company’s failure to deliver Conversion
Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of
any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable
law.

 

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v.       Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder,
if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant
to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open
market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion
relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in
addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total
purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate
number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual
sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions)
and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount
of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares
of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii).
For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence,
the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.

 

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vi.      Reservation
of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to 200% of the Required Minimum
(as defined in the Purchase Agreement) for the sole purpose of issuance upon conversion of this Note and payment of interest on
this Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other
than the Holder (and the other holders of the Notes), not less than such aggregate number of shares of the Common Stock as shall
(subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and
restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Note and payment of interest hereunder.
The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly
issued, fully paid and nonassessable.

 

vii.      Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at
its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by
the Conversion Price or round up to the next whole share.

 

viii.     Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without
charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this
Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of
any Notice of Conversion.

 

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d)       Holder’s
Conversion Limitations. The Company shall not effect any conversion of principal and/or interest of this Note, and a Holder
shall not have the right to convert any principal and/or interest of this Note, to the extent that after giving effect to the
conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates (as defined
in the Purchase Agreement), and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates)
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of
Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the
number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this
Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained
herein (including, without limitation, any other Notes or warrants of the Company) beneficially owned by the Holder or any of
its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. In addition,
a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(d), in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of
the following: (i) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (ii)
a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s
transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the
Company shall within two (2) Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Note, by the Holder or its Affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. In the event that the issuance of shares of Common Stock to the Holder
upon conversion of this Note results in the Holder and its Affiliates being deemed to beneficially own, in the aggregate, more
than the Beneficial Ownership Limitation (as determined under Section 13(d) of the Exchange Act), the number of shares of Common
Stock so issued by which the Holder's and its Affiliates’ aggregate beneficial ownership exceeds the Beneficial Ownership
Limitation (the "Excess Shares") shall be deemed null and void and shall be cancelled ab initio, and the Holder
shall not have the power to vote or to transfer the Excess Shares. The “Beneficial Ownership Limitation” shall
be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of
Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon delivery of a written notice to the Company,
may from time to time increase (with such increase not effective until the 61st day after delivery of such notice) or decrease
the Beneficial Ownership Limitation provision to any other percentage not in excess of 9.99%; provided that (i) any such increase
of the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company
and (ii) any such increase or decrease will apply only to the Holder and its Affiliates and not to any other holder of Notes that
is not an Affiliate of the Holder. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes
or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph
shall apply to a successor holder of this Note.

 

    	12

    	 

    

 

Section
5.         Certain Adjustments.

 

		a)	Stock
                                         Dividends and Stock Splits. If the Company, at any time while this Note is outstanding:
                                         (i) pays a stock dividend or otherwise makes a distribution or distributions payable
                                         in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which,
                                         for avoidance of doubt, shall not include any shares of Common Stock issued by the Company
                                         upon conversion of, or payment of interest on, the Notes), (ii) subdivides outstanding
                                         shares of Common Stock into a larger number of shares, (iii) combines (including by way
                                         of a reverse stock split) outstanding shares of Common Stock into a smaller number of
                                         shares or (iv) issues, in the event of a reclassification of shares of the Common Stock,
                                         any shares of capital stock of the Company, then the Conversion Price shall be multiplied
                                         by a fraction of which the numerator shall be the number of shares of Common Stock (excluding
                                         any treasury shares of the Company) outstanding immediately before such event, and of
                                         which the denominator shall be the number of shares of Common Stock outstanding immediately
                                         after such event. Any adjustment made pursuant to this Section shall become effective
                                         immediately after the record date for the determination of stockholders entitled to receive
                                         such dividend or distribution and shall become effective immediately after the effective
                                         date in the case of a subdivision, combination or reclassification.
	 	 	 
		b)	Intentionally
                                         Omitted.
	 	 	 
		c)	Subsequent
                                         Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above,
                                         if at any time the Company grants, issues or sells any Common Stock Equivalents or rights
                                         to purchase stock, warrants, securities or other property pro rata to the record holders
                                         of any class of shares of Common Stock (the “Purchase Rights”), then
                                         the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights,
                                         the aggregate Purchase Rights which the Holder could have acquired if the Holder had
                                         held the number of shares of Common Stock acquirable upon complete conversion of this
                                         Note (without regard to any limitations on exercise hereof, including without limitation,
                                         the Beneficial Ownership Limitation) immediately before the date on which a record is
                                         taken for the grant, issuance or sale of such Purchase Rights, or, if no such record
                                         is taken, the date as of which the record holders of shares of Common Stock are to be
                                         determined for the grant, issue or sale of such Purchase Rights (provided, however, to
                                         the extent that the Holder’s right to participate in any such Purchase Right would
                                         result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall
                                         not be entitled to participate in such Purchase Right to such extent (or beneficial ownership
                                         of such shares of Common Stock as a result of such Purchase Right to such extent) and
                                         such Purchase Right to such extent shall be held in abeyance for the Holder until such
                                         time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
                                         Ownership Limitation).

 

    	13

    	 

    

 

		d)	Intentionally
                                         Omitted.

 

		e)	Fundamental
                                         Transaction. If, at any time while this Note is outstanding, (i) the Company, directly
                                         or indirectly, in one or more related transactions effects any merger or consolidation
                                         of the Company with or into another Person, (ii) the Company, directly or indirectly,
                                         effects any sale, lease, license, assignment, transfer, conveyance or other disposition
                                         of all or substantially all of its assets in one or a series of related transactions,
                                         (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
                                         by the Company or another Person) is completed pursuant to which holders of Common Stock
                                         are permitted to sell, tender or exchange their shares for other securities, cash or
                                         property and has been accepted by the holders of 50% or more of the outstanding Common
                                         Stock, (iv) the Company, directly or indirectly, in one or more related transactions
                                         effects any reclassification, reorganization or recapitalization of the Common Stock
                                         or any compulsory share exchange pursuant to which the Common Stock is effectively converted
                                         into or exchanged for other securities, cash or property, (v) the Company, directly or
                                         indirectly, in one or more related transactions consummates a stock or share purchase
                                         agreement or other business combination (including, without limitation, a reorganization,
                                         recapitalization, spin-off or scheme of arrangement) with another Person whereby such
                                         other Person acquires more than 50% of the outstanding shares of Common Stock (not including
                                         any shares of Common Stock held by the other Person or other Persons making or party
                                         to, or associated or affiliated with the other Persons making or party to, such stock
                                         or share purchase agreement or other business combination) (each a “Fundamental
                                         Transaction”), then, upon any subsequent conversion of this Note, the Holder
                                         shall have the right to receive, for each Conversion Share that would have been issuable
                                         upon such conversion immediately prior to the occurrence of such Fundamental Transaction
                                         (without regard to any limitation in Section 4(d) on the conversion of this Note), the
                                         number of shares of Common Stock of the successor or acquiring corporation or of the
                                         Company, if it is the surviving corporation, and any additional consideration (the “Alternate
                                         Consideration”) receivable as a result of such Fundamental Transaction by a
                                         holder of the number of shares of Common Stock for which this Note is convertible immediately
                                         prior to such Fundamental Transaction (without regard to any limitation in Section 4(d)
                                         on the conversion of this Note). For purposes of any such conversion, the determination
                                         of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration
                                         based on the amount of Alternate Consideration issuable in respect of one (1) share of
                                         Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion
                                         Price among the Alternate Consideration in a reasonable manner reflecting the relative
                                         value of any different components of the Alternate Consideration. If holders of Common
                                         Stock are given any choice as to the securities, cash or property to be received in a
                                         Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
                                         Consideration it receives upon any conversion of this Note following such Fundamental
                                         Transaction. The Company shall cause any successor entity in a Fundamental Transaction
                                         in which the Company is not the survivor (the “Successor Entity”)
                                         to assume in writing all of the obligations of the Company under this Note and the other
                                         Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions
                                         of this Section 5(e) pursuant to written agreements in form and substance reasonably
                                         satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior
                                         to such Fundamental Transaction and shall, at the option of the holder of this Note,
                                         deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced
                                         by a written instrument substantially similar in form and substance to this Note which
                                         is convertible for a corresponding number of shares of capital stock of such Successor
                                         Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and
                                         receivable upon conversion of this Note (without regard to any limitations on the conversion
                                         of this Note) prior to such Fundamental Transaction, and with a conversion price which
                                         applies the conversion price hereunder to such shares of capital stock (but taking into
                                         account the relative value of the shares of Common Stock pursuant to such Fundamental
                                         Transaction and the value of such shares of capital stock, such number of shares of capital
                                         stock and such conversion price being for the purpose of protecting the economic value
                                         of this Note immediately prior to the consummation of such Fundamental Transaction),
                                         and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence
                                         of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
                                         for (so that from and after the date of such Fundamental Transaction, the provisions
                                         of this Note and the other Transaction Documents referring to the “Company”
                                         shall refer instead to the Successor Entity), and may exercise every right and power
                                         of the Company and shall assume all of the obligations of the Company under this Note
                                         and the other Transaction Documents with the same effect as if such Successor Entity
                                         had been named as the Company herein.

 

    	14

    	 

    

 

		f)	Calculations.
                                         All calculations under this Section 5 shall be made to the nearest cent or the nearest
                                         1/100th of a share, as the case may be. For purposes of this Section 5, the number of
                                         shares of Common Stock deemed to be issued and outstanding as of a given date shall be
                                         the sum of the number of shares of Common Stock (excluding any treasury shares of the
                                         Company) issued and outstanding.

 

		g)	Notice
                                         to the Holder.

 

i.        Adjustment
to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall
promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.

 

ii.       Notice
to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)
the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any
sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address
as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled
to convert this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.

 

    	15

    	 

    

 

Section
6.        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 any Note or (B) interest, liquidated damages and other amounts owing to
a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or
by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above,
is not cured within three (3) Trading Days;

 

ii.       the
Company shall fail to observe or perform any other material covenant or material agreement contained in the Notes (other than
a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed
in clause (xi) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) 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;

 

iii.      a
default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which
the Company or any Subsidiary is obligated (and not covered by clause (vi) below);

 

iv.      any
representation or warranty made in this Note, any other Transaction Document, any written statement pursuant hereto or thereto
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;

 

    	16

    	 

    

 

v.        the
Company or any Significant Subsidiary 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 $100,000, 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 Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to
resume listing or quotation for trading thereon within five (5) Trading Days or the transfer of shares of Common Stock
through the Depository Trust Company System is no longer available or “chilled”;

 

viii.    the
Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of
all or in excess of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute
a Change of Control Transaction);

 

ix.      the
Company shall fail for any reason to deliver certificates to a Holder on or prior to the third (3rd) Trading Day after a Conversion
Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement,
of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof;

 

x.       the
Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it is not
in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);

 

xi.      if
the Company or any Significant Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian
or liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make
a general assignment for the benefit of creditors, (iv) be adjudicated a 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, (v) 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 (vi) take or permit to be taken any action in furtherance
of or for the purpose of effecting any of the foregoing;

 

    	17

    	 

    

 

xii.     if
any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Significant
Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company
or any Significant Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Company or any Significant 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 sixty (60) days;

 

xiii.    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 $100,000
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;

 

xiv.    the
Company shall fail to maintain sufficient reserved shares of Common Stock pursuant to Section 4(c)(vi) of this Note or Section
4.10 of the Purchase Agreement; or

 

xv.     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 $100,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of forty-five (45) calendar days;

 

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. 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 2% per month (24% per annum) or the maximum rate permitted under applicable law. Upon the payment in full of all
amounts due to the Holder following an Event of Default, 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, 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 6(b). No such rescission or
annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

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Section
7.        Miscellaneous.

 

a)      Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation,
any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service, addressed to the Company, at the address set forth above, or such other facsimile number or 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 facsimile,
or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the
Holder appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at
the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto 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 at the facsimile number 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 (2nd) 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. This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth herein.

 

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.

 

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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)      Amendment;
Waiver. The written consent of the Holder and each other holder of a Note shall be required for any change or amendment or
waiver of any provision to the Notes.

 

f)       Failure
or Indulgence not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege.

 

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.

 

    	20

    	 

    

 

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, conversion 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)       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.

 

j)       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.

 

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)

 

    	21

    	 

    

 

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.

 

	 	Nxt-ID,
    INC.
	 	 	 
	 	By:	 
	 	 	Name: 
	 	 	Title: 
	 	 	 
	 	Email
    for delivery of Notices:

 

    	 

    	 

    

 

ANNEX
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the 8% Original Issue Discount Convertible Note due ____________, 2015 of
Nxt-ID, Inc. (the “Company”), into shares of common stock of the Company (the “Common Stock”)
according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged
to the holder for any conversion, except for such transfer taxes, if any.

 

After
giving effect to the conversion provided for in this Notice of Conversion, the undersigned (together with its Affiliates) will
beneficially own no more than ___________________ shares of Common Stock.

 

The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.

 

Conversion
calculations:

 

	 	Date
    to Effect Conversion:
	 	 
	 	Principal
    Amount of Note to be Converted:
	 	 
	 	Payment
    of Interest in Common Stock __ yes __ no
	 	If
    yes, $_____ of Interest Accrued on Account of Conversion at Issue.
	 	 
	 	Number
    of shares of Common Stock to be issued:
	 	 
	 	 
	 	Signature:
	 	 
	 	Name:
	 	 
	 	Delivery
    Instructions:

 

    	 

    	 

    

 

Schedule
1

 

CONVERSION
SCHEDULE

 

This
8% Original Issue Discount Convertible Note due on ____________, 2015 in the original principal amount of $__________ is issued
by Nxt-ID, Inc. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.

 

Dated:

 

	 

        Date
        of Conversion

        (or
        for first entry, Original Issue Date)
	 

        Amount
        of 

Conversion
	 Aggregate
Principal Amount Remaining Subsequent to Conversion

        (or
        original Principal Amount)
	 

        Company
        AttestExhibit 10.2

 

WARRANT PURCHASE AGREEMENT

 

This
Warrant Purchase Agreement (this “Agreement”) is dated as of July 30, 2015, between Nxt-ID, Inc.
(the “Company”) and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

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

 

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and 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 Warrants (as defined herein), and (b) the following
terms have the meanings set forth in this Section 1.1:

 

“Agreement”
shall have the meaning ascribed to such term in the preamble hereto.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Closing
Date” means the Trading Day that the Company closes the public offering of shares of common stock pursuant to
the prospectus supplement filed with the Commission on July 30, 2015, and that certain securities purchase agreement, executed
as of even date herewith, and all conditions precedent to (i) the Purchasers’ obligations
to pay the Subscription Amount as to such Closing and (ii) the Company’s obligations to deliver the Securities as to such
Closing, in each case, have been satisfied or waived.

 

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

 

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

 

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

 

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

 

    	 

    	 

    

 

“Company”
shall have the meaning ascribed to such term in the preamble hereto.

 

“Company
Counsel” means Robinson Brog Leinwand Greene Genovese & Gluck P.C.

   

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

 

“DTC”
shall have the meaning ascribed to such term in Section 4.16. 

 

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

 

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

 

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

 

“Exempt
Issuance” means the issuance of (i) securities issued under the Company’s equity incentive plan existing
on the date of this Agreement and any amendments thereto approved by the Board of Directors, including securities issuable upon
conversion or exercise of such securities, (ii) securities issued for consideration other than cash pursuant to a strategic arrangement,
joint venture, merger, consolidation, acquisition, or similar business combination approved by the Board of Directors but shall
not include a transaction in which the Company is issuing securities for the purpose of raising capital or to an entity whose primary
business is investing in securities and (iii) securities issued upon the exercise or exchange of or conversion of any Securities
issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement
to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities.

 

“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(ii).

 

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

 

“Indebtedness”
means (x) 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), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s 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 (z) 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(o). 

 

“Irrevocable
Transfer Agent Instructions” shall have the meaning ascribed to such term in Section 4.16. 

 

    	2

    	 

    

 

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

 

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

 

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

 

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

 

“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17. 

 

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

 

“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. 

 
  

“Proceeding”
means an action, claim, suit, notice of violation, 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). 

 

“Purchaser”
shall have the meaning ascribed to such term in the preamble hereto.

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.9. 

 

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

 

“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Warrant Shares issuable upon exercise in full of all Warrants,
ignoring any conversion or exercise limits set forth therein.

 

“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.

 

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

 

“Securities”
means the Warrants and the Warrant Shares. 

 

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

 

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

 

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

 

    	3

    	 

    

 

“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. 

 

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

 

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

  

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

 

“Transfer
Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette
Place Woodmere, NY 11598, and any successor transfer agent of the Company.

 

“Warrants” means, collectively, the
Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.3(a) hereof, which Warrants
shall be exercisable immediately and have a term of exercise equal to five (5) years, in the form of Exhibit A attached
hereto.

 

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

 

ARTICLE
II. 

PURCHASE
AND SALE 

 

2.1
  Purchase.  The Purchasers will purchase an aggregate of $___________ in Subscription Amount of Warrants,
at a purchase price of $____________ per Warrant.

 

2.2
  Closing.  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 agrees to sell, and each Purchaser,
severally and not jointly, agrees to purchase, such Purchaser’s Closing Subscription Amount as set forth on the signature
page hereto executed by such Purchaser (an aggregate of $____________ in Subscription Amount of Warrants).  At the Closing,
each Purchaser shall deliver to the Company, via wire transfer or a certified check, 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 each Purchaser its respective Warrant, as determined pursuant to Section 2.3(a), and the Company and each 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 the Closing, the Closing shall occur at the offices of the Purchaser’s
counsel or such other location as the parties shall mutually agree.

 

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; and

 

(ii)  a Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock issuable to
such Purchaser, with an exercise price equal to $__________, subject to adjustment therein.

 

    	4

    	 

    

 

(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 such Purchaser; and

 

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

 

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 on the Closing Date of the representations and warranties (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect, which are accurate in all respects) of each Purchaser
contained herein (except for representations and warranties that speak as of a specific date which shall be true and correct as
of such specified date);

 

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

 

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

 

(iv)
the closing of the Company’s public offering of shares of common stock pursuant to the prospectus supplement filed with
the Commission on July 30, 2015, and that certain securities purchase agreement, executed as of even date herewith.

 

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

 

(i)
  the accuracy in all material respects when made and on the Closing Date of the representations and warranties (except for
those representations and warranties that are qualified by materiality or Material Adverse Effect, which are accurate in all respects)
of the Company contained herein (except for representations and warranties that speak as of a specific date which shall be true
and correct as of such specified date);

 

(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 Warrants) and no existing event which, with the passage of time
or the giving of notice, would constitute an Event of Default;

 

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

  

(vi)
  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 such Purchaser, makes it impracticable or inadvisable to purchase the Securities
at the Closing.

 

    	5

    	 

    

 

ARTICLE
III. 

REPRESENTATIONS
AND WARRANTIES 

 

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

 

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

 

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

  

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

 

    	6

    	 

    

 

(d)
  No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the other Transaction
Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated
hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or charter documents; (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is bound or affected; or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities
laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case
of each of clauses (ii) and (iii), such as 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 Section 4.13 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 Warrant Shares for trading thereon
in the time and manner required thereby and (iii) the filing of Form D with the Commission and such filings as are required to
be made under applicable state securities laws (collectively, the “Required Approvals”).

 

(f)
  Issuance of the Securities.  The Securities are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Warrant
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.
The Company will reserve from its duly authorized capital stock a number of shares of Common Stock for issuance of the Warrant
Shares at least equal to 100% of the Required Minimum on the date hereof.

 

(g)
  Capitalization.  The capitalization of the Company is as set forth on Schedule 3.1(g). Except as
set forth on Schedule 3.1(g), the Company has not issued any capital stock since its most recently filed periodic report
under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans,
the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant
to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report
under the Exchange Act. Except as a result of the purchase and sale of the Securities and as set forth in the SEC Reports,
there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  Except
as set forth on Schedule 3.1(g), the issuance and sale of the Securities will not obligate the Company to issue shares of
Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares
of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares of capital stock 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.

 

    	7

    	 

    

 

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

 

(i)
  Material Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited
financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to
the date hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result
in a Material Adverse Effect; (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission;
(iii) the Company has not altered its method of accounting; (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock; and (v) other than as set forth on Schedule 3.1(i),the Company has not issued any equity securities
to any officer, director or Affiliate, except pursuant to existing Company stock option plans.  Except
for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), 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.

 

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

 

    	8

    	 

    

 

(k)
  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.  To the
knowledge of the Company, 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.

 

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

  

(m)
  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.

 

(n)
  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 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.

 

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

 

    	9

    	 

    

 

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

 

(q)
  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 applicable to the Company and 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 provide reasonable assurance 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.

 

(r)
  Certain Fees.  Other than as set forth on Schedule 3.1(r), no brokerage or finder’s fees or
commissions are or will be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.  The
Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction
Documents.

  

(s)
  Private Placement.  Assuming the accuracy of the Purchasers’ 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 Purchasers as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations
of the Trading Market.

 

    	10

    	 

    

 

(t)
  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.

 

(u)
  Registration Rights.  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.

 

(v)
  Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g)
of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the
Commission is contemplating terminating such registration.  Except as set forth in the SEC Reports, the Company has not,
in the 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. 

 

(w)
  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 Purchasers as a result of
the Purchasers 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 Purchasers’ ownership of the Securities.

 

(x)
  Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of
the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public
information.  The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting
transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Purchasers
regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the
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 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.

 

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

  

(z)
  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.

 

    	11

    	 

    

 

(aa)
  Accountants.  The Company’s accounting firm is set forth on Schedule 3.1(bb) of the Disclosure
Schedules.  To the knowledge and belief of the Company, such accounting firm: (i) is a registered public accounting firm
as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the
Company’s Annual Report for the fiscal year ending December 31, 2015. 

 

(bb)
  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.

  

(dd)
  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.

 

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

 

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

 

(gg)
  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.

 

(hh)
  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.

 

(ii) 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.

 

    	12

    	 

    

 

(jj)Acknowledgment Regarding
Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(f) and 4.12 hereof), it is understood and acknowledged by the Company that: (i) the Purchaser has not been asked by
the Company to agree, nor has the Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the
Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified
term; (ii) past or future open market or other transactions by the Purchaser, specifically including, without limitation, Short
Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities; (iii) the Purchaser, and counter-parties
in “derivative” transactions to which the Purchaser is a party, directly or indirectly, may presently have a “short”
position in the Common Stock; and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y) one
or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, including,
without limitation, during the periods that the value of the Warrant Shares deliverable with respect to Securities are being determined,
and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the Company at
and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging
activities do not constitute a breach of any of the Transaction Documents.

 

(kk) 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 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.

 

3.2
  Representations and Warranties of the Purchasers.    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):

 

(a)
  Organization; Authority.  Such Purchaser is an entity duly incorporated or formed, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership,
limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents
and performance by such 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 such Purchaser.  Each
Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance
with the terms hereof, will constitute the valid and legally binding obligation of such 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.  Such 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 such Purchaser’s right to sell the Securities in compliance
with applicable federal and state securities laws).  Such Purchaser is acquiring the Securities hereunder in the ordinary
course of its business.

 

    	13

    	 

    

 

(c)
  Purchaser Status.  At the time such Purchaser was offered the Securities, it was, and as of the date hereof
it is, and on each date on which it exercises any Warrants it will be 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 Such Purchaser.  Such 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.  Such
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.  Such 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,
such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such
Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing
as of the time that such 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 such Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio managers managing other portions of such 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, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability
of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

 

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

 

ARTICLE
IV. 

OTHER
AGREEMENTS OF THE PARTIES 

 

4.1
  Transfer Restrictions.

 

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

 

    	14

    	 

    

 

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

 

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

 

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

 

(c)
  Certificates evidencing the Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b)
hereof): (i) while a registration statement covering the resale of such security is effective under the Securities Act; (ii) following
any sale of such Warrant Shares pursuant to Rule 144; or (iii) if such legend is not required under applicable requirements of
the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company
shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after any of the events described in (i)-(iii)
in the preceding sentence if required by the Transfer Agent to effect the removal of the legend hereunder (with a copy to the applicable
Purchaser and its broker). If all or any portion of a Warrant is exercise at a time when
there is an effective registration statement to cover the resale of the Warrant Shares, or if such Warrant Shares may be sold under
Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission) then such Warrant Shares shall be issued free of all legends.  The
Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c),
it will, no later than two (2) Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate
representing Warrant Shares, as applicable, issued with a restrictive legend (such third (3rd) Trading Day, the “Legend
Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free
from all restrictive and other legends.  Certificates for Warrant Shares subject to legend removal hereunder shall be transmitted
by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust
Company System as directed by such Purchaser.

 

(d)
  In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading Day after the Legend Removal Date until such certificate
is delivered without a legend.  

 

    	15

    	 

    

 

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

 

4.3
  Reporting Status; Public Information.

 

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

 

(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 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”), and during the period that such Public Information
Failure exists the Purchaser has requested that the Company remove any restrictive legend from the Securities which the Company
is unable to do due to such Public Information Failure, then, in addition to such Purchaser’s other available remedies, the
Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or
reduction of its ability to sell the Securities, $1,000 and on every thirtieth (30th) day (prorated for periods totaling
less than thirty (30) days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such
time that such public information is no longer required  for the Purchasers to transfer the Warrant 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 third (3rd)
Business Day after the event or failure giving rise to the Public Information Failure Payments is cured.  In the event
the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments
shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit
such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right
to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief. 

 

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
 Conversion and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants set forth
the totality of the procedures required of the Purchasers in order to exercise the Warrants. Without limiting the preceding sentences,
no ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise form be required in order to exercise the Warrants. No additional legal opinion, other information or
instructions shall be required of the Purchasers to exercise their Warrants. The Company shall honor exercises of the Warrants
and shall deliver the Warrant Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

 

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 any Purchaser is an “Acquiring Person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in
effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company
and the Purchasers.

 

    	16

    	 

    

 

4.7
  Non-Public Information.  Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf, will
provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information,
unless prior thereto such 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 each Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.

 

4.8
  Use of Proceeds.  The Company will use the proceeds from the sale of the Securities for general corporate
purposes.

 

4.9
  Indemnification of Purchasers.   

 

(a)
Subject to the provisions of this Section 4.9, the Company will indemnify and hold each Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding
such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members,
partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from
any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party
may suffer or incur as a result of or relating to (a) any breach by the Company of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is
not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such  Purchaser
Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful
misconduct or malfeasance).  If any action shall be brought against any Purchaser Party in respect of which indemnity
may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall
have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any
Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.  The Company
will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the
extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents.  

 

(b)   The
indemnification required by this Section 4.9 shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or are incurred.

 

    	17

    	 

    

 

(c)   The
indemnity agreement contained herein shall be in addition to (i) any cause of action or similar right of any Purchaser Party against
the Company or others, and (ii) any liabilities the Company may be subject to pursuant to the law.

 

4.10   Reservation
and Listing of Securities.

 

(a)
  The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.

 

(b)
  If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than 100%
of the Required Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s
certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least 100%
of the Required Minimum at such time, as soon as possible and in any event not later than the 60th day after such date.

 

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

 

4.11
  Equal Treatment of Purchasers.  No consideration (including any modification of any Transaction Document)
shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless
the same consideration is also offered to all of the parties to this Agreement. For clarification purposes, this provision constitutes
a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the
Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group
with respect to the purchase, disposition or voting of Securities or otherwise.

 

4.12
  Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any Short Sales,
of any of the Company’s securities during the period commencing with the execution of this Agreement and ending on the later
of (i) the Maturity Date or (ii) the date that the Warrants are no longer outstanding (provided that this provision shall not prohibit
any sales made where a corresponding Notice of Exercise is tendered to the Company and the shares received upon such exercise are
used to close out such sale). 

 

4.13
Securities Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K, including the Transaction
Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the filing of such
Current Report on Form 8-K, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public
information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company and the
Purchaser shall consult with each other in issuing any press releases with respect to the transactions contemplated hereby, and
neither the Company nor the Purchaser shall issue any such press release 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, 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).

 

    	18

    	 

    

 

4.14 Form D; Blue Sky Filings.
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. The Company shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser at the Closing under applicable
securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of the Purchaser.

 

ARTICLE
V. 

MISCELLANEOUS

 

5.1
  Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder
only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the
other parties, if the Closing has not been consummated on or before August 7, 2015; provided, however, that such termination will
not affect the right of any party to sue for any breach by any other party (or parties).

 

5.2   Fees and Expenses. The
Company shall deliver to each Purchaser, prior to the Closing, a completed and executed copy of the Closing Statement, attached
hereto as Annex A. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the
Company and any conversion or exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities to the Purchasers.

 

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

 

5.4
  Notices.  Any and all notices or other communications or deliveries required or permitted to be provided
hereunder shall be in writing and shall be deemed given and effective on the earliest of: (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto at
or prior to 12:00 p.m. (New York City time) on a Trading Day; (ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on
a day that is not a Trading Day or later than 12:00 p.m. (New York City time) on any Trading Day; (iii) the second (2nd) 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.  The address for such notices and communications shall be as
set forth on the signature pages attached hereto.

 

5.5
  Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except
in a written instrument signed by the Company and the Purchasers.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right.

 

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

 

5.7
  Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger).  Any Purchaser may assign any or all of its
rights under this Agreement to any Person to whom such 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 “Purchasers.”

 

    	19

    	 

    

 

5.8
  No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.9.

 

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. Each Purchaser shall be responsible only for its own representations, warranties, agreements and covenants hereunder.

 

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

 

    	20

    	 

    

 

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

 

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

 

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

 

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

 

5.18
  Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under
any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible
in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing
contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be
deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its
rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and
it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.  Each
Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents.

 

    	21

    	 

    

 

5.19
  Liquidated Damages.  The Company’s obligations to pay any partial liquidated damages or other amounts
owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial
liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which
such partial liquidated damages or other amounts are due and payable shall have been canceled.

 

5.20
  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.

 

5.21
  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.

 

5.22
  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] 

 

    	22

    	 

    

 

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

 

	
        

        NXT-ID, Inc.
        

         
	
        Address for Notice:
        

         

         

	
        By:__________________________________________
        

            Name:
        

            Title:
        

         

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

         
	
        Fax: 

         

 

 

 

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK 

SIGNATURE
PAGE FOR PURCHASER FOLLOWS] 

 

    	 

    	 

    

 

[PURCHASER
SIGNATURE PAGES TO WARRANT PURCHASE AGREEMENT]

 

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

 

Name of Purchaser: 

Signature of Authorized
Signatory of 

Purchaser: ____________________________________ 

 

Name of Authorized
Signatory:

____________________________________

 

Title
of Authorized Signatory: ____________________________________

Email Address of Authorized

Signatory: ____________________________________

 

Facsimile Number of
Authorized

Signatory: ____________________________________

 

Address for Notice
to Purchaser: 

 

 

 

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

 

 

 

 

  

Closing Subscription
Amount: 

Number of Warrants: 

 

 

EIN Number: _______________________

 

    	 

    	 

    

 

Annex A 

 

CLOSING STATEMENT

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

 

Exhibit A

Form of Common Stock Purchase Warrant

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