Document:

Exhibit 10.1

 

 

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of January 8, 2018, between Genius Brands International, Inc., a Nevada
corporation (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, for all
purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

 

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Company
Counsel” means Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C., with offices located at 666 3rd Avenue,
New York, New York 10017.

 

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

 

 

 

    	 	1	 

     

    

 

“Effective
Date” means the earliest of the date that (a) a registration statement, if any, covering the resale by the Purchasers
of the Shares and Warrant Shares has been declared effective by the Commission, (b) all of the Shares and Warrant Shares have been
sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with
the current public information required under Rule 144 and without volume or manner-of-sale restrictions, (c) following the one
year anniversary of the Closing Date provided that a holder of Shares or Warrant Shares is not an Affiliate of the Company, or
(d) all of the Shares and 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 Shares and 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(s).

 

“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 as full or partial consideration in connection with a strategic
merger, acquisition, consolidation or purchase of substantially all of the securities or assets of a corporation or other entity,
(ii) the Company’s issuance of securities in connection with strategic license agreements and other partnering arrangements
so long as such issuances are not primarily for the purpose of raising capital, (iii) the Company’s issuance of Common Stock,
grants of options to purchase Common Stock or other types of awards issuable to officers, employees, directors, and consultants
under plans that are approved by a majority of the independent members of the board of directors of the Company, (iv) the Company’s
issuance of securities upon the exercise or exchange of or conversion of any securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the Closing Date on the terms in effect on the Closing Date, (v)
an issuance by the Company of Warrant Shares and (vi) the Company’s issuance of Common Stock or the issuances or grants of
options to purchase Common Stock to consultants and service providers.

 

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

 

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

 

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

 

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

 

“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(n).

 

“Per
Share Purchase Price” equals $3.00, 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.

 

“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.

 

“Placement
Agent” means Chardan Capital Markets, LLC.

 

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

 

 

 

    	 	2	 

     

    

 

“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).

 

“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.

 

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

 

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

 

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

 

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

 

“Securities”
means the Shares, the Warrants and the Warrant Shares.

 

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

 

“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.

 

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

 

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

 

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

 

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

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the New York Stock Exchange, OTCBB, OTCQB or OTCQX (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, New York 11598 and a facsimile number of (646) 536-3179, and any successor transfer agent of the Company.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.12(b).

 

“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a)
hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to five years, in the form of Exhibit
A attached hereto.

 

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

 

 

 

    	 	3	 

     

    

 

ARTICLE II.

PURCHASE AND SALE

 

2.1           
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 the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of $4,000,000 of Shares and Warrants.
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 Shares and a Warrant, as determined pursuant to Section 2.2(a), and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants
and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of Company Counsel or such other location
as the parties shall mutually agree.

 

2.2           
Deliveries.

 

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

 

(i)           
this Agreement duly executed by the Company;

 

(ii)          
a legal opinion of Company Counsel, substantially in the form of Exhibit B attached
hereto; 

 

(iii)         
a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent
to deliver, on an expedited basis, a certificate evidencing a number of Shares equal to such Purchaser’s Subscription Amount
divided by the Per Share Purchase Price, registered in the name of such Purchaser; and

 

(iv)         
a Warrant registered in the name of such Purchaser to purchase up to a number of shares of
Common Stock equal to 100% of such Purchaser’s Shares, with an exercise price equal to $3.00, subject to adjustment therein
(such Warrant certificate may be delivered within three Trading Days of the Closing Date).

 

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

 

(i)           
this Agreement duly executed by such Purchaser; and

 

(ii)           
such Purchaser’s Subscription Amount by wire transfer to the following account:

 

2.3           
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 (or, to the extent representations or warranties are
qualified by materiality or Material Adverse Effect, in all respects) on the Closing Date of the representations and warranties
of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

 

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

 

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

 

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

 

 

 

    	 	4	 

     

    

 

(i)           
the accuracy in all material respects (or, to the extent representations or warranties are
qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations
and warranties of the Company contained herein (unless as of a specific date therein in which case they shall be accurate as of
such date);

 

(ii)          
all obligations, covenants and agreements of the 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 2.2(a) of this Agreement; 

 

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

 

(v)          
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; and

 

(vi)        
The Shares and Warrant Shares shall have been approved for listing on the NASDAQ Capital Market,
subject to notice of issuance.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

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

 

(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 or 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 each of this Agreement and 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.

 

 

    	 	5	 

     

    

 

(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 4.4 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 Shares and
Warrant Shares for trading thereon in the time and manner required thereby, or (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 has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable
pursuant to this Agreement and the Warrants.

 

(g)  
Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g),
which Schedule 3.1(g) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates
of the Company as of the date hereof. Except as set forth on Schedule 3.1(g), the Company has not issued any capital stock
since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options
under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s
employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the
date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except
as a result of the purchase and sale of the Securities or as set forth on Schedule 3.1(g), 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 the capital stock of any Subsidiary, 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 or
capital stock of any Subsidiary. Except as set forth on Schedule 3.1(g), the issuance and sale of the Securities will not
obligate the Company or any Subsidiary 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. There are no outstanding securities or instruments of the Company or any Subsidiary that contain
any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any
stock appreciation rights or “phantom stock” plans or any similar plan or agreement. All of the outstanding shares
of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of
Directors or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s stockholders.

 

 

 

    	 	6	 

     

    

 

(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 Company has never been an issuer subject to Rule 144(i) under the Securities Act.
The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments.

 

(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) the Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any
request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement 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 1 Trading Day prior to the
date that this representation is made.

 

(j)             
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective
properties 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.

 

 

 

    	 	7	 

     

    

 

(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)          
 Environmental Laws.The Company and its Subsidiaries (i) are in compliance with
all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient
air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated
or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required
of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms
and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could
be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

 

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

 

(o)            
Title to Assets. The Company and the Subsidiaries have good and marketable title in
fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material
to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except 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.

 

 

 

    	 	8	 

     

    

 

(p)            
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.

 

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

 

(r)             
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.

 

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

 

(t)             
Certain Fees. No brokerage or finder’s fees or commissions are or will be payable
by the Company or any Subsidiary 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 other than to the Placement Agent. 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.

 

 

 

    	 	9	 

     

    

 

(u)            
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.

 

(v)            
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.

 

(w)          
Registration Rights. Except as set forth on Schedule 3.1(w), 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 Subsidiary.

 

(x)            
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. The Company has not, in the 12 months preceding the date hereof,
received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company
is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.
The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing
corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing
corporation) in connection with such electronic transfer.

 

(y)            
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 articles
of incorporation, as amended (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.

 

(z)            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
press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading.
The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

 

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

 

 

 

    	 	10	 

     

    

 

(bb)        
Solvency. Based on the
consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the
proceeds from the sale of the Securities hereunder: (i) the fair saleable value of the Company’s assets exceeds the amount
that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on
its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(bb)
sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which
the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x)
any liabilities for borrowed money or amounts owed in excess of $150,000 (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
$150,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default
with respect to any Indebtedness.

 

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

 

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

 

(ee)         
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, 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.

 

(ff) Accountants.
The Company’s accounting firm is set forth on Schedule 3.1(ff) 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, 2017.

 

(gg)        
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.

 

 

 

    	 	11	 

     

    

 

(hh)        
 Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges
and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the
Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as
a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in
connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’
purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into this
Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.

 

(ii) 
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this
Agreement or elsewhere herein to the contrary notwithstanding (except for Section 4.14 hereof), it is understood and acknowledged
by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist
from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or other transactions
by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or
after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such
Purchaser is a party, directly or indirectly, may presently have a “short” position in the Common Stock and (iv) each
Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers
may engage in hedging activities 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.

 

(jj)           
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 Placement Agent in connection with the placement of the Securities.

 

(kk)        
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.

 

(ll)           
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”).

 

(mm)       
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.

 

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

 

 

 

    	 	12	 

     

    

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

 

(pp)        
No Disqualification Events.  With respect to the Securities to be offered and
sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of
20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter
(as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each,
an "Issuer Covered Person" and, together, "Issuer Covered Persons") is subject to any of the
"Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a "Disqualification
Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable
care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent
applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided
thereunder.

 

(qq)        
Other Covered Persons. Other than the Placement Agent, the Company is not aware of
any person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation
of purchasers in connection with the sale of the Securities.

 

(rr)          
Notice of Disqualification Events. The Company will notify the Purchasers and the Placement
Agent in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any
event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.

 

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 either an individual or an entity duly incorporated
or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full
right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and
delivery of the Transaction Documents and performance by 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
pursuant to an effective registration statement or otherwise 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 either: (i) an “accredited investor”
as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional
buyer” as defined in Rule 144A(a) under the Securities Act.

 

(d)            
Experience of 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. The Purchaser represents that (i) the Purchaser was contacted
regarding the sale of the Securities by the Placement Agent or the Company (or an authorized agent or representative thereof) and
the Purchaser had a prior pre-existing relationship with the Company under the US securities laws and interpretations, (ii) no
Securities were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith,
the Purchaser did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper
or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend
any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising,
and (iii) the Purchaser has not become interested in the offering of the Securities as a result of any registration statement of
the Company filed with the Commission or any other securities agency or regulator.

 

(f)             
Access to Information. Such Purchaser acknowledges that it has had the opportunity
to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded (i)
the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities;
(ii) access to information about the Company and its financial condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment.  Such Purchaser acknowledges and agrees that neither the Placement Agent nor any
Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Securities nor
is such information or advice necessary or desired.  Neither the Placement Agent nor any Affiliate has made or makes any representation
as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public information
with respect to the Company which such Purchaser agrees need not be provided to it.  In connection with the issuance of the
Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary
to such Purchaser.

 

(g)            
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 or to such Purchaser’s representatives, including,
without limitation, its officers, directors, partners, legal and other advisors, agents and Affiliates, 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 this 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.

 

 

 

    	 	14	 

     

    

 

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. 

 

(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:

 

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

 

The Company
acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights 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, including, if the Securities are subject to registration pursuant to the Registration Rights Agreement,
the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights
Agreement) thereunder.

 

(c)            
Certificates evidencing the Shares and 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 Shares or Warrant Shares pursuant to Rule 144, (iii) if such Shares or
Warrant Shares are eligible for sale under Rule 144, or (iv) if such legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall
cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective Date if required by the Transfer
Agent to effect the removal of the legend hereunder. If all or any portion of a Warrant is exercised at a time when there is an
effective registration statement to cover the resale of the Warrant Shares, or if such Shares or Warrant Shares may be sold under
Rule 144 and the Company is then in compliance with the current public information required under Rule 144, or if the Shares or
Warrant Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information
required under Rule 144 as to such Shares or Warrant Shares 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 Trading Days following the delivery by a Purchaser
to the Company or the Transfer Agent of a certificate representing Shares or Warrant Shares, as the case may be, issued with a
restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to
such Purchaser a certificate representing such shares that is free from all restrictive and other legends. The Company may not
make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth
in this Section 4. Certificates for Securities 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.

 

 

 

    	 	15	 

     

    

 

(d)            
In addition to such Purchaser’s other available remedies, the Company shall pay to a
Purchaser, in cash, the greater of (i) as partial liquidated damages and not as a penalty, for each $1,000 of Underlying Shares
(based on the VWAP of the Common Stock on the date such Securities are submitted to the Transfer Agent) delivered for removal of
the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days
after such damages have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered
without a legend and (ii) if the Company fails to (i) issue and deliver (or cause to be delivered) to a Purchaser by the Required
Delivery Date a certificate representing the Securities so delivered to the Company by such Purchaser that is free from all restrictive
and other legends or (ii) if after the Required Delivery Date such Purchaser purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number of shares of
Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock
that such Purchaser anticipated receiving from the Company without any restrictive legend, then, an amount equal to the excess
of such Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the
shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In
Price”) over the product of (A) such number of Underlying Shares that the Company was required to deliver to such
Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on any Trading Day during
the period commencing on the date of the delivery by such Purchaser to the Company of the applicable Underlying Shares (as the
case may be) and ending on the date of such delivery and payment under this clause (ii).

 

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

 

4.2           
Furnishing of Information; Public Information.

 

(a)            
If the Common Stock is not registered under Section 12(b) or 12(g) of the Exchange Act on
the date hereof, the Company agrees to cause the Common Stock to be registered under Section 12(g) of the Exchange Act on or before
the 60th calendar day following the date hereof. Until the earliest of the time that (i) no Purchaser owns Securities
or (ii) the Warrants have expired, 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 (i) shall fail for any reason
to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i)
or becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public
Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company shall pay to
a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability
to sell the Securities, an amount in cash equal to one percent (1.0%) of the aggregate Subscription Amount of such Purchaser’s
Securities on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling
less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time
that such public information is no longer required  for the Purchasers to transfer the Shares and Warrant Shares pursuant
to Rule 144.  The payments to which a Purchaser shall be entitled pursuant to this Section 4.2(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.

 

 

 

    	 	16	 

     

    

 

4.3           
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.

 

4.4           
Securities Laws Disclosure; Publicity. The Company shall, by the end of the Trading
Day immediately following the date hereof, file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto,
with the Commission. From and after the filing of such Form 8-K, the Company represents to the Purchasers 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. In addition, effective upon the filing of such Form 8-K, the Company acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates
on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any press releases
with respect to the transactions contemplated hereby, and neither the Company nor any 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 any
Purchaser, or without the prior consent of each 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 any Purchaser, or include the name of any Purchaser in any filing with the Commission
or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except: (a) as required by federal
securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure
is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such
disclosure permitted under this clause (b).

 

4.5           
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.

 

4.6           
Non-Public Information. Except with respect to the material terms and conditions of
the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, 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 constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior
thereto such Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information
confidential. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company. To the extent that the Company delivers any material, non-public information to a Purchaser
without such Purchaser’s consent, the Company hereby covenants and agrees that such purchaser shall not have any duty of
confidentiality to Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates,
or a duty to the Company, and of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates
not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable
law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public
information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant
in effecting transactions in securities of the Company.

 

4.7           
Use of Proceeds. Except as set forth on Schedule 4.7 attached hereto, the Company
shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and shall not use such proceeds:
(a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course
of the Company’s business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c)
for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.

 

 

 

    	 	17	 

     

    

 

4.8           
Indemnification of Purchasers. Subject to the provisions of this Section 4.8, the Company
will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any
other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such
controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to
(a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the
other Transaction Documents or (b) any action instituted against 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 Parties, 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 Parties
may have with any such stockholder or any violations by such Purchaser Parties of state or federal securities laws or any conduct
by such Purchaser Parties 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. The
indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in
addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company
may be subject to pursuant to law.

 

4.9           
Reservation of Common Stock. As of the date hereof, the Company has reserved and the
Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of
Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to
any exercise of the Warrants.

 

4.10        
Listing
of Common Stock. The Company hereby agrees to use best efforts to maintain the listing
or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the
Company shall apply to list or quote all of the Shares and Warrant Shares on such Trading Market and promptly secure the listing
of all of the Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the
Common Stock traded on any other Trading Market, it will then include in such application all of the Shares and Warrant Shares,
and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other
Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing or quotation
and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common
Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without
limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection
with such electronic transfer.

 

4.11 [RESERVED]

 

 

 

    	 	18	 

     

    

 

4.12        
Subsequent Equity Sales.

 

(a)            
From the date hereof until sixty (60) days after the Effective Date, neither the Company nor
any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common
Stock or Common Stock Equivalents. Additionally, until the later of (i) such time as no Purchaser holds more than 50% of the Shares
originally purchased by such Purchaser and the average of the daily VWAP for 10 consecutive Trading Days is greater than $6.00
per share, or (ii) the one year anniversary of the Closing Date, neither the Company nor any Subsidiary shall sell or grant any
option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant
or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share of
Common Stock less than the Per Share Purchase Price then in effect (such issuances collectively, a “Dilutive Issuance”)
(it being understood and agreed that if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time,
whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares
of Common Stock at an effective price per share that is less than the Per Share Purchase Price, such issuance shall be deemed to
have occurred for less than the Per Share Purchase Price on such date of the Dilutive Issuance at such effective price).

 

(b)            
From the date hereof until such time as no Purchaser holds any of the Warrants, the Company
shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries
of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable
Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A)
at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices
of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B)
with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of
such debt or equity security upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line
of credit, whereby the Company may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. 

 

(c)            
Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance,
except that no Variable Rate Transaction shall be an Exempt Issuance.

 

4.13        
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
the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. 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.

 

4.14        
Certain Transactions and Confidentiality. Each
Purchaser covenants with the Company, severally and not jointly with the other Purchasers, that neither it, nor any Affiliate acting
on its behalf or pursuant to any understanding with it will execute any purchases or sales of any of the Company’s securities
during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by
this Agreement are first publicly disclosed pursuant to the initial Form 8-K filing as described in Section 4.4. 
Each Purchaser covenants with the Company, severally and not jointly with the other Purchasers, 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 six (6) month anniversary of the
Closing. Each Purchaser covenants with the Company, severally and not jointly with the other Purchasers, that until such time as
the transactions contemplated by this Agreement are publicly disclosed pursuant to the initial Form 8-K filing as described in
Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information
included in the Transaction Documents and the Disclosure Schedules.  Notwithstanding the foregoing,
and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that other
than the six-month prohibition on Short Sales set forth above (i) no Purchaser makes any representation, warranty or covenant hereby
that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated
by this Agreement publicly disclosed pursuant to the initial Form 8-K filing as described in Section 4.4,
(ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance
with applicable securities laws from and after the time that the transactions contemplated by this Agreement are publicly
disclosed pursuant to the initial Form 8-K filing as described in Section 4.4 and (iii) no Purchaser
shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries
after the publicly disclosed pursuant to the initial Form 8-K filing as described in Section 4.4. 
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 covenant 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.

 

 

 

    	 	19	 

     

    

 

4.15        
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 any 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 Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states
of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.

 

4.16        
Intentionally Omitted.

 

4.17        
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 Shares and Warrant Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to
any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company
may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.

 

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 January 12, 2018; provided, however,
that such termination will not affect the right of any party to sue for any breach by any other party (or parties).

 

5.2           
Fees and Expenses. 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 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: (a) the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature
pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth
on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant
to any Transaction Document 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.

 

5.5           
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented
or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers holding at least
51% in interest of the Shares then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived
provision is sought; provided, that if any amendment, modification or waiver disproportionately and adversely impacts a
Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also
be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise
of any such right.

 

 

 

    	 	20	 

     

    

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.”

 

5.8           
No Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary
of the representations and warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in
Section 3.2. 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 4.8 and this Section 5.8.

 

5.9           
Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings
concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction
Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough
of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives,
and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such 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 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
any party hereto shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition
to the obligations of the Company under Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the
non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such Action or Proceeding.

 

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

 

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

 

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

 

 

 

    	 	21	 

     

    

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 an exercise of a Warrant, the applicable Purchaser
shall be required to return any shares of Common Stock subject to any such rescinded exercise notice concurrently with the return
to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s
right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate
evidencing such restored right).

 

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

 

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

 

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

 

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

 

 

 

    	 	22	 

     

    

 

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

 

(Signature Pages Follow)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	23	 

     

    

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

 

	
        genius brands international,
        inc.

         

         
	Address for Notice:
	
        By: /s/ Andy Heyward                         

        Name: Andy Heyward

        Title: CEO

         

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

         

         
	 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	24	 

     

    

[PURCHASER SIGNATURE PAGES TO gnus
SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Purchaser: Scot Cohen                                                  

 

Signature of Authorized Signatory of
Purchaser: /s/ Scot Cohen                                 

 

Name of Authorized Signatory: _______________________________________________

 

Title of Authorized Signatory: ________________________________________________

 

Email Address of Authorized Signatory:
________________________________________

 

Facsimile Number of Authorized Signatory: ______________________________________

 

Address for Notice to Purchaser:

200 29th Apt 6

NY, NY 10003

 

 

 

 

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

 

 

 

 

 

Subscription Amount: $225,000

 

Shares: 75,000

 

Warrant Shares: 75,000

 

EIN Number: _______________________

 

 

[SIGNATURE PAGES CONTINUE]

 

 

 

    	 	25	 

     

    

 

 

 

 

 

 

[PURCHASER SIGNATURE PAGES TO gnus
SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Purchaser: Brio Capital Master
Fund Ltd.

 

Signature of Authorized Signatory
of Purchaser: /s/ Shaye Hirsch                                 

 

Name of Authorized Signatory: Shaye
Hirsch

 

Title of Authorized Signatory: Director

 

Email Address of Authorized Signatory: 

 

Facsimile Number of Authorized Signatory: 

 

Address for Notice to Purchaser:

c/o Brio Capital Management LLC

100 Merrick Road, Suite 401W

Rockville Centre, N.Y. 11570-4800

 

 

 

 

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

 

 

 

 

 

Subscription Amount: $300,000.00

 

Shares: 100,000

 

Warrant Shares: 100,000

 

EIN Number: 

 

 

[SIGNATURE PAGES CONTINUE]

 

 

 

 

 

 

 

 

 

    	 	26	 

     

    

[PURCHASER SIGNATURE PAGES TO gnus
SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Purchaser: David R. Morgan                                                         

 

Signature of Authorized
Signatory of Purchaser: /s/ David R. Morgan                               

 

Name of Authorized Signatory: 

 

Title of Authorized Signatory: 

 

Email Address of Authorized Signatory: 

 

Facsimile Number of Authorized Signatory: 

 

Address for Notice to Purchaser:

David Morgan

PO Box 664

Liberty Lake, WA 99010

 

 

 

 

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

 

 

 

 

 

Subscription Amount: $66,000

 

Shares: 22,000

 

Warrant Shares: 22,000

 

EIN Number: 

 

 

[SIGNATURE PAGES CONTINUE]

 

 

 

    	 	27	 

     

    

 

[PURCHASER SIGNATURE PAGES TO gnus
SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Purchaser: IROQUOIS
CAPITAL
INVESTMENT GROUP LLC                                                         

 

Signature of Authorized Signatory
of Purchaser: /s/ Richard
Abbe                               

 

Name of Authorized Signatory: Richard Abbe

 

Title of Authorized Signatory:
Managing Member

 

Email Address of Authorized Signatory: 

 

Facsimile Number of Authorized Signatory: 

 

Address for Notice to Purchaser:

205 East 42nd St. 20th Fl

New York, NY 10017

 

 

 

 

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

 

 

 

 

 

Subscription Amount: $210,000

 

Shares: 70,000

 

Warrant Shares: 70,000

 

EIN Number: 

 

 

[SIGNATURE PAGES CONTINUE]

 

 

 

 

 

 

    	 	28	 

     

    

 

[PURCHASER SIGNATURE PAGES TO gnus
SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Purchaser: IROQUOIS MASTER
FUND
LTD                                                         

 

Signature of Authorized Signatory
of Purchaser: /s/ Kimberly Page                               

 

Name of Authorized Signatory: Kimberly Page

 

Title of Authorized Signatory: Director

 

Email Address of Authorized Signatory: 

 

Facsimile Number of Authorized Signatory: 

 

Address for Notice to Purchaser:

205 East 42nd St. 20th Fl

New York, NY 10017

 

 

 

 

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

 

 

 

 

 

Subscription Amount: $375,000

 

Shares: 125,000

 

Warrant Shares: 125,000

 

EIN Number: 

 

 

[SIGNATURE PAGES CONTINUE]

 

 

 

    	 	29	 

     

    

 

 

[PURCHASER SIGNATURE PAGES TO gnus
SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Purchaser: ANSON
INVESTMENTS
MASTER
FUND
LP                                                         

 

Signature of Authorized
Signatory of Purchaser: /s/ Amin
Nathoo                                      

 

Name of Authorized Signatory: AMIN NATHOO

 

Title of Authorized Signatory:
Advising Rep, Anson Advisors Inc.

 

Email Address of Authorized Signatory: 

 

Facsimile Number of Authorized Signatory: 

 

Address for Notice to Purchaser:

155 UNIVERSITY AVENUE, SUITE 207

TORONTO, ONTARIO, CANADA

M5H 3B7

ATT: AMIN NATHOO

 

 

 

 

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

 

SAME AS ABOVE

 

 

 

 

Subscription Amount: $600,000

 

Shares: 200,000

 

Warrant Shares: 200,000

 

EIN Number: 

 

 

[SIGNATURE PAGES CONTINUE]

 

    	 	30Exhibit 10.2

 

January 6, 2018

 

PERSONAL AND CONFIDENTIAL

 

Genius Brands International, Inc.

301 N. Canon Drive, #305

Beverly Hills, CA 90210

T: 310.273.4222

 

Dear Sirs:

 

This letter will confirm
the understanding and agreement (the “Agreement”) between Chardan Capital Markets, LLC (“Broker”)
and Genius Brands International, Inc. (the “Company”) as follows:

 

		1.	Engagement: The Company hereby engages Broker as its exclusive agent in the private
or public placement(s) of one or more classes or series of registered or unregistered securities of the Company to investors (the
“Investors”). Such securities (the “Securities”) may take the form of common stock or other
equity-linked securities or any combination thereof. Such placements shall be referred to as the “Transactions”.
Broker may retain other brokers or dealers to act as subagents or selected-dealers on its behalf in connection with such Transactions.

 

		2.	Broker’s Role:
Broker hereby accepts the engagement described herein and, in that connection, agrees to:

 

		(a)	Review any offering documents used in connection with each Transaction (the “Offering
Documents”) describing the Company and the Securities;

 

		(b)	review with the Company the Investors to whom the Offering Documents will be provided;

 

		(c)	assist in the preparation of other communications to be used in placing the Securities, whether
in the form of letter, circular, notice or otherwise; and

 

		(d)	assist and advise the Company with respect to the negotiation of the sale of the Securities to
the Investors.

 

		3.	Term;
Exclusivity: This exclusive engagement will commence on the date hereof and terminate five business days following the
date on which the party receives written notice from the other party of termination of this engagement; provided that no such
notice may be given by the Company for a period of 12 months after the date hereof. During Broker’s engagement hereunder:
(i) the Company will not, and will not permit its representatives to, other than in coordination with Broker, contact or solicit
institutions, corporations or other entities or individuals as potential purchasers of the Securities and (ii) the Company will
not pursue any financing transaction which would be in lieu of a Transaction. Furthermore, the Company agrees that during Broker’s
engagement hereunder, all inquiries, whether direct or indirect, from prospective Investors will be referred to Broker and will
be deemed to have been contacted by Broker in connection with a Transaction, except with the Excluded Persons as defined in Paragraph
7 below. Upon termination of this Agreement the Company shall pay to Broker all fees earned and reimburse Broker for all expenses
incurred, in accordance with Paragraphs 7 and 8 hereof, respectively. The Company agrees to pay Broker any fees specified in Paragraph
7 during the time limitations specified herein. The Company agrees that this section 3 and the provisions relating to the payment
of fees, reimbursement of expenses, indemnification and contribution, confidentiality, conflicts, independent contractor and waiver
of the right to trial by jury will survive any termination of this letter agreement.

 

 

 

Chardan Capital
Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

    	 	1	 

     

    

 

		4.	Best Efforts:
It is understood that Broker’s involvement in a Transaction is strictly on a reasonable best efforts basis and that the
consummation of a Transaction will be subject to, among other things, market conditions. It is understood that Broker’s
assistance in a Transaction will be subject to the satisfactory completion of such investigation and inquiry into the affairs
of the Company as Broker deems appropriate under the circumstances (such investigation hereinafter to be referred to as “Due
Diligence”) and to the receipt of all internal approvals of Broker in connection with the transaction. Broker shall
have the right in its sole discretion to terminate this Agreement if the outcome of the Due Diligence is not satisfactory to Broker
or if approval of its internal committees is not obtained.

 

		5.	Information:
The Company shall furnish, or cause to be furnished, to Broker all information requested by Broker for the purpose of rendering
services hereunder (all such information being the “Information”). In addition, the Company agrees to make
available to Broker upon request from time to time the officers, directors, accountants, counsel and other advisors of the Company.
The Company recognizes and confirms that Broker (a) will use and rely on the Information, including the Offering Documents, and
on information available from generally recognized public sources in performing the services contemplated by thisAgreement without
having independently verified the same; (b) does not assume responsibility for the accuracy or completeness of the Offering Documents
or the Information and such other information; and (c) will not make an appraisal of any of the assets or liabilities of the Company.
Upon reasonable request, the Company will meet with Broker or its representatives to discuss all information relevant for disclosure
in the Offering Documents and will cooperate in any investigation undertaken by Broker thereof, including any document included
or incorporated by reference therein. Broker shall be a third party beneficiary of any representations, warranties and covenants
made by the Company to any Investor in a Transaction.

 

6.             Related Agreement:

 

		(a)	If required by Broker, the Company shall enter into a Placement Agency Agreement
with Broker that is substantially consistent with Broker’s standard form, modified as appropriate to reflect the terms of
the applicable Transaction and containing such terms, covenants, conditions, representations, warranties, and providing for the
delivery of legal opinions, comfort letters and officer’s certificates, all in form and substance satisfactory to Broker
and its counsel.
	 	 	 

		(b)	Unless the Transaction is an underwritten offering by Broker, in which case
the Company shall enter into an underwriting agreement with Broker that is customary for such offerings, if required by the Investors,
the sale of Securities to any Investor will be evidenced by a purchase agreement (“Purchase Agreement”) between
the Company and such Investor in a form reasonably satisfactory to the Company and Broker. Prior to the signing of any Purchase
Agreement, officers of the Company with responsibility for financial affairs will be available to answer inquiries from prospective
investors.
	 	 	 

		(c)	Notwithstanding anything herein to the contrary, in the event that Broker
determines that any of the terms provided for hereunder shall not comply with a FINRA rule, including but not limited to FINRA
Rule 5110, then the Company shall agree to amend this Agreement (or include such revisions in the final underwriting or placement
agency agreement) in writing upon the request of Broker to comply with any such rules; provided that any such amendments shall
not provide for terms that are less favorable to the Company.

 

 

Chardan Capital
Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

    	 	2	 

     

    

 

7.             Fees: As compensation for the
services to be rendered by Broker hereunder, the Company will pay Broker the following fee (“Transaction Fee”):

 

		(a)	A cash fee payable immediately upon the closing of each Transaction and
equal to $100,000. All cash Transaction Fees shall be paid at the closing of a Transaction.

 

		(b)	Five-year warrants (the “Broker Warrants”) to Broker or its designees at
                                                               the Closing to purchase 93,000 shares of Common Stock. The Broker Warrants shall have the same terms as the warrants (if any)
                                                               issued to the Purchasers in the Transaction.

 

		(c)	Broker shall be entitled to a Transaction Fee under clauses (a) and (b)
hereunder, calculated in the manner set forth therein, with respect to any public or private offering or other financing or capital-raising
transaction of any kind (“Tail Financing”) to the extent that such financing or capital is provided to the Company
by investors listed on Schedule A, whom Broker had introduced, directly or indirectly, to the Company, if such Tail Financing
is consummated at any time within the 12-month period following the expiration or termination of this Agreement.

 

8.            Indemnification:

 

		(a)	To the extent permitted by law, the Company will indemnify Broker and its
affiliates, stockholders, directors, officers, employees and controlling persons (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) against all losses, claims, damages, expenses and liabilities, as the same are incurred
(including the reasonable fees and expenses of counsel), relating to or arising out of its activities hereunder or pursuant to
this engagement letter, except to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect thereof)
are found in a final judgment (not subject to appeal) by a court of law to have resulted primarily and directly from Broker’s
willful misconduct or gross negligence in performing the services described herein.

 

		(b)	Promptly after receipt by Broker of notice of any claim or the commencement
of any action or proceeding with respect to which Broker is entitled to indemnity hereunder, Broker will notify the Company in
writing of such claim or of the commencement of such action or proceeding, and the Company will assume the defense of such action
or proceeding and will employ counsel reasonably satisfactory to Broker and will pay the fees and expenses of such counsel. Notwithstanding
the preceding sentence, Broker will be entitled to employ counsel separate from counsel for the Company and from any other party
in such action if counsel for Broker reasonably determines that it would be inappropriate under the applicable rules of professional
responsibility for the same counsel to represent both the Company and Broker. In such event, the reasonable fees and disbursements
of no more than one such separate counsel will be paid by the Company, in addition to local counsel. The Company will have the
exclusive right to settle the claim or proceeding provided that the Company will not settle any such claim, action or proceeding
without the prior written consent of Broker, which will not be unreasonably withheld.

 

		(c)	The Company agrees to notify Broker promptly of the assertion against it or any other person of
any claim or the commencement of any action or proceeding relating to a transaction contemplated by this engagement letter.

 

 

Chardan Capital
Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

    	 	3	 

     

    

 

		(d)	If for any reason the foregoing indemnity is unavailable to Broker or insufficient to hold Broker
harmless, then the Company shall contribute to the amount paid or payable by Broker as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one
hand and Broker on the other, but also the relative fault of the Company on the one hand and Broker on the other that resulted
in such losses, claims, damages or liabilities, as well as any relevant equitable considerations. The amounts paid or payable by
a party in respect of losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees
and expenses incurred in defending any litigation, proceeding or other action or claim. Notwithstanding the provisions hereof,
Broker’s share of the liability hereunder shall not be in excess of the amount of fees actually received, or to be received,
by Broker under this engagement letter (excluding any amounts received as reimbursement of expenses incurred by Broker).

 

		(e)	These indemnification provisions shall remain in full force and effect whether or not the transaction
contemplated by this engagement letter is completed and shall survive the termination of this engagement letter, and shall be in
addition to any liability that the Company might otherwise have to any indemnified party under this engagement letter or otherwise.

 

		9.	Governing Laws: This letter
agreement will be governed by and construed in accordance with the laws of the State of New York applicable to agreements made
and to be fully performed therein. The Company irrevocably submits to the jurisdiction of any court of the State of New York located
in the City and County of New York or in the United States District Court for the Southern District of New York for the purpose
of any suit, action or other proceeding arising out of this letter agreement or our engagement hereunder.

 

Each of the Company and Broker
hereby waives any right it may have to a trial by jury in respect of any claim brought by or on behalf of either party based upon,
arising out of or in connection with this letter agreement, our engagement hereunder or the transaction contemplated hereby.

 

All fees and expenses payable
hereunder will be payable in U.S. dollars in cash. The Company hereby irrevocably consents to the service of process in any proceeding
by the mailing of copies of such process to the Company at its address set forth above.

 

		10.	Confidentiality:
Except as required by law, this Agreement and the services and advice to be provided by Broker hereunder, shall not be disclosed
to third parties without Broker’s prior written permission. Notwithstanding, Broker shall be permitted to advertise the
services it provided in connection with each Transaction subsequent to the consummation of such Transaction. Such expense shall
not be reimbursable under paragraph 7 hereof.

 

		11.	No Brokers: The Company represents and warrants to Broker that there are no
                                                                  brokers, representatives or other persons which have an interest in compensation due to Broker from any transaction
                                                                  contemplated herein or which would otherwise be due any fee, commission or remuneration upon consummation of any
                                                                  Transaction.

 

		12.	Authorization:
The Company and Broker represent and warrant that each has all requisite power and authority to enter into and carry out the terms
and provisions of this Agreement and the execution, delivery and performance of this Agreement does not breach or conflict with
any agreement, document or instrument to which it is a party or bound.

 

		13.	Independent Contractor:The
Company acknowledges that in performing its services, Broker is acting as an independent contractor, and not as a fiduciary, agent
or otherwise, of the Company or any other person. The Company acknowledges that in performing its services hereunder, Broker shall
act solely pursuant to a contractual relationship on an arm’s length basis (including in connection with determining the
terms of any Transaction). Any review by Broker of the Company, the transaction contemplated hereby or other matters relating
to such transactions has been and shall be performed solely for the benefit of Broker and shall not be on behalf of the Company.
The Company agrees that is shall not claim that Broker owes a fiduciary duty to the Company in connection with such transaction
or the process leading thereto. No one other than the Company is authorized to rely upon engagement of Broker hereunder or any
statements, advice, opinions or conduct by Broker. The Company further acknowledges that Broker may perform certain of the services
described herein through one or more of its affiliates and any such affiliates shall be entitled to the benefit of this Agreement.
This Paragraph 13 shall survive the termination or expiration of this Agreement.

 

 

 

Chardan Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

    	 	4	 

     

    

 

		14.	Conflicts: The
Company acknowledges that Broker and its affiliates may have and may continue to have investment banking and other relationships
with parties other than the Company pursuant to which Broker may acquire information of interest to the Company. Broker shall
have no obligation to disclose such information to the Company or to use such information in connection with any contemplated
transaction.

 

		15.	Anti-Money Laundering:
To help the United States government fight the funding of terrorism and money laundering, the federal laws of the United States
requires all financial institutions to obtain, verify and record information that identifies each person with whom they do business.
This means we must ask you for certain identifying information, including a government-issued identification number (e.g., a U.S.
taxpayer identification number) and such other information or documents that we consider appropriate to verify your identity,
such as certified articles of incorporation, a government-issued business license, a partnership agreement or a trust instrument.

 

		16.	Miscellaneous:
This Agreement constitutes the entire understanding and agreement between the Company and Broker with respect to the subject matter
hereof and supersedes all prior understanding or agreements between the parties with respect thereto, whether oral or written,
express or implied. Any amendments or modifications must be executed in writing by both parties. It is understood and agreed that
Broker’s services hereunder will not include providing any tax, accounting, legal or regulatory advice or developing any
tax strategies for the Company. This Agreement and all rights, liabilities and obligations hereunder shall be binding upon and
inure to the benefit of each party’s successors but may not be assigned without prior written approval of the other party.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument. The descriptive headings of the Paragraphs of this Agreement are inserted for
convenience only, do not constitute a part of this Agreement and shall not affect in anyway the meaning or interpretation of this
Agreement.

 

 

 

 

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

 

 

Chardan Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

    	 	5	 

     

    

 

If all the foregoing
is acceptable to you, please so indicate by signing in the space provided below and returning a signed copy of this letter to us
for our records.

 

Broker is delighted
to accept this engagement and looks forward to working with you. Please confirm that the foregoing correctly set forth our agreement
by signing the enclosed duplicate of this letter in the space provided and returning it, whereupon this letter shall constitute
a binding agreement as of the date first above written.

 

 

	 	 Very truly yours,

 

CHARDAN CAPITAL MARKETS, LLC

 

By:
/s/ George Kaufman

       Name: George
Kaufman 

       Title: Managing
Director

 

 

 

 

ACCEPTED AND AGREED TO
 AS OF THE ABOVE DATE:

 

GENIUS BRANDS INTERNATIONAL,
INC.

 

BY: /s/ Andy Heyward                             

       Name:
Andy Heyward
        Title: CEO

 

 

 

 

Chardan
Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

 

    	 	6	 

     

    

 

SCHEDULE A

 

 

Anson Funds

Aspire Capital

Bard Investments

Brio Capital

Empery and its affiliates

Heights and its affiliates

Hudson Bay and its affiliates

Intracoastal Capital

Iroquois and its affiliates

Palm Ventures

Kingsbrook

LH Financial and its affiliates

Lincoln Park

Special Situations Fund

Wolverine

 

 

 

 

 

 

 

 

 

 

Chardan
Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

 

 

    	 	7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00278-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00278-of-00352.parquet"}]]