Document:

Exhibit 10.16

 

DEBT SETTLEMENT AGREEMENT AND RELEASE

 

This DEBT SETTLEMENT
AGREEMENT AND RELEASE (this “Agreement”) is dated April [28], 2017 (the “Effective Date”),
by and between _______ (“Holder”), and Arkados Group, Inc., a Delaware corporation (“AKDS”).
AKDS and the Holder may be referred to herein as the “Parties.”

 

R E C I T A L S:

 

WHEREAS, Holder
is the beneficial owner of a convertible note, in the principal amount of $38,500.00, issued by AKDS on January 27, 2017, as amended
by that Amendment #1 to the Securities Purchase Agreement and $38,500 Promissory Note dated March 31, 2017 (collectively the “Note”),
of which approximately [$38,879.73] of principal and interest remains outstanding on the date hereof, issued pursuant to the terms
and conditions set forth in the Securities Purchase Agreement dated January 27, 2017, as amended by that Amendment #1 to the Securities
Purchase Agreement and $38,500 Promissory Note dated March 31, 2017 (the “Purchase Agreement”).

 

WHEREAS, the
Holder and AKDS desire to make a payment of cash and an issuance of shares of its common stock in exchange for the settlement,
cancellation and termination of all obligations and rights under the Note and under the Purchase Agreement, including the payment
of any penalties and interest and obligations to issue any additional shares of common stock of AKDS, accrued and owing under the
Note and the Purchase Agreement (collectively, the “Note Obligations”) and a release of all claims related thereto
by Holder, as provided herein.

 

NOW, THEREFORE,
in consideration of the foregoing Recitals, the mutual promises, covenants, and undertakings contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally
bound, hereby agree as follows

 

1. Settlement of the Note Obligations.

 

1.1            As
full and complete settlement of all Note Obligations and in consideration for the fulfillment of the covenants and promises set
forth herein, AKDS agrees to issue to Holder, on the same date: (i) a cash payment of $35,000.00 pursuant to the wire transfer
instructions provided in Exhibit A attached hereto (the “Cash Payment”) and (ii) 20,000 (twenty thousand)
shares of common stock (the “Shares”) of AKDS (the “Share Issuance” and, together with the
Cash Payment, the “Settlement Payment”). Upon the issuance to Holder of the Settlement Payment, all Note Obligations
shall be deemed fully satisfied and paid in full and the Note and the Purchase Agreement shall terminate immediately thereon. The
date and time that the Settlement Payment is delivered to the Holder (the “Closing Date”) shall be on or about
April [28], 2017, or such other date as is mutually agreed upon by the Parties. The closing of the transactions contemplated by
this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the Parties.

 

1.2            The
Parties expressly acknowledge and agree that the Settlement Payment (a) is the result of good faith negotiations conducted by and
between the Parties; (b) resolves all claims by Holder relating to the Note Obligations; and (c) constitutes fair and reasonable
consideration for the general release of claims set forth below. Holder shall be solely responsible for any federal, state and
local taxes due on the Settlement Payment, and specifically agrees to indemnify and hold AKDS harmless for any claims involving
federal, state or local taxes resulting from such responsibility.

 

     

     

    

 

2.   General Release and
Waiver

 

2.1            Except
as expressly set forth in this Agreement, for and in consideration of the mutual covenants set forth herein, which are hereby excluded
from and survive this general release and waiver, Holder, on his own behalf, and on behalf of his respective grantees, agents,
spouses, children, beneficiaries, successors, attorneys, heirs, devisees, trustees, assigns, attorneys, entities in which Holder
has an interest, and any other person claiming through or on behalf of him (collectively, the “Releasing Parties”),
hereby fully, irrevocably and unconditionally releases, acquits, and discharges AKDS and each of its direct or indirect parents,
wholly or majority- owned subsidiaries, affiliated and related entities, predecessors, successors and assigns, partners, privities,
and any of its present and former directors, officers, employees, shareholders, partners, agents, alter egos, representatives,
attorneys, accountants, insurers, receivers, heirs, executors, administrators, conservators, and all persons acting by, through,
under or in concert with it, or any of them (collectively “Released Parties”) from all manner of actions, causes
of action, complaints, claims, demands, liens, suits, obligations, controversies, contracts, agreements, promises, charges, penalties,
losses, debts, costs, attorneys’ fees, expenses, damages, judgments, orders, and liabilities of whatever kind, whether in
law or in equity, now known or unknown, suspected or unsuspected, fixed or contingent, and whether or not concealed, latent or
hidden, which have existed or may have existed, or which do exist or which hereafter can, shall, or may exist, whether contractual,
common law, statutory, federal, state, or otherwise, which Holder or any of the Releasing Parties have or could have against AKDS
or the Released Parties relating to the Note, the Purchase Agreement or the Note Obligations (collectively, the “Released
Claims”). Holder and the Releasing Parties hereby acknowledge and agree that, except as expressly set forth in this Agreement,
the Released Parties have no other liabilities or obligations, of any kind or nature, owed to the Releasing Parties, in connection
with or relating to the Released Claims or otherwise.

 

2.2            Holder,
on behalf of himself, as well as the Releasing Parties, expressly acknowledges that the releases provided in this Agreement are
intended to include in their effect, without limitation, any and all claims, complaints, charges or suits, including those claims,
complaints, charges or suits which he does not know or suspect to exist in his favor at the time of execution hereof, which if
known or suspected, could materially affect his decision to execute this Agreement. This Agreement contemplates the extinguishment
of any such claims, complaints, charges or suits and Holder hereby expressly and knowingly waives and relinquishes any and all
rights that he has or might have relating to the Released Claims under California Civil Code §1542 (and under other
statutes or common law principles of similar effect) which provides:

 

A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

Holder
acknowledges that he may hereafter discover facts different from, or in addition to, those which he now believes to be true with
respect to the Released Claims above. On his own behalf and on behalf of the Releasing Parties, Holder agrees that the foregoing
release and waiver shall be and remain effective in all respects notwithstanding such different or additional facts or discovery
thereof, and that this Agreement contemplates the extinguishment of all such Released Claims. By executing this Agreement, Holder
acknowledges the following: (a) he is represented by counsel; (b) he has read and fully understands the provisions of California
Civil Code §1542; and (c) he has been specifically advised by his counsel of the consequences of the above waiver and this
Agreement generally. Holder acknowledges and agrees that this waiver is an essential and material term of this release and the
settlement that underlies it and that without such waiver the Agreement would not have been accepted.

 

     

     

    

 

3.   Representations and Warranties
of AKDS. AKDS hereby represents and warrants to the Holder as of the date hereof and the date of the Closing, as follows:

 

3.1           Authorization.
The execution, delivery and performance by AKDS of this Agreement and the performance of all of AKDS’s obligations hereunder
have been duly authorized by all necessary corporate action, and this Agreement has been duly executed and delivered by AKDS.

 

3.2           No Conflicts. The
execution and performance of the transactions contemplated by this Agreement and compliance with its provisions by AKDS will not
conflict with or result in any breach of any of the terms, conditions, or provisions of, or constitute a default under, its Certificate
of Incorporation or Bylaws or any agreement to which AKDS is a party or by which it or any of its properties is bound.

 

3.3           Binding
Obligation. Assuming the due execution and delivery of this Agreement, this Agreement constitutes the valid and binding obligation
of AKDS, enforceable against AKDS in accordance with its terms, subject, as to enforcement, (i) to bankruptcy, insolvency, reorganization,
arrangement, moratorium and other laws of general applicability relating to or affecting creditors’ rights and (ii) to general
principles of equity, whether such enforceability is considered in a proceeding in equity or at law.

 

4.   Representations and Warranties
of the Holder. The Holder hereby represents and warrants to AKDS as of the date hereof and the date of the Closing, as
follows:

 

4.1           Authorization.
Each of the Holder has full power and authority to enter into this Agreement, to perform its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby. This Agreement constitutes a valid and legally binding obligation
of each of the Holder, enforceable in accordance with their respective terms.

 

4.2           No Conflicts. The
execution and performance of the transactions contemplated by this Agreement and compliance with its provisions by the Holder will
not conflict with or result in any breach of any of the terms, conditions, or provisions of any agreement to which the Holder is
a party or by which the Holder or the Holder’s assets or properties is bound.

 

4.3           Binding
Obligation. Assuming the due execution and delivery of this Agreement, this Agreement constitutes the valid and binding obligation
of the Holder, enforceable against the Holder in accordance with its terms.

 

4.4           Investment
Representations.

 

(a)       This
Agreement is made in reliance upon the Holder’s representation to AKDS, which by its acceptance hereof Holder hereby confirms,
that the Shares to be received by it will be acquired for investment for its own account, not as a nominee or agent, and not with
a view to the sale or distribution of any part thereof, and that it has no present intention of selling, granting participation
in, or otherwise distributing the same, but subject nevertheless to any requirement of law that the disposition of its property
shall at all times be within its control.

 

(b)       The
Holder understands that the Shares are not registered under the Securities Act of 1933, as amended (the “1933 Act”),
on the basis that the sale provided for in this Agreement and the issuance of securities hereunder is exempt from registration
under the 1933 Act pursuant to Section 4(a)(2) thereof, and that AKDS’s reliance on such exemption is predicated on the Holder’s
representations set forth herein. The Holder realizes that the basis for the exemption may not be present if, notwithstanding such
representations, the Holder has in mind merely acquiring Shares for a fixed or determinable period in the future, or for a market
rise, or for sale if the market does not rise. The Holder does not have any such intention.

 

     

     

    

 

(c)       The
Holder represents and warrants to the Company that it is an “accredited investor” within the meaning of Securities
and Exchange Commission Rule 501 of Regulation D, as presently in effect and, for the purpose of Section 25102(f) of the California
Corporations Code, he or she is excluded from the count of “purchasers” pursuant to Rule 260.102.13 thereunder.

 

5.   Conditions Precedent to the Obligations
of the Holder. The Holder’s obligations to effect the Closing is conditioned upon the fulfillment of each of the
following events:

 

5.1           Representations
and Warranties. The representations and warranties of AKDS contained herein shall be true and correct in all material respects
as of the date when made and as of the Closing Date as though made on and as of such date.

 

5.2           Performance.
AKDS shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing.

 

6.   Conditions Precedent to the Obligations
of AKDS. AKDS’s obligations to effect the Closing is conditioned upon the fulfillment of each of the following events:

 

6.1           Representations
and Warranties. The representations and warranties of the Holder contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made on and as of such date.

 

6.2           Performance.
The Holder shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing, including the delivery
of an Accredited Investor Questionnaire, attached hereto as Exhibit B.

 

7.   Miscellaneous.

 

7.1           No
Third Party Beneficiaries. Other than as expressly set forth herein, this Agreement shall not confer any rights or remedies
upon any person other than the parties and their respective successors and permitted assigns.

 

7.2           Entire
Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements, or representations by or among the parties, written or oral, to the extent they
related in any way to the subject matter hereof.

 

7.3           Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.

 

7.4           Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California (without regard
to conflict of laws).

 

     

     

    

 

7.5           No
Waiver/Amendments. Any waiver by any party to this Agreement of any provision of this Agreement shall not be construed as a
waiver of any other provision of this Agreement, nor shall such waiver be construed as a waiver of such provision respecting any
future event or circumstance. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing
and signed by both the Holder and AKDS.

 

7.6           Severability.
Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.

 

7.7           Costs.
Each party will bear the costs and expenses incurred by it in connection with this Agreement and the transaction contemplated thereby.

 

7.8           Survival
of Terms. All representations, warranties and covenants contained in this Agreement or in any certificates or other instruments
delivered by or on behalf of the parties hereto shall be continuous and survive the execution of this Agreement and the Closing.

 

7.9           Assignment.
AKDS may not assign this Agreement. This Agreement will be binding upon AKDS and its successors and will inure to the benefit of
the Holder and its successors and assigns and may be assigned by the Holder to anyone of its choosing without Company’s approval.

 

7.10         Notices.
Notices hereunder shall be given only by personal delivery, registered or certified mail, return receipt requested, overnight courier
service, or telex, telegram, facsimile or other form of electronic mail and shall be deemed transmitted when personally delivered
or deposited in the mail or delivered to a courier service or a carrier for electronic transmittal or electronically transmitted
by facsimile (as the case may be), postage or charges prepaid, and properly addressed to the particular party to whom the
notice is to be sent at the address on the signature page hereto (or at such other addresses as such party may designate by five
(5) calendar days’ advance written notice similarly given to each of the other parties hereto).

 

7.11         Headings.
The headings used in this Agreement are for convenience only and shall not by themselves determine the interpretation, construction
or meaning of this Agreement.

 

7.12         Attorneys’
Fees and Costs. In the event any party to this Agreement shall be required to initiate legal proceedings to enforce performance
of any term or condition of this Agreement, including, but not limited to, the interpretation of any term or provision hereof,
the payment of moneys or the enjoining of any action prohibited hereunder, the prevailing party shall be entitled to recover such
sums in addition to any other damages or compensation received, as will reimburse the prevailing party for reasonable attorneys’
fees and court costs incurred on account thereof (including, without limitation, the costs of any appeal) notwithstanding the nature
of the claim or cause of action asserted by the prevailing party.

 

[signature page to follow]

 

     

     

    

 

IN WITNESS WHEREOF,
the Holder and AKDS have caused this Agreement to be executed as of the date first above written.

 

	 	HOLDER:
	 	 	 
	 	By: 	 
	 	Name:
	 	 	 
	 	Address:

 

	 	ARKADOS GROUP, INC.
	 	 	 
	 	By: 	 
	 	Name: Terrence DeFranco
	 	Title: Chief Executive
Officer
	 	 	 
	 	Address:
	 	211 Warrant Street, Suite
320
	 	Newark, NJ 07103
	 	tmdefranco@arkadosgroup.com

 

     

     

    

 

Exhibit A

 

Wire Instructions

 

Name:

Address:

 

Bank:

Routing

Account

 

     

     

    

 

Exhibit B

 

Accredited Investor Quetionnaire

 

	Initial _______	I am an accredited investor, as indicated in the Accredited Investor Certification below.  (If this option is selected, complete and return the Accredited Investor Certification below by initialing all that apply.  If none apply, you are an unaccredited investor.)

 

	Initial _______	I am an unaccredited investor with such knowledge and experience in financial and business matters that I am capable of evaluating the merits and risks of the Offering.  (If this option is selected, you will need to complete and return an Investor Questionnaire, to be provided by the Company.)

 

	Initial _______	I am an unaccredited investor, and my purchaser representative has such knowledge and experience in financial and business matters that my purchaser representative is capable of evaluating the merits and risks of the Offering. (If this option is selected, you will need to complete an Investor Acknowledgment and your purchaser representative will need to complete a Purchaser Representative Questionnaire, both as to be provided by the Company.

 

ACCREDITED INVESTOR CERTIFICATION

 

For Individual Investors Only

(INITIAL where appropriate):

 

	Initial _______ 	I have a net worth of at least US$1 million either individually or through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership interest with my spouse. (For purposes of calculating your net worth under this paragraph, (a) your primary residence shall not be included as an asset; (b) indebtedness secured by your primary residence, up to the estimated fair market value of your primary residence at the time of your purchase of the securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of your purchase of the securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of your primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by your primary residence in excess of the estimated fair market value of your primary residence at the time of your purchase of the securities shall be included as a liability.)
	 	 
	Initial _______	I have had an annual gross income for the past two years of at least US$200,000 (or US$300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year.
	 	 
	Initial _______	I am a director or executive officer of Arkados Group, Inc.Exhibit
10.21

 

Confidential
Information Package

No.:
20170406-CW-019

 

SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT
(this “Agreement”), dated as of the 31th day of May, 2017, by and between ARKADOS
GROUP, INC., a Delaware corporation, with headquarters located at 211 Warren Street, Suite
320, Newark, NJ 07103 (the “Company”), and the undersigned with principal address set forth on the Purchaser Signature
and Subscription Page hereto (the “Purchaser”).

 

WHEREAS:

 

A. 
The Company and the Purchaser are executing and delivering this Agreement in reliance upon the Regulation S or Regulation D exemption
from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange
Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”), or under Section
4(a)(2) of the 1933 Act;

 

B.
  The Purchaser is the holder of that certain Promissory Note issued by the Company to Purchaser on March 17, 2017 in
the principal amount of $100,000, as amended on April 20, 2017 (the “Note”), of which approximately $101,932 of principal
and interest remains outstanding (calculated as of May 12, 2017);

 

C.
  The Company desires to issue to the Purchaser Offered Units (as defined below) in exchange for the settlement, cancellation
and termination of all obligations and rights under the Note, including the payment of any penalties and interest and obligations
of the Company, accrued and owing under the Note (collectively, the “Note Obligations”) and a release of all claims
related thereto by the Purchaser, as provided herein.

 

D.  As
full and complete settlement of all Note Obligations and in consideration for the fulfillment of the covenants and promises set
forth herein, the Company agrees to issue to the Purchaser, upon the terms and conditions set forth in this Agreement, such number
of shares of common stock, par value $0.0001 of the Company (the “Common Stock”), set forth on the Purchaser Signature
and Subscription Page, as well as a warrant to acquire such equal number of shares of common stock at an exercise price of $0.60
per share (the “Warrant” and the shares of Common Stock issuable upon exercise of the Warrant, collectively, the “Warrant
Shares”). Such shares of Common Stock together with the Warrant Shares shall be referred to hereinafter as the “Offered
Units”).

 

NOW
THEREFORE, in consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.           Closing.

 

a.  
Settlement Issuance. As full and complete settlement of all Note Obligations and in consideration for the fulfillment of
the covenants and promises set forth herein, the Company agrees to issue to the Purchaser on the Closing Date (as defined below)
the Offered Units (the “Settlement Issuance”). Upon the issuance to the Purchaser of the Offered Units, all Note Obligations
shall be deemed fully satisfied and paid in full and the shall terminate immediately thereon. The Purchaser expressly acknowledges
and agrees that the Settlement Issuance (a) is the result of good faith negotiations conducted by and between the parties; (b)
resolves all claims by the Purchaser relating to the Note Obligations; and (c) constitutes fair and reasonable consideration for
the general release of claims set forth below. The Purchaser shall be solely responsible for any federal, state and local taxes
due on the Settlement Issuance, and specifically agrees to indemnify and hold the Company harmless for any claims involving federal,
state or local taxes resulting from such responsibility.

 

     

     

    

 

b.  Closing.
Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 5 and Section 6 below, the
date and time of the issuance of the Offered Units pursuant to this Agreement (the “Closing Date”) shall be 5:00
p.m., Eastern Daylight Time on or about May 31, 2017, or such other mutually agreed upon time. The closing of the
transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as
may be agreed to by the parties. On the Closing Date, the Company shall deliver instructions to its transfer agent to issue
the Common Stock to Purchaser and shall likewise promptly issue the Warrants accompanying such purchased Common Stock to
Purchaser. On or prior to the Closing Date, the Purchaser shall deliver to the Company the original Note for cancellation by
the Company; provided, however, the Purchaser hereby acknowledges and agrees that the cancellation, release and
extinguishment of the Note shall be effective upon the Closing regardless of whether such original Note is delivered to and
cancelled by the Company.

 

c.  
General Release and Waiver.

 

(i)          Except
as expressly set forth in this Agreement, for and in consideration of the mutual covenants set forth herein, which are hereby
excluded from and survive this general release and waiver, the Purchaser, on his own behalf, and on behalf of his respective grantees,
agents, spouses, children, beneficiaries, successors, attorneys, heirs, devisees, trustees, assigns, attorneys, entities in which
the Purchaser has an interest, and any other person claiming through or on behalf of him (collectively, the “Releasing
Parties”), hereby fully, irrevocably and unconditionally releases, acquits, and discharges
the Company and each of its direct or indirect parents, wholly or majority- owned subsidiaries, affiliated and related entities,
predecessors, successors and assigns, partners, privities, and any of its present and former directors, officers, employees, shareholders,
partners, agents, alter egos, representatives, attorneys, accountants, insurers, receivers, heirs, executors, administrators,
conservators, and all persons acting by, through, under or in concert with it, or any of them (collectively “Released
Parties”) from all manner of actions, causes of action, complaints, claims, demands,
liens, suits, obligations, controversies, contracts, agreements, promises, charges, penalties, losses, debts, costs, attorneys’
fees, expenses, damages, judgments, orders, and liabilities of whatever kind, whether in law or in equity, now known or unknown,
suspected or unsuspected, fixed or contingent, and whether or not concealed, latent or hidden, which have existed or may have
existed, or which do exist or which hereafter can, shall, or may exist, whether contractual, common law, statutory, federal, state,
or otherwise, which the Purchaser or any of the Releasing Parties have or could have against the Company or the Released
Parties relating to the Note or the Note Obligations (collectively, the “Released Claims”).
The Purchaser and the Releasing Parties hereby acknowledge and agree that, except as expressly set forth in this Agreement, the
Released Parties have no other liabilities or obligations, of any kind or nature, owed to the Releasing Parties, in connection
with or relating to the Released Claims or otherwise.

 

    2 

     

    

 

(ii)
         The Purchaser, on behalf of himself, as well as the Releasing Parties, expressly
acknowledges that the releases provided in this Agreement are intended to include in their effect, without limitation, any and
all claims, complaints, charges or suits, including those claims, complaints, charges or suits which he does not know or suspect
to exist in his favor at the time of execution hereof, which if known or suspected, could materially affect his decision to execute
this Agreement. This Agreement contemplates the extinguishment of any such claims, complaints, charges or suits and the Purchaser
hereby expressly and knowingly waives and relinquishes any and all rights that he has or might have relating to the Released Claims
under California Civil Code §1542 (and under other statutes or common law principles of similar effect) which provides:

 

A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

The
Purchaser acknowledges that he may hereafter discover facts different from, or in addition to, those which he now believes to
be true with respect to the Released Claims above. On his own behalf and on behalf of the Releasing Parties, the Purchaser agrees
that the foregoing release and waiver shall be and remain effective in all respects notwithstanding such different or additional
facts or discovery thereof, and that this Agreement contemplates the extinguishment of all such Released Claims. By executing
this Agreement, the Purchaser acknowledges the following: (a) he is represented by counsel; (b) he has read and fully understands
the provisions of California Civil Code §1542; and (c) he has been specifically advised by his counsel of the consequences
of the above waiver and this Agreement generally. The Purchaser acknowledges and agrees that this waiver is an essential and material
term of this release and the settlement that underlies it and that without such waiver the Agreement would not have been accepted.

 

2.       Purchaser’s
Representations and Warranties. The Purchaser represents and warrants to the Company, as of the Closing, that:

 

a.  
Investment Purpose. The Purchaser is purchasing the Offered Units for its own account and not with a present view towards
the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act.

 

    3 

     

    

 

b.  
Accredited Investor Status. The Purchaser (i) an “accredited investor” as that term is defined in Rule 501
of the General Rules and Regulations under the 1933 Act by reason of Rule 501(a)(3) (an “Accredited Investor”), (ii)
experienced in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason of
the business and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with or
compensated in any way by the Company or any of its affiliates or selling agents), to protect its own interests in connection
with the transactions described in this Agreement, and the related documents, and (iv) able to afford the entire loss of its investment
in the Offered Units.

 

c.
  Reliance on Exemptions. The Purchaser understands that the Offered Units are being offered and sold to it in
reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that
the Company is relying upon the truth and accuracy of, and the Purchaser’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchaser to acquire the Offered Units.

 

d.
  Information. The Purchaser and its advisors, if any, have been furnished with all materials relating to the
business, finances and operations of the Company and materials relating to the offer and sale of the Offered Units which have
been requested by the Purchaser. Without limiting the generality of the foregoing, Buyer has also had the opportunity to obtain
and to review the Company’s most recent Annual Report on Form 10-K for the fiscal year ended May 31, 2016, and most recent
Quarterly Report on Form 10-Q for the quarter ended February 28, 2017 (collectively, the “SEC Documents”). The Purchaser
and its advisors, if any, have been afforded the opportunity to ask questions of the Company and to promptly receive answers to
those questions. Notwithstanding the foregoing, the Company has not disclosed to the Purchaser any material nonpublic information
and will not disclose such information unless such information is disclosed to the public prior to or promptly following such
disclosure to the Purchaser, or unless Purchaser enters into a non-disclosure agreement with the Company agreeing to maintain
the confidentiality of the such information. Neither such inquiries nor any other due diligence investigation conducted by Purchaser
or any of its advisors or representatives shall modify, amend or affect Purchaser’s right to rely on the Company’s
representations and warranties contained in Section 3 below. The Purchaser understands that its investment in the Offered Units
involves a significant degree of risk.

 

e.  
Governmental Review. The Purchaser understands that no United States federal or state agency or any other government or
governmental agency has passed upon or made any recommendation or endorsement of the purchase or sale of the Offered Units.

 

    4 

     

    

 

f.   
Transfer or Re-sale. The Purchaser understands that (i) the sale or re-sale of the Offered Units has not been and is not
being registered under the 1933 Act or any applicable state securities laws, and the Offered Units may not be transferred
unless (a) the Offered Units are sold pursuant to an effective registration statement under the 1933 Act, (b) the Purchaser
shall have delivered to the Company, at the cost of the Purchaser, an opinion of counsel that shall be in form, substance and
scope customary for opinions of counsel in comparable transactions to the effect that the Offered Units to be sold or transferred
may be sold or transferred pursuant to an exemption from such registration, which opinion shall be reasonably acceptable to the
Company, (c) the Offered Units are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under
the 1933 Act (or a successor rule) (“Rule 144”)) of the Purchaser who agrees to sell or otherwise transfer the Offered
Units only in accordance with this Section 2(g) and who is an Accredited Investor, (d) the Offered Units are sold pursuant to
Rule 144, or (e) the Offered Units are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation
S”), and the Purchaser shall have delivered to the Company, at the cost of the Purchaser, an opinion of counsel that shall
be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be reasonably
acceptable to the Company; (ii) any sale of such Offered Units made in reliance on Rule 144 may be made only in accordance with
the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Offered Units under circumstances in which
the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933
Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and
(iii) neither the Company nor any other person is under any obligation to register such Offered Units under the 1933 Act or any
state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case).

 

g.  
Legends. The Purchaser understands that the Offered Units may only be sold pursuant to Rule 144, or Regulation S without
any restriction as to the number of securities as of a particular date that can then be immediately sold and the shares of Common
Stock and the Warrant Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may
be placed against transfer of the certificates for such securities):

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT WITH RESPECT TO THE SECURITIES OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT THAT IS THEN APPLICABLE
TO THE SECURITIES, AS TO WHICH A PRIOR OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER OR TRANSFER AGENT MAY BE REQUIRED.”

 

    5 

     

    

 

The
legend set forth above shall be removed, and the Company shall issue a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for
sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation
S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such
holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act,
which opinion shall be reasonably acceptable to the Company so that the sale or transfer is effected.

 

h. 
 Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed
and delivered on behalf of the Purchaser, and this Agreement constitutes a valid and binding agreement of the Purchaser enforceable
in accordance with its terms.

 

i.   
Investment Risk. Purchaser understands that Purchaser’s investment in the Offered Units constitutes a high risk investment,
and involves a high degree of risk, including the risk of loss of the Purchaser’s entire investment.

 

j.   
Residency. The state in which any offer to sell securities hereunder was made to or accepted by the Purchaser is the state
shown as the Purchaser’s address contained herein, and Purchaser is a resident of such state only.

 

    6 

     

    

 

3.      Representations
and Warranties of the Company. The Company represents and warrants to the Purchaser, except as set forth in the Disclosure
Schedule delivered herewith, which disclosures are in incorporated herein by reference, that:

 

a.  
Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under
the laws of Delaware, with full power and authority (corporate and other) to own, lease, use and operate its properties and to
carry on its business as and where now owned, leased, used, operated and conducted. Each of the Subsidiaries (as defined below),
if any, of the Company is a corporation or other form of business entity duly organized, validly existing and in good standing
under the laws of its jurisdiction or organization, with full power and authority (corporate and other) to own, lease, use and
operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. The Company
and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction
in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except
where the failure to be so qualified or in good standing would not have a Material Adverse Effect. “Material Adverse Effect”
means any material adverse effect on the business, operations, assets or financial condition of the Company or its Subsidiaries,
if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in
connection herewith. “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated,
in which the Company owns, directly or indirectly, any equity or other ownership interest.

 

b.
Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this
Agreement, and to consummate the transactions contemplated hereby and thereby and to issue the Offered Units, in accordance with
the terms hereof, (ii) the execution and delivery of this Agreement, the Offered Units by the Company and the consummation by
it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Offered Units) have
been duly authorized by the Company’s Board of Directors, (iii) this Agreement has been duly executed and delivered by the
Company by its authorized representative, and such authorized representative is the true and official representative with authority
to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this
Agreement constitutes, and upon execution and delivery by the Company of the Offered Units, each of such instruments will constitute,
a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms subject as to
enforceability to general principles of equity and to bankruptcy, insolvency, moratorium, and other similar laws affecting the
enforcement of creditors’ rights generally.

 

    7 

     

    

 

c.
Capitalization. As of the date hereof, the authorized capital stock of the Company consists of: (i) 600,000,000 shares
of Common Stock, $0.0001 par value per share and (ii) 5,000,000 shares of Preferred Stock, $0.0001 par value per share, of which
no shares are issued and outstanding. All of such outstanding shares of capital  stock are, or upon issuance will be,
duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive
rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions
or failure to act of the Company. As of the effective date of this Agreement, except for those disclosed in the Company’s
filed reports with the SEC and options that may be issued to executives of the Company (i) there are no other outstanding options,
warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments
or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of
capital stock of the Company or any of its Subsidiaries, or, with the exception of pending obligations to issue incentive options
to executive officers of the Company pursuant to employment contracts, no arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries that are not mentioned
here, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register
the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered
by the issuance of the Offered Units that are not contained here. The Company has made available to the Purchaser true and correct
copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”),
and the Company’s By-laws, as in effect on the date hereof (the “By-laws”).

 

d.
Issuance of Shares. The Common Stock is duly authorized and will be validly issued, fully paid and non-assessable, and
free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

 

e. No
Conflicts. The execution, delivery and performance of this Agreement, the Offered Units by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby will not (i) conflict with or result in a
violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a
breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a
default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and
regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject)
applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). There are no
required consents, authorizations or orders of, or filings or registrations with, any court, governmental agency, regulatory
agency, self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of
its obligations under this Agreement, to issue the Offered Units. All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or
prior to the date hereof.

 

    8 

     

    

 

f.
SEC Documents; Financial Statements. The Company is subject to the reporting requirements of the 1934 Act. The Company
is current on its reporting obligations with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “1934
Act”). As of their respective dates, any reports filed within the last fiscal year, as amended, complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of such reports, as amended, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in
the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States
generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material
respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments).

 

g.
Absence of Certain Changes. Since February 28, 2017, when viewed from the perspective of the Company and its Subsidiaries
taken as a whole, there has been no Material Adverse Effect on the Company or any of its Subsidiaries.

 

h.
Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect.

 

i.
Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to
use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications,
service marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct
its business as now operated (and, as presently contemplated to be operated in the future); there is no claim or action by any
person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right of the
Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future).

 

    9 

     

    

 

j.
Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other
tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that
the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid
and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown
or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside
on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim. The Company has not executed a waiver with respect to the statute
of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s
tax returns is presently being audited by any taxing authority, nor is the Company subject to any tax investigation by any governmental
agency.

 

k.
Certain Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries
makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could
obtain from third parties and other than the grant of stock options to officers of the Company, none of the officers, directors,
or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (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, or otherwise requiring payments to or from
any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

 

l.
Disclosure. There is no fact known to the Company (other than general economic conditions known to the public generally
or as disclosed in the SEC Documents) that has not been disclosed in writing to the Purchaser that would reasonably be expected
to have a Material Adverse Effect.

 

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

 

    10 

     

    

 

n.
No Integrated Offering. 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 in any security or solicited any offers to buy any security under circumstances
that would require registration under the 1933 Act of the issuance of the Offered Units to the Purchaser. The issuance of the
Offered Units to the Purchaser will not be integrated with any other issuance of the Company’s securities (past, current
or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

 

o.
No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions,
transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

 

p.
Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and
operate its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”),
and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of
the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of
the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Since February 28, 2017, neither the Company nor any of its Subsidiaries
has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices
relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse
Effect.

 

q.
Environmental Matters. The Company is in compliance with all applicable Environmental Laws in all respects except where
the failure to comply does not have and could not reasonably be expected to have a Material Adverse Effect. For purposes of the
foregoing:

 

“Environmental
Laws” means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,
the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances Control
Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, any other “Superfund” or “Superlien”
law or any other applicable federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, the environment or any
Hazardous Material.

 

    11 

     

    

  

“Hazardous
Material” means and includes any hazardous, toxic or dangerous waste, substance or material, the generation, handling, storage,
disposal, treatment or emission of which is subject to any Environmental Law.

 

r.
Title to Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and
good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries,
in each case free and clear of all liens, encumbrances and defects or such as would not have a Material Adverse Effect. Any real
property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as would not have a Material Adverse Effect.

 

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

 

t.
Internal Accounting Controls. The Company maintains a system of internal accounting controls sufficient, in the judgment
of the Company’s board of directors, 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 generally accepted accounting principles 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.

 

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

 

    12 

     

    

 

v.
No Investment Company. The Company is not, and upon the issuance and sale of the Offered Units as contemplated by this Agreement
will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an
“Investment Company”).

  

4.     
COVENANTS.

 

a.
Best Efforts. The parties shall use their reasonable best efforts to satisfy timely each of the conditions described in
Section 5 and 6 of this Agreement.

 

b.
Form D; Blue Sky Laws. Unless it believes it is exempt from any such filings, the Company agrees to file a Form D with
respect to the Offered Units as required under Regulation D and to provide a copy thereof to the Purchaser promptly after such
filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary
to qualify the Offered Units for sale to the Purchaser at the applicable closing pursuant to this Agreement under applicable securities
or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall
provide evidence of any such action so taken to the Purchaser on or prior to the Closing Date.

 

c.
Use of Proceeds. The Company shall use the proceeds for general working capital purposes, including legal and accounting
expenses related to SEC filings.

 

d.
Listing. The Company will comply in all respects with the Company’s reporting, filing and other obligations under
the bylaws or rules to maintain listing on the pink sheets or any equivalent replacement exchange, as applicable.

 

e.
No Integration. The Company shall not knowingly make any offers or sales of any security (other than the Offered Units)
under circumstances that would require registration of the securities being offered or sold hereunder under the 1933 Act
or cause the offering of the securities to be integrated with any other offering of securities by the Company for the purpose
of any stockholder approval provision applicable to the Company or its securities.

 

5.     
REGISTRATION RIGHTS.

 

a.
As promptly as possible, and in any event on or prior to the date that is seventy four (74) days after the Closing Date (the “Initial
Filing Date”), the Company shall prepare and file with the SEC a Registration Statement covering the resale of all of
the Common Stock and the Warrant Shares issued or issuable pursuant to the Transaction Documents (collectively, the “Registrable
Securities”), without taking into account any securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing Registrable Securities for an offering to be made
on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another
appropriate form in accordance with the 1933 Act and the 1934 Act) and shall contain (except if otherwise requested by the
SEC) the “Plan of Distribution” in substantially the form attached hereto as Annex B. To the extent the staff
of the SEC does not permit all of the Registrable Securities to be registered on the initial Registration Statement filed pursuant
to this Section 5(a) (the “Initial Registration Statement”), the Company shall file additional Registration
Statements (each an “Additional Registration Statement”), as promptly as possible, and in any event on or prior
to the Additional Filing Date, successively trying to register on each such Additional Registration Statement the maximum number
of remaining Registrable Securities until all of the Registrable Securities have been registered with the SEC.

 

    13 

     

    

 

b.
The Company shall use its commercially reasonable efforts to cause each Registration Statement to be declared effective by the
SEC as promptly as possible after the filing thereof, but in any event prior to the applicable Required Effectiveness Date, and
shall use its commercially reasonable efforts to keep the Registration Statement continuously effective under the 1933 Act until
the earlier of the date that all Registrable Securities covered by such Registration Statement have been sold or can be sold publicly
without restriction or limitation under Rule 144 (including, without limitation, the requirement to be in compliance with Rule
144(c)(1)) (the “Effectiveness Period”); provided that, upon notification by the SEC that a Registration Statement
will not be reviewed or is no longer subject to further review and comments, the Company shall request acceleration of such Registration
Statement within three (3) Trading Days after receipt of such notice and request that it becomes effective on 4:00 p.m. New York
City time on the Effective Dave and file a prospectus supplement for any Registration Statement, whether or not required under
Rule 424 (or otherwise), by 9:00 a.m. New York City time the day after the Effective Date.

 

c.
The Company shall notify the Purchasers in writing promptly (and in any event within two Trading Days) after receiving notification
from the SEC that a Registration Statement has been declared effective.

 

d.
Should an Event (as defined below) occur, then upon the occurrence of such Event, and on every monthly anniversary thereof until
the applicable Event is cured, the Company shall pay to each Purchaser an amount in cash, as liquidated damages and not as a penalty,
equal to one percent (1.0%) of the aggregate Purchase Price of the Registrable Securities then held by the Purchaser; provided,
however, that the total amount of payments pursuant to this Section 5(d) shall not exceed, when aggregated with all such payments
paid to all Purchasers, ten percent (10%) of the aggregate Purchase Price hereunder. The payments to which a Purchaser shall be
entitled pursuant to this Section 5(d) are referred to herein as “Event Payments.” Any Event Payments payable
pursuant to the terms hereof shall apply on a pro-rated basis for any portion of a month prior to the cure of an Event. All pro-rated
calculations made pursuant to this paragraph shall be based upon the actual number of days in such pro-rated month. Each of the
following shall constitute an “Event”:

 

    14 

     

    

 

(i)
a Registration Statement is not filed on or prior to its Filing Date or is not declared effective on or prior to its Required
Effectiveness Date or does not register all Registrable Securities; provided that if the SEC, by written or oral comment or otherwise,
limits the Company’s ability to request effectiveness, or prohibits the effectiveness of, a Registration Statement with
respect to any or all the Registrable Securities pursuant to Rule 415, it shall not be a breach or default by the Company under
this Agreement and shall not be deemed a failure by the Company to use reasonable best efforts;

 

(ii)
except as provided for in Section 5(e) (the “Excluded Events”), after the Effective Date of a Registration Statement,
a Purchaser is not permitted to sell Registrable Securities under the Registration Statement (or a subsequent Registration Statement
filed in replacement thereof) for any reason (other than the fault of such Purchaser) for five (5) or more Trading Days (whether
or not consecutive);

 

(iii)
except as a result of the Excluded Events, the Common Stock is not listed or quoted, or is suspended from trading, on an Eligible
Market for a period of three Trading Days (which need not be consecutive Trading Days) during the Effectiveness Period; and

 

(iv)
at any time during the period commencing from the six (6) month anniversary of the Closing Date and ending at the termination
of the Effectiveness Period, if a Registration Statement is not available for the resale of all of the Registrable Securities
and the Company shall fail for any reason to satisfy the current public information requirement under Rule 144(c); provided, that
Event Payments on the Registrable Securities may not accrue under more than one of the foregoing clauses (i), (ii), (iii) and
(iv), at any one time; and provided further, that (1) upon the filing of the Registration Statement as required hereunder (in
the case of Section 5(d)(i)), (2) upon the effectiveness of a Registration Statement as required hereunder (in the case of Section 5(d)(ii)),
(3) upon the resumed trading of the Common Stock (in the case of Section 5(d)(iii)), or (4) upon the resumption of a Purchasers
ability to resell the Registrable Securities under an effective Registration Statement or the Company’s satisfaction of
the current public information requirement under Rule 144(c) of the Securities Act (in the case of Section 5.1(d)(iv)), Event
Payments on the Registrable Securities as a result of such clause shall cease to accrue. It is understood and agreed that, notwithstanding
any provision to the contrary, no Event Payments shall accrue on any Registrable Securities that are then covered by, and may
be sold under, an effective Registration Statement.

 

e.
Notwithstanding anything in this Agreement to the contrary:

 

(i)      
notwithstanding Section 5, the Company, upon written notice to the Purchasers, shall be permitted to suspend the availability
of a Registration Statement covering the Registrable Securities for any bona fide reason whatsoever for up to 15 consecutive days
(the “Deferral Period”) in any 90-day period without being obligated to pay liquidated damages; provided, that
Deferral Periods may not total more than 45 days in the aggregate in any twelve-month period. The Company shall not be required
to specify in the written notice to the Purchasers the nature of the event giving rise to the Deferral Period; and

 

    15 

     

    

 

(ii)      
the Company may, by written notice to the Purchasers, suspend sales under a Registration Statement after the Effective Date thereof
and/or require that the Purchasers immediately cease the sale of shares of Common Stock pursuant thereto and/or defer the filing
of any subsequent Registration Statement if the Company is engaged in a material merger, acquisition or sale and the Board of
Directors determines in good faith, by appropriate resolutions, that, as a result of such activity, (A) it would be materially
detrimental to the Company (other than as relating solely to the price of the Common Stock) to maintain a Registration Statement
at such time or (B) it is in the best interests of the Company to suspend sales under such registration at such time. Upon receipt
of such notice, each Purchaser shall immediately discontinue any sales of Registrable Securities pursuant to such registration
until such Purchaser is advised in writing by the Company that the current Prospectus or amended Prospectus, as applicable, may
be used. In no event, however, shall this right be exercised to suspend sales beyond the period during which (in the good faith
determination of the Company’s Board of Directors) the failure to require such suspension would be materially detrimental
to the Company. The Company’s rights under this Section 5(e) may be exercised for a period of no more than 20 calendar days
at a time and not more than three times in any twelve-month period, without such suspension being considered as part of an Event
Payment determination. Immediately after the end of any suspension period under this Section 5(e), the Company shall take all
necessary actions (including filing any required supplemental prospectus) to restore the effectiveness of the applicable Registration
Statement and the ability of the Purchasers to publicly resell their Registrable Securities pursuant to such effective Registration
Statement.

 

f. Registration
Procedures. In connection with the Company’s registration obligations hereunder, the Company shall:

 

(i)
       Not less than three Trading Days prior to the filing of a Registration Statement or
any related Prospectus or any amendment or supplement thereto, furnish via email to those Purchasers who have supplied the Company
with email addresses copies of all such documents proposed to be filed (or at the request of one or more Purchasers, only certain
sections thereof), which documents (other than any document that is incorporated or deemed to be incorporated by reference therein)
will be subject to the review of such Purchasers. The Company shall reflect in each such document when so filed with the SEC such
comments regarding the Purchasers and the plan of distribution as the Purchasers may reasonably and promptly propose no later
than two Trading Days after the Purchasers have been so furnished with copies of such documents as aforesaid.

 

    16 

     

    

 

(ii)       (A)
Subject to Section 5(e), prepare and file with the SEC such amendments, including post-effective amendments, to each Registration Statement
and the Prospectus used in connection therewith as may be necessary to keep the Registration Statement continuously effective,
as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the SEC such additional Registration
Statements in order to register for resale under the Securities Act all of the Registrable Securities; (B) cause the related Prospectus
to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424; and (C) comply in all material respects with the provisions of the 1933 Act and the 1934 Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement during the applicable period in accordance with
the intended methods of disposition by the Purchasers thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.

 

(iii)
     Notify the Purchasers as promptly as reasonably possible, and if requested by the Purchasers, confirm
such notice in writing no later than two Trading Days thereafter, of any of the following events: (i) the SEC notifies the Company
whether there will be a “review” of any Registration Statement; (ii) any Registration Statement or any post-effective
amendment is declared effective; (iii) the SEC issues any stop order suspending the effectiveness of any Registration Statement
or initiates any Proceedings for that purpose; (iv) the Company receives notice of any suspension of the qualification or exemption
from qualification of any Registrable Securities for sale in any jurisdiction, or the initiation or threat of any Proceeding for
such purpose; or (v) the financial statements included in any Registration Statement become ineligible for inclusion therein or
any Registration Statement or Prospectus or other document contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

(iv)    
Use its commercially reasonable efforts to avoid the issuance of or, if issued, obtain the withdrawal of (i) any order suspending
the effectiveness of any Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification)
of any of the Registrable Securities for sale in any jurisdiction, as soon as possible.

 

(v)     
If requested by a Purchaser, provide such Purchaser, without charge, at least one conformed copy of each Registration Statement
and each amendment thereto, including financial statements and schedules, and all exhibits to the extent requested by such Purchaser
(including those previously furnished or incorporated by reference) promptly after the filing of such documents with the SEC.

 

(vi)
    Promptly deliver to each Purchaser, without charge, as many copies of the Prospectus or Prospectuses (including
each form of prospectus) and each amendment or supplement thereto as such Purchaser may reasonably request. The Company hereby
consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Purchasers in connection
with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto
to the extent permitted by federal and state securities laws and regulations.

 

    17 

     

    

 

(vii)     (A)
In the time and manner required by each Trading Market on which the Common Stock is listed, prepare and file with such Trading
Market an additional shares listing application covering all of the Registrable Securities; (B) take all steps necessary to cause
such Registrable Securities to be approved for listing on each such Trading Market as soon as possible thereafter; (C) provide
to each Purchaser evidence of such approval; and (D) except as a result of the Excluded Events, during the Effectiveness Period,
maintain the listing of such Registrable Securities on each such Trading Market or another Eligible Market.

 

(viii)
  Prior to any public offering of Registrable Securities, use its commercially reasonable efforts to register or qualify
or cooperate with the selling Purchasers in connection with the registration or qualification (or exemption from such registration
or qualification) of such Registrable Securities for offer and sale under the securities or “blue sky” laws of such
jurisdictions within the United States as any Purchaser requests in writing, to keep each such registration or qualification (or
exemption therefrom) effective for so long as required, but not to exceed the duration of the Effectiveness Period, and to do
any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by a Registration Statement; provided , however , that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise
so subject.

 

(ix)     
Cooperate with the Purchasers to facilitate the timely preparation and delivery of certificates representing Registrable Securities
to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted
by this Agreement and under law, of all restrictive legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Purchasers may reasonably request.

 

(x)
      Upon the occurrence of any event described in Sections 5(f)(iii), (iv) or (v) , as promptly
as reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will
contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made, not misleading,

 

    18 

     

    

 

(xi)
   Cooperate with any reasonable due diligence investigation undertaken by the Purchasers in connection with the
sale of Registrable Securities, including, without limitation, by making available documents and information; provided that
the Company will not deliver or make available to any Purchaser material, nonpublic information.

 

(xii)     Comply
with all rules and regulations of the SEC applicable to the registration of the Registrable Securities.

 

(xiii)   
It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with
respect to the Registrable Securities of any particular Purchaser or to make any Event Payments set forth in Section 5(c) to such
Purchaser that the intended method of disposition of the Registrable Securities held by it (if different from the Plan of Distribution
set forth on Exhibit B hereto) as shall be reasonably required to effect the registration of such Registrable Securities and shall
complete and execute such documents in connection with such registration as the Company may reasonably request.

 

(xiv)   
The Company shall comply with all applicable rules and regulations of the SEC under the Securities Act and the Exchange Act, including,
without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement or amendment thereof,
with the SEC pursuant to Rule 424 under the Securities Act, promptly inform the Purchasers in writing if, at any time during the
Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Purchasers
are required to make available a Prospectus in connection with any disposition of Registrable Securities and take such other actions
as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.

 

(xv)
    Not identify any Purchaser as an underwriter without its prior written consent in any public disclosure
or filing with the SEC, the Trading Market or any Eligible Market and any Purchaser being deemed an underwriter by the SEC shall
not relieve the Company of any obligations it has under this Agreement; provided , however , that the foregoing shall not prohibit
the Company from including the disclosure found in the “Plan of Distribution” section attached hereto as Annex
B in the Registration Statement. In addition, and notwithstanding anything to the contrary contained herein, if the Company
has received a comment by the SEC requiring an Purchaser to be named as an underwriter in the Registration Statement (which notwithstanding
the reasonable best efforts of the Company is not withdrawn by the SEC) and such Purchaser elects in writing not to be named as
a selling stockholder in the Registration Statement, the Purchaser shall not be entitled to any Event Payments with respect to
such Registration Statement.

 

g.
Registration Expenses. The Company shall pay all fees and expenses incident to the performance of or compliance with Section
5 of this Agreement by the Company, including without limitation (i) all registration and filing fees and expenses, including
without limitation those related to filings with the SEC, any Trading Market, any required filing with the Financial Industry
Regulatory Authority by the  Agents (but not any Purchaser), and in connection with applicable state securities or blue
sky laws, (ii) printing expenses (including without limitation expenses of printing certificates for Registrable Securities),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) fees and expenses
of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement,
and (vi) all listing fees to be paid by the Company to the Trading Market.

 

    19 

     

    

 

h.
Indemnification.

 

(i)       
Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold
harmless each Purchaser, the officers, directors, partners, members, agents and employees of each of them, each Person who controls
any such Purchaser (within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act) and the officers, directors,
partners, members, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from
and against any and all Losses, as incurred, arising out of or relating to (A) any misrepresentation or breach of any representation
or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby
or thereby, (B) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any
other certificate, instrument or document contemplated hereby or thereby, (C) any cause of action, suit or claim brought or made
against such Indemnified Party (as defined in Section 5(h)(iii) below) by a third party (including for these purposes a derivative
action brought on behalf of the Company), arising out of or resulting from (x) execution, delivery, performance or enforcement
of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (y) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or
(z) the status of Indemnified Party as holder of the Securities or (D) any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of Company prospectus or in any amendment or supplement thereto
or in any Company preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus
or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but
only to the extent, that (1) such untrue statements, alleged untrue statements, omissions or alleged omissions are based solely
upon information regarding such Purchaser furnished in writing to the Company by such Purchaser for use therein, or to the extent
that such information relates to such Purchaser or such Purchaser’s proposed method of distribution of Registrable Securities
and was reviewed and expressly approved by such Purchaser expressly for use in the Registration Statement, or (2) with respect
to any prospectus, if the untrue statement or omission of material fact contained in such prospectus was corrected on a timely
basis in the prospectus, as then amended or supplemented, if such corrected prospectus was timely made available by the Company
to the Purchaser, and the Purchaser seeking indemnity hereunder was advised in writing not to use the incorrect prospectus
prior to the use giving rise to Losses.

 

    20 

     

    

 

(ii)
      Indemnification by Purchasers. Each Purchaser shall, severally and not jointly, indemnify
and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the 1933 Act and Section 20 of the 1934 Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses (as determined by a court
of competent jurisdiction in a final judgment not subject to appeal or review) arising solely out of any untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising out of or relating to any omission of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances
under which they were made) not misleading, but only to the extent that such untrue statement or omission is contained in any
information so furnished by such Purchaser in writing to the Company specifically for inclusion in such Registration Statement
or such Prospectus or to the extent that (i) such untrue statements or omissions are based solely upon information regarding such
Purchaser furnished to the Company by such Purchaser in writing expressly for use therein, or to the extent that such information
relates to such Purchaser or such Purchaser’s proposed method of distribution of Registrable Securities and was reviewed
and expressly approved by such Purchaser expressly for use in the Registration Statement (it being understood that the Plan of
Distribution set forth on Annex B constitutes information reviewed and expressly approved by such Purchaser in writing
expressly for use in the Registration Statement), such Prospectus or such form of Prospectus or in any amendment or supplement
thereto. In no event shall the liability of any selling Purchaser hereunder be greater in amount than the dollar amount of the
net proceeds received by such Purchaser upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

(iii)      Conduct
of Indemnification Proceedings.

 

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

 

    21 

     

    

 

(B)
An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the
Indemnifying Party has agreed in writing to pay such fees and expenses; or (2) the Indemnifying Party shall have failed within
45 days of receiving notification of a Proceeding from an Indemnified Party to assume the defense of such Proceeding and to employ
counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified
Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to
assume the defense thereof and the reasonable fees and expenses of separate counsel shall be at the expense of the Indemnifying
Party). It being understood, however, that the Indemnifying Party shall not, in connection with any one such Proceeding (including
separate Proceedings that have been or will be consolidated before a single judge) be liable for the fees and expenses of more
than one separate firm of attorneys at any time for all Indemnified Parties, which firm shall be appointed by a majority of the
Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its
written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent
of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party,
unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject
matter of such Proceeding.

 

(C)
All reasonable fees and documented expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall
be paid to the Indemnified Party, as incurred, within 20 Trading Days of written notice thereof to the Indemnifying Party
(regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided,
that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent
it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder.

 

    22 

     

    

 

(iv)
Contribution. If a claim for indemnification under Section 5(h)(i) or (ii) is unavailable to an Indemnified Party (by reason
of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute
to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue
or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by,
or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by
a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(h)(iii), any reasonable
attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 5 was available
to such party in accordance with its terms. The parties hereto agree that it would not be just and equitable if contribution pursuant
to this Section 5(h)(iv) were determined by pro rata allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section
5(h)(iv), no Purchaser shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net
proceeds actually received by such Purchaser from the sale of the Registrable Securities subject to the Proceeding exceeds the
amount of any damages that such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

(v)
Additional Liability. The indemnity and contribution agreements contained in this Section 5 are in addition to any liability
that the Indemnifying Parties may have to the Indemnified Parties.

 

i.     
Dispositions. Each Purchaser agrees that it will comply with the prospectus delivery requirements of the Securities Act
as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement and shall sell its
Registrable Securities in accordance with the Plan of Distribution set forth in the Prospectus. Each Purchaser further agrees
that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Sections 5.2(f)(iii),
(iv) or (v), such Purchaser will discontinue disposition of such Registrable Securities under the Registration Statement until
such Purchaser is advised in writing by the Company that the use of the Prospectus, or amended Prospectus, as applicable, may
be used. The Company may provide appropriate stop orders to enforce the provisions of this paragraph. Each Purchaser, severally
and not jointly with the other Purchasers, agrees that the removal of the restrictive legend from certificates representing Securities
as set forth in Section 5 and elsewhere in this Agreement is predicated upon the Company’s reliance that the Purchaser will
comply with the provisions of this subsection.

 

j.       Definitions.
In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated:

 

    23 

     

    

 

“Additional
Filing Date” means the later of (i) the date sixty (60) days after the date substantially
all of the Registrable Securities registered under the immediately preceding Registration Statement are sold and (ii) the date
six (6) months from the Effective Date of the immediately preceding Registration Statement, or, if such date is not a Business
Day, the next date that is a Business Day. 

 

“Additional
Registration Statement” has the meaning set forth in Section 5(a).

 

“Additional
Required Effectiveness Date” means the date which is the earliest of (i) if the Registration
Statement does not become subject to review by the SEC, (a) sixty (60) days after the Additional Filing Date or (b) five (5) Trading
Days after the Company receives notification from the SEC that the Additional Registration Statement will not become subject to
review and the Company fails to request to accelerate the effectiveness of the Registration Statement, or (ii) if the Additional
Registration Statement becomes subject to review by the SEC, one hundred and twenty (120) days after the Additional Filing Date,
or, if such date is not a Business Day, the next date that is a Business Day.

 

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

 

“Effective
Date” means the date that a Registration Statement is first declared effective by
the SEC.

 

“Effectiveness
Period” has the meaning set forth in Section 5(b). 

 

“Eligible
Market” means any of the following markets or exchanges on which the shares of Common
Stock are listed or quoted for trading on the date in question: the OTC Bulletin Board, The NASDAQ Global Market, The NASDAQ Global
Select Market, The NASDAQ Capital Market, the New York Stock Exchange, NYSE Arca, the NYSE MKT, or the OTCQX Marketplace or the
OTCQB ad OTC Pink quotation systems operated by OTC Markets Group Inc. (or any successor to any of the foregoing).

 

“Event”
has the meaning set forth in Section 5(d).

 

“Event
Payments” has the meaning set forth in Section 5(d).

  

“Excluded
Events” has the meaning set forth in Section 5(d)(ii).

 

    24 

     

    

 

“Filing
Date” means the Initial Filing Date and the Additional Filing Date, as applicable.

 

“Indemnified
Party” has the meaning set forth in Section 5(h)(iii)(A).

  

“Indemnifying
Party” has the meaning set forth in Section 5(h)(iii)(A).

 

“Initial
Filing Date” has the meaning set forth in Section 5(a). 

  

“Initial
Registration Statement” has the meaning set forth in Section 5(a).

 

“Initial
Required Effectiveness Date” means the date which is the earliest of (i) if the Registration
Statement does not become subject to a full review by the SEC, (a) ninety (90) days after the Closing Date or (b) five (5) Trading
Days after the Company receives notification from the SEC that the Registration Statement will not become subject to review and
the Company fails to request to accelerate the effectiveness of the Registration Statement, or (ii) if the Registration Statement
becomes subject to a full review by the SEC, one hundred and twenty (120) days after the Closing Date, or, if such date is not
a Business Day, the next date that is a Business Day.

 

“Losses”
means any and all losses, claims, damages, liabilities, settlement costs and expenses, including,
without limitation reasonable attorneys’ fees.

 

“Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization and a government or any department or agency thereof.

 

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

 

“Prospectus”
means the prospectus included in the Registration Statement (including, without limitation,
a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement
in reliance upon Rule 430A promulgated under the 1934 Act), as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other
amendments and supplements to the Prospectus including post-effective amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus.

 

    25 

     

    

 

“Registrable
Securities” has the meaning set forth in Section 5(a).

 

“Registration
Statement” means each registration statement required to be filed under Article VI, including the Initial Registration
Statement, all Additional Registration Statements, and, in each case, the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by
reference or deemed to be incorporated by reference in such registration statement.

 

“Required
Effectiveness Date” means the Initial Required Effectiveness Date and the Additional Required Effectiveness Date,
as applicable.

 

“Rule
144,” “Rule 415,” and “Rule 424” means Rule 144, Rule 415 and Rule 424, respectively,
promulgated by the SEC pursuant to the Securities Act, as such Rules may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“Securities”
means, collectively, the Common Stock, the Warrants and the Warrant Shares issued to the Purchasers pursuant to this Agreement.

 

“Trading
Day” means (a) any day on which the Common Stock is listed or quoted and traded on its primary Trading Market, or (b)
if the Common Stock is not then listed or quoted and traded on its primary Trading Market, then a day on which trading of the
Common Stock occurs on an Eligible Market, or (c) if the Common Stock is not listed or quoted as set forth in clauses (a) or (b)
hereof, any Business Day.

 

“Trading
Market” means any Eligible Market, or any national securities exchange, market or trading or quotation facility on which
the Common Stock is then listed or quoted.

 

“Transaction
Documents” means this Agreement, the schedules, exhibits and annexes attached hereto, and the Warrants.

6.

7.     Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue the Offered Units
to the Purchaser at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions
thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time
in its sole discretion:

 

a.     The Purchaser shall have executed this Agreement and delivered the same to the Company.

 

    26 

     

    

 

b.     The Purchaser shall have delivered the original Note in accordance with Section 1(b) above.

 

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

 

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

 

8.     Conditions to The Purchaser’s Obligation to Purchase. The obligations of the Purchaser hereunder are subject to the
satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Purchaser’s
sole benefit and may be waived by the Purchaser at any time in its sole discretion:

 

a.     The Company shall have executed this Agreement and delivered the same to the Purchaser.

 

b.     The representations and warranties of the Company shall be true and correct in all material respects as of the date when made
and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific
date), and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.
The Purchaser shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated
as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Purchaser including,
but not limited to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’
resolutions relating to the transactions contemplated hereby.

 

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

 

d.     No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but
not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934
Act reporting obligations.

 

    27 

     

    

 

9.     Miscellaneous.

 

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

 

b.     Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state. The parties
to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Purchaser
waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and
costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document 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.

 

c.     Counterparts. This Agreement may be executed by facsimile and in one or more counterparts, each of which shall be deemed
an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party.

 

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

 

    28 

     

    

 

e.     Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision hereof.

 

f.     Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of
the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither
the Company nor the Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters. No provision
of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Purchaser.

 

g.     Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) hand delivered, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable national courier service with charges prepaid,
or (iv) transmitted by facsimile, addressed as set forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at
the address or number designated below (if delivered on a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier
service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be:

 

If to the Company, to:

Arkados Group, Inc. 

Attn: Terrence DeFranco

211 Warren Street, Suite
320

Newark, NJ 07103

 

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

 

LKP Global Law, LLP

1901 Avenue of the Stars

Los Angeles, CA 90087

Attn: Kevin Leung

 

    29 

     

    

 

If to the Purchaser:

To the address first set
forth in the Purchaser Signature and Subscription Page of this Agreement.

 

Each
party shall provide notice (in accordance with the requirements of this provision) to the other party of any change in address.

 

h.     Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and assigns. Neither the Company nor the Purchaser shall assign this Agreement or any rights or obligations hereunder without
the prior written consent of the other.

 

i.      Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

j.      Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement
shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Purchaser.
The Company agrees to indemnify and hold harmless the Purchaser and all their officers, directors, employees and agents for loss
or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties
and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement
of expenses as they are incurred.

 

k.     Publicity. The Company shall have the right to make, without prior approval, any SEC, OTC or FINRA filings, or any other
public statements with respect to the transactions contemplated hereby as is required by applicable law and regulations.

 

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

 

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

 

    30 

     

    

 

n.     Remedies. Each of the parties acknowledges that a breach by it of its obligations hereunder will cause immediate and irreparable
harm to the other party by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, each party acknowledges
that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach
or threatened breach by a party of the provisions of this Agreement, that the other party shall be entitled, in addition to all
other available remedies at law or in equity, to an injunction or injunctions restraining, preventing or curing any breach of
this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and
without any bond or other security being required.

 

[REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK SIGNATURE PAGES FOLLOW]

 

    31 

     

    

 

COMPANY
SIGNATURE PAGE

TO
ARKADOS SECURITIES PURCHASE AGREEMENT

 

IN
WITNESS WHEREOF, the undersigned Purchaser and the Company have caused this Securities Purchase Agreement to be duly executed
as of the date first written above.

 

COMPANY:

ARKADOS GROUP, INC.

 

	By:	/s/ Terrence DeFanco	 
	 	Terrence DeFranco	 
	 	President and Chief Executive Officer	 

 

[PURCHASER
SIGNATURE AND SUBSCRIPTION PAGE TO FOLLOW]

 

    32 

     

    

 

PURCHASER
SIGNATURE AND SUBSCRIPTION PAGE TO ARKADOS SECURITIES PURCHASE AGREEMENT

 

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

 

Instructions: Please
complete Section 1 through Section 4 below.

 

PURCHASER:

 

Section 1

INVESTOR INFORMATION AND
SUBSCRIPTION:

(choose one alternative
by placing “X” in box):

 

☐
(if entity):

 

	Entity Name:	 	(must be exact legal name)

 

	By:	 	 
	 	(Signature)	 

 

	Name(Printed):	 	 

 

	Title:	 	 

 

	Entity Taxpayer Identification Number:	 	 

 

	Email Address of Authorized contact:	 	 

 

	☐  (if
    individual):	☐  (if
    joint ownership with individual named):

 

	By:	 	 	By:	 	 
	 	(Signature)	 	 	(Signature)

 

	Name(Printed):	 	 	Name(Printed):	 	 

 

	SSN:	 	 	SSN:	 	 

 

    33 

     

    

 

Section 2:

ADDRESS,
FACSIMILE, EMAIL FOR NOTICE (SECTION 7(G)) TO PURCHASER:

	 
	 
	 

 

Section 3:

ADDRESS
FOR DELIVERY OF SECURITIES TO PURCHASER (if different from Section 2 above):

	 
	 
	 

 

Section 4:

AGGREGATE SUBSCRIPTION AMOUNT:

 

	Aggregate
    Number of Shares Purchased:	[169,886]

 

	Consideration:	 	Cancellation of all indebtedness under the Note, full settlement of all
    Note Obligations, and termination of the Note, as set forth in Section 1 of the Agreement

 

    34 

     

    

 

PURCHASER
SIGNATURE AND SUBSCRIPTION PAGE

TO ARKADOS SECURITIES PURCHASE AGREEMENT

 

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

 

Instructions:
Please complete Section 1 through Section 4 below.

 

PURCHASER:

 

Section
1

INVESTOR
INFORMATION AND SUBSCRIPTION:

(choose
one alternative by placing “X” in box):

 

☐
(if entity):

 

	Entity Name:	 	(must be exact legal
name)

 

	By:	 	 
	 	(Signature)	 

 

	Name(Printed):	 	 

 

	Title:	 	 

 

	Entity Taxpayer Identification Number:	 	 

 

	Email Address of Authorized contact:	 	 

 

	☑  (if
    individual):	☐  (if
    joint ownership with individual named):

 

	 	 (Signature)	 	By:	 	 
	 	 	 	 	(Signature)

 

	Name(Printed):	 	 	Name(Printed):	 	 
	 	 	 	 	 	 	 

 

	SSN:	 	 	SSN:	 	 

 

    19 

     

    

 

Section
2:

ADDRESS,
FACSIMILE, EMAIL FOR NOTICE (SECTION 7(G)) TO PURCHASER:

	 
	 

 

Section
3:

ADDRESS
FOR DELIVERY OF SECURITIES TO PURCHASER (if different from Section 2 above):

	 
	 
	 

 

Section
4:

AGGREGATE
SUBSCRIPTION AMOUNT:

 

	Aggregate
    Number of Shares Purchased:	[169,886

 

	Consideration:	 	Cancellation
of all indebtedness under the Note, full settlement of all Note Obligations, and termination of the Note, as set forth in Section
1 of the Agreement

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