Document:

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

 

	 	43⁄4% SECURED CONVERTIBLE DEBENTURE
	 	 
	Company:	World Surveillance Group Inc., a Delaware corporation
	Company Address:	State Road 405, Building M6-306A, Room 1400, Kennedy Space Center, FL 32815
	Closing Date:	January 25, 2012
	Maturity Date:	January 25, 2015
	Principal Amount:	$500,000

 

This 43⁄4% CONVERTIBLE
DEBENTURE is duly authorized and validly issued by World Surveillance Group Inc., a Delaware corporation, (the “Company”)
to La Jolla Cove Investors, Inc. or its registered assigns (the “Holder”), pursuant to the terms of a Securities
Purchase Agreement dated January 25, 2012 between the Company and the Holder (the “Securities Purchase Agreement”).
Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Securities Purchase Agreement.

 

FOR VALUE RECEIVED, the
Company promises to the Holder the principal sum of $500,000, subject to adjustment as provided herein (the “Principal
Amount”) on January 25, 2015 (the “Maturity Date”) or such earlier date as this Debenture is required
or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Debenture at the rate of four and three quarters percent (43⁄4%) per annum (the “Interest
Rate”), all in accordance with the terms and conditions contained in this Debenture. Interest shall accrue from the date
hereof and be payable on a monthly basis, commencing on the 15th day of each month following the month of issuance of this Debenture,
with the final payment to be made on the Maturity Date (each, an “Interest Payment Due Date”). Interest shall
be calculated on the basis of a year of 365 or 366 days, as the case may be, for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest is payable. Payment of interest on this Debenture
shall be in cash or, at the option of the Holder, in shares of Common Stock of the Company valued at the then applicable Conversion
Price (as defined below). At the Maturity Date, the Company shall pay in cash the full outstanding Principal Amount of this Debenture,
together with all accrued and unpaid interest. Subject to the Section 2.5 of the Securities Purchase Agreement, this Debenture
may not be prepaid without the written consent of the Holder. This Debenture is subject to the following additional provisions:

 

	
        GDE

        Initials
	-1-	
        TWH

        Initials

 

    	 

    	 

    

  

ARTICLE 1

DEFINITIONS

 

1.1       Definitions.
Capitalized terms used but not defined in this Debenture shall have the meaning ascribed in the Securities Purchase Agreement.
The terms defined in this Article whenever used in this Debenture have the following meanings:

 

“Alternate Consideration”
shall have the meaning set forth in Section 3.1.

 

“Bankruptcy Code”
means the United States Bankruptcy Code of 1986, as amended (11 U.S.C. §§ 101 et. seq.).

 

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

 

“Capital Shares”
means the Common Stock and any other shares of any other class or series of capital stock, whether now or hereafter authorized
and however designated, which have the right to participate in the distribution of earnings and assets (upon dissolution, liquidation
or winding-up) of the Company.

 

“Closing Date”
means the closing date set forth at the beginning of this Debenture.

 

“Common Stock
Issued at Conversion”, when used with reference to the securities deliverable upon conversion of this Debenture pursuant
to Section 2.1 hereof, means all Common Stock or securities of any other class or series into which this Debenture hereafter shall
have been changed or substituted, whether now or hereafter created and however designated.

 

“Conversion Date”
means the date specified in accordance with the provisions of Section 2.2.

 

“Conversion Notice”
means a written notice of conversion substantially in the form annexed hereto as Exhibit A.

 

	
        GDE

        Initials
	-2-	
        TWH

        Initials

 

    	 

    	 

    

 

“Conversion Price”
means the applicable price for the conversion of this Debenture as set forth in 2.1.

 

“Current Market
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a national securities exchange, the VWAP of the Common Stock for such date (or the nearest preceding
date) on the principal exchange on which the Common Stock is then listed or quoted for trading as reported as reported by Bloomberg
L.P. at 4:15 p.m. (New York City time); (b) if the Common Stock is traded on the OTC Bulletin Board, the VWAP of the Common Stock
for such date (or the nearest preceding date) on the OTC Bulletin Board as reported by Bloomberg L.P. at 4:15 p.m. (New York City
time); (c) if the Common Stock is not then quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are
then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding to
its functions of reporting prices), the last reported VWAP of the Common Stock so reported; or (d) in all other cases, the fair
market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably
acceptable to the Company.

 

“Debenture”
means this 43⁄4% Convertible Debenture issued by the Company or debenture issue in exchange or replacement.

 

“Discount Multiplier”
has the meaning set forth in Section 2.1(a).

 

“Event of Default”
has the meaning set forth in Section 5.1.

 

“Excluded Securities”
means (a) securities issued by the Company pursuant to a stock option or equity incentive plan or pursuant to an agreement or arrangement
that has been approved by the Company’s Board of Directors or its Compensation Committee and provides for the grant of the
Company’s securities solely to any employee, officer, director, consultant or adviser in exchange for services provided to
the Company, (b) shares of Common Stock issued by the Company upon the conversion, exchange or exercise of any right, option, obligation
or security outstanding on the date prior to the Closing Date, provided that the terms of such right, option, obligation or security
are not amended or otherwise modified on or after the Closing Date, and provided that the conversion price, exchange price, exercise
price or other purchase price is not reduced, adjusted or otherwise modified and the number of shares of Common Stock issued or
issuable is not increased (whether by operation of, or in accordance with, the relevant governing documents or otherwise) on or
after the Closing Date, (c) securities issued in connection with any acquisition, whether through an acquisition of stock, assets
or technologies, leasing arrangement or in any other transaction the primary purpose of which is not to raise equity capital, and
(d) the shares of Common Stock issued upon conversion of this Debenture.

 

“Floor Price”
has the meaning set forth in Section 2.1(c).

 

“Holder”
has the meaning set forth in the first paragraph of this Debenture.

 

“Interest Payment
Due Date” has the meaning set forth in the second paragraph of this Debenture.

 

	
        GDE

        Initials
	-3-	
        TWH

        Initials

 

    	 

    	 

    

 

“Interest Rate”
means the interest rate as defined in the second paragraph of this Debenture.

 

“Maturity Date”
means the maturity date set forth in the second paragraph of this Debenture.

 

“Outstanding”
when used with reference to Common Stock or Capital Shares means, on any date of determination, all issued and outstanding Common
Stock or Capital Shares, and includes all such Common Stock or Capital Shares issuable in respect of outstanding scrip or any certificates
representing fractional interests in such Common Stock or Capital Shares; provided, however, that any such Common Stock or Capital
Shares directly or indirectly owned or held by or for the account of the Company or any Subsidiary of the Company shall not be
deemed “Outstanding” for purposes hereof.

 

“Principal Amount”
has the meaning set forth in the second paragraph of this Debenture.

 

“VWAP” means,
for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a national securities exchange, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the principal exchange on which the Common Stock is then listed or quoted for trading as reported by Bloomberg
L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time); (b) if the Common Stock is
traded on the OTC Bulletin Board, the volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the OTC Bulletin Board; (c) if the Common Stock is not then quoted for trading on the OTC Bulletin Board and if prices
for the Common Stock are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported;
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the Holder and reasonably acceptable to the Company.

 

All references to “cash”
or “$” herein means the currency of the United States of America.

 

	
        GDE

        Initials
	-4-	
        TWH

        Initials

 

    	 

    	 

    

 

ARTICLE 2

CONVERSION OF DEBENTURE

 

2.1       Conversion;
Conversion Price.

 

(a)       Beginning on the earlier
to occur of (i) the effectiveness of a registration statement with the SEC covering the resale of the shares of Common Stock to
which Holder shall be entitled to under this Agreement (the "S-1"), but in no event prior to ninety-one (91) days following
the Closing Date, or (ii) one hundred eighty-one (181) days following the Closing Date, the Holder shall have the right to convert
a portion of the Principal Amount and any accrued interest outstanding under this Debenture from time to time during each thirty
(30) day period from the Closing up to five percent (5%) of the face amount of this Debenture, or $25,000, if the VWAP is at or
below $0.09 for the period of ten (10) consecutive days prior to the conversion date, and up to ten percent (10%), or $50,000,
if the VWAP is above $0.09 for the period of ten (10) consecutive days prior to the conversion date, and for every $0.02 increase
in the VWAP above $0.09 for the period of ten (10) consecutive days prior to the conversion date, Holder shall have the right to
convert up to an additional ten percent (10%), or an additional $50,000, into shares of Common Stock (calculated as to each such
conversion to the nearest 1/100th of a share), on any Business Day. Such percentage limitation above shall be accumulated so that
in the event that Holder has not converted up to the maximum allowed, any such excess shall be added to the next 30 day period's
percentage allowance. For example, if in the first thirty (30) day period the Holder has converted 3%, then during the subsequent
thirty (30) day period, Holder shall be allowed to convert up to 7%.

 

(b)       Subject to Section
2.1(c) below, the number of shares into which this Debenture can be converted is equal to the dollar amount of this Debenture being
converted, as reflected in the applicable Conversion Notice, divided by the quotient of the Conversion Price divided by 10, plus
the Debenture amount being converted divided by the Conversion Price. The “Conversion Price” shall be equal
to the lesser of (i) $0.35, or (ii) 75% of the average of the VWAPs during the thirty (30) Trading Days prior to the date of the
Conversion Notice (such percentage amount being the “Discount Multiplier”); provided, however, that if
the Company’s election in Section 2.1(c)(ii) below is exercised, the “Conversion Price” shall be equal to the
Floor Price.

 

(c)       If, on the date
the Holder delivers a Conversion Notice, the applicable Conversion Price is below $0.075 (the “Floor Price”),
the Company shall have the right in its sole discretion, exercisable within two (2) Business Days after the Company’s receipt
of such Conversion Notice, in lieu of issuing the shares of Common Stock as set forth in the Conversion Notice to either (i) convert
the portion of the Debenture that Holder elected to convert using the Floor Price as the Conversion Price and paying to the Holder
in cash an amount equal to the difference in the value of the actual Common Stock Issued at Conversion to Holder hereunder using
the Floor Price as a Conversion Price and the value of the Common Stock that would have been delivered to Holder had the conversion
been done without regard to the Floor Price (the “Cash True-Up Payment”) – SEE EXAMPLE EXH. A. In the
event that the Company fails to make the Cash True-Up Payment within two (2) Business Days after the Company’s receipt of
such Conversion Notice, the Company shall no longer have the right to do the partial conversion and Cash True-Up Payment and shall
issue to Holder the applicable Common Stock Issued at Conversion set forth in the Conversion Notice under the terms of this Debenture.
In the event that the Company elects to do the partial conversion and Cash True-Up Payment, Holder shall have the right to withdraw
its Conversion Notice.

 

2.2       Exercise
of Conversion Privilege. Holder shall exercise its conversion rights any Business Day by emailing or telecopying an executed
and completed Conversion Notice to the Company. The Conversion Notice shall specify the date on which such conversion shall be
effected (such date, the “Conversion Date”) and the amount that is to be converted, subject to the limitations
set forth in Section 2.1(a) hereof. If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be
the date that such Notice of Conversion is deemed delivered hereunder. Each date on which a Conversion Notice is emailed or telecopied
to the Company shall constitute a Conversion Date. The Conversion Notice also shall state the name or names (with addresses) of
the persons who are to become the holders of the Common Stock Issued at Conversion in connection with such conversion. To effect
conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless the entire
Principal Amount of this Debenture, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder
shall have the effect of lowering the outstanding principal amount of this Debenture in an amount equal to the applicable conversion.
The Holder and the Company shall maintain records showing the Principal Amount(s) converted and the date of such conversion(s).
The Company may deliver an objection to any Notice of Conversion within one Business Day of delivery of such Notice of Conversion.
In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of
manifest error. The Holder, and any assignee by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions
of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted Principal Amount of this Debenture
may be less than the amount stated on the face hereof.

 

	
        GDE

        Initials
	-5-	
        TWH

        Initials

 

    	 

    	 

    
 

2.3       Delivery
of Common Stock. The Company shall convert this Debenture and issue the Common Stock Issued at Conversion in the manner provided
below, and all voting and other rights associated with the beneficial ownership of the Common Stock Issued at Conversion shall
vest with the Holder, effective as of the Conversion Date at the time specified in the Conversion Notice, subject to Section 2.1
above. As promptly as practicable after the receipt of the Conversion Notice as aforesaid, but in any event not more than two
(2) Business Days after the Company’s receipt of such Conversion Notice unless the Company elects the prepayment as set
forth in Section 2.1(c), the Company shall (a) issue the Common Stock Issued at Conversion in accordance with the provisions of
this Debenture and (b) unless a transfer of the Common Stock Issued at Conversion is requested by DWAC in the Conversion Notice,
cause to be mailed for delivery by overnight courier (x) a certificate or certificate(s) representing the number of shares of
Common Stock to which the Holder is entitled by virtue of such conversion, and (y) cash, as provided in Section 2.5, in respect
of any fraction of a share of Common Stock deliverable upon such conversion. Pursuant to the terms of a Conversion Notice indicating
a DWAC transfer, unless the Company elects the prepayment as set forth in Section 2.1(c), the Company will issue instructions
to the transfer agent accompanied by an opinion of counsel (if so required by Company’s transfer agent), and, except as
otherwise provided below, shall cause the transfer agent to transmit the certificates representing the Common Stock Issued at
Conversion to the Holder by crediting the account of the Holder’s designated broker with the Depository Trust Corporation
(“DTC”) through its Deposit Withdrawal Agent Commission (“DWAC”) system within two (2) business
days after receipt by Company of the Notice of Conversion (the “Delivery Date”). The Holder shall be treated
for all purposes as the beneficial holder of such shares of Common Stock Issued at Conversion, or, in the case that Company delivers
physical certificates as set forth above, the record holder of such shares of Common Stock, unless the Holder provides Company
written instructions to the contrary. Notwithstanding the foregoing to the contrary, Company or its transfer agent shall only
be obligated to issue and deliver the shares to the DTC on the Holder’s behalf via DWAC (or certificates free of restrictive
legends) if the registration statement providing for the resale of the shares of Common Stock issuable upon the conversion of
this Debenture is effective.

 

2.4       Transfer
Taxes. Conversion of this Debenture shall be made without charge to the Holder hereof for any documentary stamp or similar
taxes that may be payable in respect of the issue or delivery of such certificates, provided that the Company shall not be required
to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon
conversion in a name other than that of the Holder of this Debenture so converted and the Company shall not be required to issue
or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

 

	
        GDE

        Initials
	-6-	
        TWH

        Initials

  

    	 

    	 

    

 

2.5       Fractional
Shares. No fractional shares or scrip representing fractional shares of Common Stock shall be delivered upon conversion of
this Debenture. Instead of any fractional share which otherwise would be delivered upon conversion of this Debenture, the Company
shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction multiplied by the Current Market
Price on the Conversion Date. No cash payment of less than $1.00 shall be required to be given unless specifically requested by
the Holder.

 

2.6       Beneficial
Ownership Limitation  Notwithstanding the foregoing, the Holder may not convert this Debenture to the extent that such conversion
would cause the Holder to exceed the Beneficial Ownership Limitation as set forth in Section 6.13. To the extent that Holder delivers
a Conversion Notice which would result in the issuance of shares of Common Stock in excess of the Beneficial Ownership Limitation,
such Conversion Notice shall be deemed to provide for conversion of only that portion of the Debenture as can be issued without
exceeding the Beneficial Ownership Limitation.

 

2.7       Obligations
Absolute. The Conversion Notice shall constitute a contract between the Holder and the Company, whereby the Holder shall be
deemed to subscribe for the number of shares of Common Stock which it will be entitled to receive upon such conversion, subject
to the Company’s options set forth in Section 2.1, and, in payment and satisfaction of such subscription, to surrender this
Debenture and to release the Company from all liability thereon (except if and to the extent that any Principal Amount thereof
remains unconverted). Subject to the Company’s options set forth in Section 2.1, the Company’s obligations to issue
and deliver the Common Stock upon conversion in accordance with the terms of this Debenture are absolute and unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery
of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged
violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of such Common Stock Issued at Conversion. Subject to
the Company’s options set forth in Section 2.1, if the Company fails for any reason to deliver to the Holder such certificate
or certificates pursuant to Section 2.3 by the third Day after the Conversion Date, and if after such Delivery Date the Holder
is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm
otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of the shares of Common Stock
which the Holder was entitled to receive upon the conversion, then the Company shall (A) pay in cash to the Holder (in addition
to any other remedies available to or elected by the Holder) the amount by which (x) the Holder’s total purchase price (including
any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of
Common Stock that such Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at
which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the
option of the Holder, either reissue (if surrendered) this Debenture in a principal amount equal to the principal amount of the
attempted conversion or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company
had timely complied with its delivery requirements. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares
of Common Stock upon conversion of this Debenture as required pursuant to the terms hereof.

 

	
        GDE

        Initials
	-7-	
        TWH

        Initials

 

    	 

    	 

    
   

ARTICLE 3

RECLASSIFICATION AND ADJUSTMENTS

 

3.1       Reclassification.
Subject to the Company’s early termination rights as set forth in Section 2.5 of the Securities Purchase Agreement, in the
event that (A) the Company effects any merger or consolidation of the Company with or into another Person, (B) the Company effects
any sale of all or substantially all of its assets in one transaction or a series of related transactions, (C) any tender offer
or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted
to tender or exchange their shares for other securities, cash or property, or (D) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged
for other securities, cash or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent
conversion of this Debenture, the Holder shall have the right to receive, for each share of Common Stock that would have been
issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of
securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if
it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the “Alternate
Consideration”).

 

(b)       For purposes of
any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction,
and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. Subject to the Company’s early termination rights as set
forth in Section 2.5 of the Securities Purchase Agreement, if holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction. To the extent necessary
to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall
issue to the Holder a new debenture consistent with the foregoing provisions and evidencing the Holder’s right to convert
such debenture into Alternate Consideration.

 

	
        GDE

        Initials
	-8-	
        TWH

        Initials

  

    	 

    	 

    

   

(c)       Subject to the Company’s
early termination rights as set forth in Section 2.5 of the Securities Purchase Agreement, in the event of a Fundamental Transaction,
the Holder of this Debenture shall have the right thereafter, at its sole option, to (x) declare an Event of Default and require
the Company to prepay this Debenture as set forth in Section 5.1(i), (y) elect to receive the number of shares of common stock
of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Alternate Consideration as
is receivable upon or as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock into which
the outstanding portion of this Debenture may be converted at the Conversion Price applicable immediately prior to such Fundamental
Transaction, or (z) require the Company, or such successor, resulting or purchasing corporation, as the case may be, to, without
benefit of any additional consideration therefor, execute and deliver to the Holder a debenture with substantial identical rights,
privileges, powers, restrictions and other terms as this Debenture in an amount equal to the amount outstanding under this Debenture
immediately prior to such Fundamental Transaction. The foregoing provisions shall similarly apply to successive Fundamental Transactions.

 

3.2       Adjustments
to Floor Price.

 

(a)       Subdivision or
Combination of Common Stock. If the Company, at any time while this Debenture is outstanding, shall (A) pay a stock dividend
or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock, (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine
(including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then the Floor Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such
event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made
pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

 

(b)       Issuance of Capital
Shares. If the Company, at any time while this Debenture is outstanding, issues or sells, any shares of Common Stock or rights,
warrants or options to subscribe for or purchase shares of Common Stock (collectively, “Common Stock Equivalents”),
excluding any Excluded Securities, for a consideration per share less than the Floor Price, then immediately after such sale or
issuance the Floor Price then in effect shall be reduced to an amount equal to 90% of the effective price at which the Common Stock
was issued. For purposes of determining the adjusted Floor Price under this Section, the following shall be applicable:

 

(A)       Issuance of Equity
Securities. If the Company in any manner grants or sells any Common Stock Equivalents and the lowest price per share for which
one share of Common Stock is issuable upon the exercise of any such Common Stock Equivalent is less than the Floor Price, then
such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such Common Stock Equivalent for such price per share. For purposes of this Section, the “lowest price
per share” for which one share of Common Stock is issuable upon the exercise of any such Common Stock Equivalent shall be
equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one
share of Common Stock (x) upon granting or sale of the Common Stock Equivalent, (y) upon exercise of the Common Stock Equivalent
and (z) upon conversion or exchange or exercise of such Common Stock Equivalent. No further adjustment of the Floor Price shall
be made upon the actual issuance of such share of Common Stock upon the exercise or conversion of the Common Stock Equivalent.

 

	
        GDE

        Initials
	-9-	
        TWH

        Initials

 

    	 

    	 

    

 

(B)       Change in Option
Price or Rate of Conversion. If the purchase price provided for in any Common Stock Equivalent, the additional consideration,
if any, payable upon the issue, conversion, exchange or exercise of any Common Stock Equivalent, or the rate at which any Common
Stock Equivalent is convertible into or exchangeable or exercisable for Common Stock changes at any time, the Floor Price in effect
at the time of such change shall be adjusted to the Floor Price which would have been in effect at such time had such Common Stock
Equivalent provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be, at
the time initially granted, issued or sold. For purposes of this Section, if the terms of any Common Stock Equivalent that was
outstanding as of the Closing Date are changed in the manner described in the immediately preceding sentence, then such Common
Stock Equivalent and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been
issued as of the date of such change. No adjustment shall be made if such adjustment would result in an increase of the Floor Price
then in effect.

 

(C)       Calculation of
Consideration Received. If any Common Stock Equivalent is issued in connection with the issue or sale of other securities of
the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Common Stock
Equivalent by the parties thereto, the Common Stock Equivalent will be deemed to have been issued for the difference of (x) the
aggregate fair market value of such Common Stock Equivalent and other securities issued or sold in such integrated transaction,
less (y) the fair market value of the securities other than such Common Stock Equivalent, issued or sold in such transaction and
the other securities issued or sold in such integrated transaction will be deemed to have been issued or sold for the balance of
the consideration received by the Company. If any Common Stock or Common Stock Equivalents are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor will be deemed to be the gross amount raised by the Company;
provided, however, that such gross amount is not greater than 110% of the net amount received by the Company therefor. If any Common
Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of the consideration
other than cash received by the Company will be the fair value of such consideration. The fair value of any consideration other
than cash or securities will be determined jointly by the Company and the Holder.

 

(D)       Record Date.
If the Company takes a record of the holders of Common Stock for the purpose of entitling them (x) to receive a dividend or other
distribution payable in Common Stock, or Capital Shares or (y) to subscribe for or purchase Common Stock, Capital Shares, then
such record date will be deemed to be the date of the issue or sale of the Common Stock deemed to have been issued or sold upon
the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription
or purchase, as the case may be.

 

	
        GDE

        Initials
	-10-	
        TWH

        Initials

 

    	 

    	 

    

 

(c)       Other Events.
If any event occurs of the type contemplated by the provisions of this Section 3.2 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features),
then the Company's Board of Directors will make an appropriate adjustment in the Floor Price so as to protect the rights of the
Holder under this Debenture; provided that no such adjustment will increase the Floor Price as otherwise determined pursuant to
this Section 3.2.

 

3.3       Notice
of Certain Events.

 

(a)       Adjustment to
Floor Price. Whenever the Floor Price is adjusted pursuant to any provision of Section 3.2, the Company shall promptly mail
to the Holder a notice setting forth the Floor Price after such adjustment and setting forth a brief statement of the facts requiring
such adjustment.

 

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

 

	
        GDE

        Initials
	-11-	
        TWH

        Initials

 

    	 

    	 

    
   

(c)       If at any time that
this Debenture is outstanding: (i) the VWAP is below $0.03 (ii) the Company has not authorized or reserved the lesser of at least
50 million shares of its Common Stock or enough shares of its Common Stock to account for the conversion of this Debenture in full
and the issuance of shares of the Common Stock in accordance with its terms; or (iii) the Holder is prohibited for any reason,
including without limitation in connection with any claim, suit, federal or state law, regulation, order, interpretation, statute,
or similar authority, from otherwise converting this Debenture, then the Holder may elect in Holder’s sole and absolute discretion
to convert any portion of the outstanding Principal Amount and accrued and unpaid interest under this Debenture into such number
of shares of Common Stock of the Company equal to the dollar amount of the Debenture being converted divided by the Conversion
Price, subject to the provisions of Section 2.1 (c).

 

ARTICLE 4

COVENANTS

 

4.1       Notice
of Default. If any one or more events occur which constitute or which, with notice, lapse of time, or both, would constitute
an Event of Default, the Company shall forthwith give notice to the Holder, specifying the nature and status of the Event of Default
or such other event(s), as the case may be.

 

4.2       Payment
of Obligations. So long as this Debenture shall be outstanding, the Company shall pay, extend, or discharge at or before maturity,
all its respective material obligations and liabilities, including, without limitation, tax liabilities, except where the same
may be contested in good faith by appropriate proceedings.

 

4.3       Compliance
with Laws. So long as this Debenture shall be outstanding, the Company shall comply with all applicable laws, ordinances,
rules, regulations and requirements of governmental authorities, except for such noncompliance which would not have a material
adverse effect on the business, properties, condition (financial or otherwise) or results of operations of the Company and the
Subsidiaries.

 

4.4       Inspection
of Property, Books and Records. So long as this Debenture shall be outstanding, the Company shall keep proper books of record
and account in which full, true and correct entries shall be made of all material dealings and transactions in relation to its
business and activities and shall permit representatives of the Holder at the Holder’s expense to visit and inspect any
of its respective properties, to examine and make abstracts from any of its respective books and records, not reasonably deemed
confidential by the Company, and to discuss its respective affairs, finances and accounts with its respective officers and independent
public accountants, all at such reasonable times during normal business hours and upon reasonable notice as shall be effected
in a manner so as not to interfere unreasonably with the Company’s normal business operations.

 

4.5       Negative
Covenants. As long as at least 25% of the Principal Amount of this Debenture remains outstanding, without the Holder’s
prior written consent which consent shall not unreasonably be withheld or delayed, the Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly:

 

(a)        intentionally omitted;

 

	
        GDE

        Initials
	-12-	
        TWH

        Initials

 

    	 

    	 

    
 

(b)       amend its charter
documents, including, without limitation, the certificate of incorporation and bylaws, in any manner that materially and adversely
affects any rights of the Holder;

 

(c)       repay, repurchase
or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock or Capital Shares;

 

(d)       pay cash dividends
or distributions on any equity securities of the Company;

 

(e)       enter into any transaction
with any Affiliate of the Company which would be required to be disclosed in any public filing with the Commission, unless such
transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company
(even if less than a quorum otherwise required for board approval); or

 

(f)       enter into any agreement
with respect to any of the foregoing.

 

4.6       No
Impairment.  Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including,
without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Agreement, but will at all times in good faith assist in the carrying out of all such terms and in
the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Agreement
against impairment.

 

4.7       Right
of First Refusal on Other Financing.In the event that the Company offers any securities in a financing transaction (either
debt, equity, or a combination thereof) which is intended to close during a time at least 10% of the Principal Amount of this
Debenture remains outstanding, Holder shall be entitled to a right of first refusal to enable it to match the terms of such financing.
The Company shall deliver to Holder, at least 20 days prior to the proposed closing date of such transaction, written notice describing
the proposed transaction, including the terms and conditions thereof, and providing Holder an option during the 20 day period
following delivery of such notice to provide the financing being offered in such transaction on the same terms as contemplated
by such transaction. Notwithstanding the foregoing, if the Company seeks to consummate such financing on terms less favorable
to the Company than those terms that were provided to Holder, such financing shall be subject to Holder’s right of first
refusal set forth in this Section 4.7.

 

4.8       DWAC
Eligibility.  The Company shall use commercially reasonable efforts to obtain approval by the Depository Trust Corporation
(DTC) to have its Common Stock become eligible for DWAC/FAST transfer with its transfer agent.

 

ARTICLE 5

EVENTS OF DEFAULT; REMEDIES

 

5.1       Events
of Default.  “Event of Default” wherever used herein means any one of the following events:

 

	
        GDE

        Initials
	-13-	
        TWH

        Initials

 

    	 

    	 

    

 

(a)       the Company shall
default in the payment of principal of or interest on this Debenture as and when the same shall be due and payable;

 

(b)       a default or event
of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under
(A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company or
any Subsidiary is obligated;

 

(c)       any representation
or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto or thereto or any other
report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or false or misleading,
in light of the circumstances under which they were made, in any material respect as of the date when made or deemed made;

 

(d)       the Company or any
Subsidiary shall be subject to a Bankruptcy Event;

 

(e)       the Company or any
Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement,
factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness
for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than
$150,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or
being declared due and payable prior to the date on which it would otherwise become due and payable;

 

(f)       it becomes unlawful
for the Company to perform or comply with its obligations under this Debenture in any respect;

 

(g)       the Common Stock
shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing or quotation
for trading thereon within five Trading Days;

 

(h)       the Company shall
fail to timely file all reports required to be filed by it with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act otherwise required by the Exchange Act;

 

(i)       intentionally omitted;

 

(j)       Company, within
ten (10) days after written notice from Holder that it cannot find a broker who will sell the Common Stock issued to Holder upon
conversion, has been unable to identify to Holder a broker who will sell the Common Stock for Holder;

 

(k)       If the average Volume
Weighted Average Price per share of the Common Stock for any period of three (3) consecutive Trading Days during the term of the
Debenture is less than $0.01 per share (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations
or similar reorganizations of capital); or

 

(l)       The total authorized
shares of Common Stock of the Company less the aggregate issued and outstanding shares of Common Stock of the Company multiplied
by the Conversion Price is greater than the unconverted Principal Amount and any accrued interest outstanding under this Debenture
multiplied by four (4), or a shown in mathematical terms as:

 

	
        GDE

        Initials
	-14-	
        TWH

        Initials

 

    	 

    	 

    
  

(No. of Authorized
- No. of Issued) x Conversion Price > (Unconverted Principal Balance + Interest) X 4

 

5.2       Acceleration
of Maturity; Rescission and Annulment. If an Event of Default occurs and is continuing, then and in every such case the Holder
may, in Holder’s sole and absolute discretion, send a notice in writing to the Company, and if the Event of Default has
not been cured within fifteen (15) Business Days following the delivery of such default notice to the Company by the Holder, the
Holder may rescind any outstanding Conversion Notice and declare that any or all amounts owing or otherwise outstanding under
this Debenture are immediately due and payable and upon any such declaration this Debenture or such portion thereof, as applicable,
shall become immediately due and payable in cash in an amount equal to one hundred ten percent (110%) of the sum of (i) the unconverted
Principal Amount thereof, plus (ii) all accrued and unpaid interest thereon to the date of payment.

 

5.3       Late
Payment Penalty. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate
equal to the lesser of 18% per annum or the maximum rate permitted by applicable law which shall accrue daily from the date such
interest is due hereunder through and including the date of payment in full.

 

5.4       Intentionally
omitted.

 

5.5       Maximum
Interest Rate. Notwithstanding anything herein to the contrary, if at any time the applicable Interest Rate as provided for
herein shall exceed the maximum lawful rate which may be contracted for, charged, taken or received by the Holder in accordance
with any applicable law, the rate of interest applicable to this Debenture shall automatically be deemed to be the maximum lawful
rate. To the greatest extent permitted under applicable law, the Company hereby waives and agrees not to allege or claim that
any provisions of this Debenture could give rise to or result in any actual or potential violation of any applicable usury laws.

 

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

 

	
        GDE

        Initials
	-15-	
        TWH

        Initials

 

    	 

    	 

    
   

5.7       No
Penalty. Whenever pursuant to this Debenture the Company is required to pay an amount in excess of the Principal Amount plus
accrued and unpaid interest, the Company and the Holder agree that the actual damages to the Holder from the receipt of cash payment
on this Debenture may be difficult to determine and the amount to be so paid by the Company represents stipulated damages and
not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Debenture and to earn
a return from the sale of shares of Common Stock acquired upon conversion of this Debenture at a price in excess of that price
paid for such shares pursuant to this Debenture. The Company and the Holder hereby agree that such amount of stipulated damages
is not disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert
this Debenture into shares of Common Stock.

 

ARTICLE 6

MISCELLANEOUS

 

6.1       Surrender
of Debentures. Upon conversion or payment in full on the Maturity Date, the Holder shall either deliver this Debenture by
hand to the Company at its principal executive offices or surrender the same to the Company at such address by nationally recognized
overnight courier. Payment of the Debenture on the Maturity Date, shall be made by the Company to the Holder against receipt of
this Debenture by wire transfer of immediately available funds to such account(s) as the Holder shall specify by written notice
to the Company. If payment of such redemption price is not made in full by the redemption date, or the amount due on maturity
is not paid in full by the Maturity Date, the Holder shall continue to have the right to convert this Debenture for such unpaid
amount as provided in Article 2 hereof or to declare an Event of Default as provided in Article 5.

 

6.2       Effect
of Bankruptcy Event. The Holder shall be entitled to exercise its conversion privilege notwithstanding the occurrence of a
Bankruptcy Event or the commencement of any case under the Bankruptcy Code. The Company hereby waives to the fullest extent permitted
any rights to relief it may have under 11 U.S.C. § 362 in respect of the conversion of this Debenture. To the extent that
the Company makes a payment or payments to the Holder or the Holder enforces or exercises its rights under this Debenture, and
such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy
law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation
or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment
had not been made or such enforcement or setoff had not occurred.

 

6.3       Withholding.
To the extent required by applicable law, the Company may withhold amounts for or on account of any taxes imposed or levied by
or on behalf of any taxing authority in the United States having jurisdiction over the Company from any payments made pursuant
to this Debenture.

 

6.4       No
Rights as Shareholder. This Debenture does not entitle Holder to any voting rights or any other rights as a shareholder of
the Company prior to the conversion of the Debenture into shares of Common Stock as provided herein.

 

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

 

	
        GDE

        Initials
	-16-	
        TWH

        Initials

 

    	 

    	 

    

 

6.6       Entire
Agreement. This Agreement, the Securities Purchase Agreement and the other Transaction Documents, together with the Exhibits and
Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede
all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and schedules.

 

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

 

6.8       Construction.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. 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. This Agreement shall be construed
as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue
of the authorship of any provisions of this Agreement or any of the Transaction Documents.

 

6.9       Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective if delivered in the manner and to the address as specified in the Securities Purchase Agreement.

 

6.10     Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State of California, without regard to the principles
of conflicts of law thereof. Each party agrees that all Actions concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its
respective Affiliates, employees or agents) shall be commenced exclusively in the California Courts (as defined in the Securities
Purchase Agreement). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the California Courts for the
adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of the any of the Transaction Documents), and hereby irrevocably waives, and agrees
not to assert in any Action, any claim that it is not personally subject to the jurisdiction of any such California Court, or
that such Action has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Action 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 manner permitted by law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence an Action to enforce
any provisions of a Transaction Document, then the prevailing party in such Action shall be reimbursed by the other party for
its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such Action.

 

	
        GDE

        Initials
	-17-	
        TWH

        Initials

 

    	 

    	 

    
   

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

 

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

 

6.13       Beneficial
Ownership Limitation. The number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include
the number of shares of Common Stock being converted under this Agreement with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which are still subject to conversion under this Agreement or the purchase,
exercise or conversion of the unpurchased, unexercised or nonconverted portion of any other securities of the Company (including,
without limitation, any other Common Stock Equivalents). Except as set forth in the preceding sentence, for purposes of this Section
6.13, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. Upon the written or oral request of a Holder, the Company shall within two Business Days confirm orally
and/or in writing to the Holder the number of shares of Common Stock then outstanding. The “Beneficial Ownership Limitation”
shall be 4.99% of the number of shares of the Common Stock outstanding. The Holder, upon not less than 61 days’ prior notice
to the Company, may increase or decrease the Beneficial Ownership Limitation, provided that the Beneficial Ownership Limitation
in no event exceeds 9.99% of the number of shares of the Common Stock outstanding.

 

IN WITNESS WHEREOF, the
Company has caused this Debenture to be signed by its duly authorized officer on the date of this Debenture.

 

	
        GDE

        Initials
	-18-	
        TWH

        Initials

  

    	 

    	 

    

  

	
        World Surveillance Group Inc., a Delaware
        

        corporation
	 
	 	 
	By: 	/s/ Glenn D. Estrella	 
	 	 	 
	Name: 	Glenn D. Estrella	 
	 	 	 
	Title:	President & CEO	 

 

	
        GDE

        Initials
	-19-	
        TWH

        Initials

 

    	 

    	 

    
 

EXHIBIT A

CONVERSION NOTICE

 

TO:      Attn: _______________

World Surveillance Group
Inc., a Delaware corporation

 

The undersigned owner of
the Convertible Debenture due January __, 2015 (the “Debenture”) issued by World Surveillance Group Inc.,
a Delaware corporation (the “Company”) hereby irrevocably exercises its option to convert a portion of the
Debenture in accordance with its terms, as follows:

 

	Conversion Date:	 	[●]
	Conversion Time:	 	[●]
	Principal Amount converted:	 	[●]
	Accrued Interest converted:	$	[●]
	Total amount converted	$ 	[●]
	Conversion Price	$ 	[●]
	Shares of Common Stock to be issued:	 	[●]

 

The undersigned hereby
instructs the Company to (i) deliver a stock certificate representing the Common Stock Issued at Conversion, a new Debenture representing
the new Principal Amount outstanding, and a check in payment of any fractional shares to the following address:

 

La Jolla Cove Investors,
Inc.

1793 Union Street

San Francisco, California
94123

 

	or (ii) to DWAC the Common Stock Issued
    at Conversion to the following account information:	 
	 	 
	[La Jolla to cross out the option not elected]	 
	 	 
	 	 
	 	 
	Name: 	 	 
	 	 	 
	Title:	 	 

 

    	A-1

    	 

    
 

Appendix A

 

Cash True-Up Payment example:

 

1)   Market
Price: $0.0625

2)   Conversion
Price = $0.05 (20% discount)

3)   Debenture
Conversion Amount = $10,000

 

Value of Common Stock Delivered Pursuant
to Conversion Price:

 

$10,000/($0.05/10) + ($10,000/$0.05) = 2,200,000
shares * $0.0625 = $137,500

 

Value of Common Stock Delivered Pursuant
to Cash True-Up Payment:

 

$10,000/($0.075/10) + ($10,000/$0.075) = 1,466,667
shares * $0.0625 = $91,667

 

Cash True-Up Payment:

 

$137,500 - $91,667 = $45,833 Cash

 

Total Value Received:

 

1,466,667 shares of Common Stock + $45,833
Cash

  

    	A-2Exhibit 10.1

 

EXECUTION
COPY

 

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of February 2, 2012 by and among Transgenomic, Inc., a Delaware corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

A.           The
Company and each Purchaser is executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation
D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”)
under the Securities Act.

 

B.           Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated
in this Agreement, (i) that aggregate number of shares of common stock, par value $0.01 per share (the “Common Stock”),
of the Company, set forth below such Purchaser’s name on the signature page of this Agreement (which aggregate amount for
all Purchasers together shall be 19,000,000 shares of Common Stock and shall be collectively referred to herein as the “Shares”)
and (ii) warrants, in substantially the form attached hereto as Exhibit A (the “Warrants”), to acquire
up to that number of additional shares of Common Stock equal to 50% of the number of Shares purchased by such Purchaser, rounded
up to the nearest whole share (the shares of Common Stock issuable upon exercise of or otherwise pursuant to the Warrants collectively
are referred to herein as the “Warrant Shares”).

 

C.           The
Shares, the Warrants and the Warrant Shares collectively are referred to herein as the “Securities”.

 

D.           The
Company has engaged Craig-Hallum Capital Group LLC to act as exclusive placement agent (the “Placement Agent”)
for the offering of the Shares and Warrants on a “best efforts” basis.

 

E.           Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit B (the “Registration Rights Agreement”), pursuant
to which, among other things, the Company will agree to provide certain registration rights with respect to the Shares and the
Warrant Shares under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws.

 

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

 

    	 

    	 

    

 

Article
I

DEFINITIONS

 

1.1           Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:

 

“Accredited Investor
Questionnaire” means the Accredited Investor Questionnaire set forth as Exhibit C-1 hereto.

 

“Action”
means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation
pending or, to the Company’s Knowledge, threatened against the Company or any of their respective properties or any officer,
director or employee of the Company acting in his or her capacity as an officer, director or employee before or by any federal,
state, county, local or foreign court, arbitrator, governmental or administrative agency, regulatory authority, stock market, stock
exchange or trading facility.

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls,
is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the
Securities Act. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by
the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

 

“Agreement”
has the meaning set forth in the Preamble.

 

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

 

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

 

“Buy-In”
has the meaning set forth in Section 4.1(f).

 

“Buy-In Price”
has the meaning set forth in Section 4.1(f).

 

“Closing”
means the closing of the purchase and sale of the Shares and the Warrants on the Closing Date pursuant to Section 2.1.

 

    	2

    	 

    

 

“Closing Bid Price”
means, for any security as of any date, (a) the last reported closing bid price per share for such security on the Principal Trading
Market, as reported by Bloomberg Financial Markets, or, (b) if the Principal Trading Market begins to operate on an extended hours
basis and does not designate the closing bid price then the last bid price of such security prior to 4:00 p.m., New York City
time, as reported by Bloomberg Financial Markets, or (c) if the foregoing do not apply, the last closing price of such security
in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial Markets, or,
(d) if no closing bid price is reported for such security by Bloomberg Financial Markets, the average of the bid prices of any
market makers for such security as reported in the “pink sheets” by Pink Sheets LLC. If the Closing Bid Price cannot
be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such
date shall be the fair market value as mutually determined by the Company and the holder of such security. If the Company and such
holder are unable to agree upon the fair market value of such security, then the Board of Directors shall use its good faith judgment
to determine the fair market value. The Board of Directors’ determination shall be binding on all parties absent demonstrable
error.. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other
similar transaction during the applicable calculation period.

 

“Closing Date”
means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto,
and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied or waived, as the case may be, or such
other date as the parties may agree.

 

“Commission”
has the meaning set forth in the Recitals.

 

“Common Stock”
has the meaning set forth in the Recitals, and also includes any other class of securities into which the Common Stock may hereafter
be reclassified or changed.

 

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

 

“Company”
has the meaning set forth in the Preamble.

 

“Company Counsel”
means Husch Blackwell LLP, with offices located at 1620 Dodge Street, Omaha, Nebraska 68102.

 

“Company Deliverables”
has the meaning set forth in Section 2.2(a).

 

“Company’s
Knowledge” means with respect to any statement made to the Company’s Knowledge, that the statement is based upon
the actual knowledge of the officers of the Company having responsibility for the matter or matters that are the subject of the
statement, after due inquiry.

  

“Control”
(including the terms “controlling”, “controlled by” or “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

 

“Deadline Date”
has the meaning set forth in Section 4.1(f).

 

“Disclosure Materials”
has the meaning set forth in Section 3.1(h).

 

“Disclosure Schedules”
has the meaning set forth in Section 3.1.

 

    	3

    	 

    

 

“DTC”
has the meaning set forth in Section 4.1(c).

 

“Effective Date”
means the date on which the initial Registration Statement required by Section 2(a) of the Registration Rights Agreement is first
declared effective by the Commission.

 

“Effectiveness Deadline”
means the date on which the initial Registration Statement is required to be declared effective by the Commission under the terms
of the Registration Rights Agreement.

 

“Environmental Laws”
has the meaning set forth in Section 3.1(dd).

 

“Evaluation Date”
has the meaning set forth in Section 3.1(t).

 

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

 

“FDA”
has the meaning set forth in Section 3.1(ll).

 

“GAAP”
means U.S. generally accepted accounting principles, as applied by the Company.

 

“Governmental Licenses”
has the meaning set forth in Section 3.1(ll).

 

“Intellectual Property
Rights” has the meaning set forth in Section 3.1(p).

 

“Irrevocable Transfer
Agent Instructions” means, with respect to the Company, the Irrevocable Transfer Agent Instructions, in substantially
the form of Exhibit E, executed by the Company and delivered to and acknowledged in writing by the Transfer Agent.

 

“Legend Removal
Date” has the meaning set forth in Section 4.1(c).

 

“Lien”
means any lien, charge, deed of trust, claim, encumbrance, security interest, priority, right or
preferential arrangement of any kind or nature whatsoever (excluding preferred stock and equity related preferences) or
other restrictions of any kind.

 

“Material Adverse
Effect” means a material adverse effect on the results of operations, assets, prospects, business or financial condition
of the Company, except that any of the following, either alone or in combination, shall not be deemed a Material Adverse Effect:
(i) effects caused by changes or circumstances affecting general market conditions in the U.S. economy or which are generally applicable
to the industry in which the Company operates, provided that such effects are not borne disproportionately by the Company, (ii)
effects caused by earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material
worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing as of the date hereof or (iii)
effects resulting from or relating to the announcement or disclosure of the sale of Securities or other transactions contemplated
by this Agreement.

 

“Material Contract”
means any contract of the Company that has been filed or was required to have been filed as an exhibit to the SEC Reports pursuant
to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

 

    	4

    	 

    

 

“Material Permits”
has the meaning set forth in Section 3.1(n).

 

“New York Courts”
means the state and federal courts sitting in the City of New York, Borough of Manhattan.

 

“OFAC”
has the meaning set forth in Section 3.1(kk).

 

“Outside Date”
means the tenth (10th) Business Day following the date of this Agreement.

 

“Person”
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.

 

“Placement Agent”
has the meaning set forth in the Recitals.

 

“Press Release”
has the meaning set forth in Section 4.6.

 

“Principal Trading
Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of
the date of this Agreement and the Closing Date, shall be the OTCQB Market.

 

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

 

“Purchase Price”
means $1.00 per unit, each such unit comprised of one share of Common Stock and a Warrant to purchase 0.5 Warrant Shares (subject
to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement.)

 

“Purchaser”
or “Purchasers” has the meaning set forth in the Recitals.

 

“Purchaser Deliverables”
has the meaning set forth in Section 2.2(b).

 

“Purchaser Party”
has the meaning set forth in Section 4.10.

 

“Registration Rights
Agreement” has the meaning set forth in the Recitals.

 

“Registration Statement”
means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale
by the Purchasers of the Registrable Securities (as defined in the Registration Rights Agreement).

 

“Regulation D”
has the meaning set forth in the Recitals.

 

“Required Approvals”
has the meaning set forth in Section 3.1(e).

 

    	5

    	 

    

 

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

 

“SEC Reports”
has the meaning set forth in Section 3.1(h).

 

“Secretary’s
Certificate” has the meaning set forth in Section 2.2(a)(vii).

 

“Securities”
has the meaning set forth in the Recitals.

 

“Securities Act”
has the meaning set forth in the Recitals.

 

“Shares”
has the meaning set forth in the Recitals.

 

“Short Sales”
include, without limitation, (i) all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the
Exchange Act, whether or not against the box, and all types of direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and
similar arrangements (including on a total return basis), and (ii) sales and other transactions through non-U.S. broker dealers
or foreign regulated brokers (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock).

 

“Stock Certificates”
has the meaning set forth in Section 2.2(a)(ii).

 

“Subscription Amount”
means, with respect to each Purchaser, the aggregate amount to be paid for the Shares and the related Warrants purchased hereunder
as indicated on such Purchaser’s signature page to this Agreement next to the heading “Aggregate Purchase Price (Subscription
Amount)” in United States dollars and in immediately available funds.

 

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

 

“Trading Affiliate”
has the meaning set forth in Section 3.2(h).

 

“Trading Day”
means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTCMarkets),
or (ii) if the Common Stock is not listed on a Trading Market (other than the OTCMarkets), a day on which the Common Stock is traded
in the over-the-counter market, as reported by the OTCMarkets, or (iii) if the Common Stock is not quoted on any Trading Market,
a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets” by Pink Sheets
LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business
Day.

 

“Trading Market”
means whichever of the New York Stock Exchange, the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ
Capital Market or the OTCMarkets on which the Common Stock is listed or quoted for trading on the date in question.

 

    	6

    	 

    

 

“Transaction Documents”
means this Agreement, the schedules and exhibits attached hereto, the Warrants, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions and any other documents or agreements explicitly contemplated hereunder.

 

“Transfer Agent”
means Wells Fargo Bank Minnesota, N.A. - Shareowner Services, the current transfer agent of the Company,
with a mailing address of P.O. Box 64854, St. Paul, MN 55164-0854, and a telephone number of (800) 478-9715, or any successor
transfer agent for the Company.

 

“Warrants”
has the meaning set forth in the Recitals. The Placement Agent and/or its designees are also receiving placement agent warrants
as compensation for services rendered in connection with the transactions set forth herein, which warrants shall also constitute
“Warrants” for all purposes hereunder.

 

“Warrant Shares”
has the meaning set forth in the Recitals.

 

Article
II

PURCHASE AND SALE

 

2.1           Closing.

 

(a)          Amount.
  Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell to each
Purchaser, and each Purchaser shall, severally and not jointly, purchase from the Company, such number of units equal to the
quotient resulting from dividing (i) the Subscription Amount for such Purchaser as indicated below such
Purchaser’s name on its signature page to this Agreement by (ii) the Purchase Price, rounded down to the nearest
whole Share. Warrants shall have an exercise price equal to $1.25 per Warrant Share, subject to adjustment as provided in
such Warrants.

 

(b)          Closing.
  The Closing of the purchase and sale of the Shares and Warrants shall take place at the offices of Goodwin Procter LLP, The New
York Times Building, 620 Eighth Avenue, New York, New York 10018 on the Closing Date or at such other location(s) or remotely by
facsimile transmission or other electronic means as the parties may mutually agree.

 

(c)          Form
of Payment.     Except as may otherwise be agreed to among the Company and one or more of the Purchasers,
on or prior to the Business Day immediately prior to the Closing Date, each Purchaser shall wire its Subscription Amount, in United
States dollars and in immediately available funds, to an escrow account established by the Placement Agent (the aggregate amounts
received being held in escrow are referred to herein as the “Escrow Amount”). On the Closing Date,
(a) the Escrow Amount constituting the aggregate Purchase Price shall be distributed as follows: (1) to the Placement Agent, the
fees and reimbursable expenses payable to the Placement Agent, and (2) the balance of the aggregate Purchase Price to the Company,
(b) the Company shall irrevocably instruct the Transfer Agent to deliver to each Purchaser one or more stock certificates, free
and clear of all restrictive and other legends (except as expressly provided in Section 4.1(b) hereof), evidencing the number
of Shares such Purchaser is purchasing as is set forth on such Purchaser’s signature page to this Agreement next
to the heading “Number of Shares to be Acquired,” within three Trading Days after the Closing,
and (c) the Company shall deliver to each Purchaser one or more Warrants, free and clear of all restrictive and other legends
(except as expressly provided in Section 4.1(b) hereof), evidencing the number of Warrant Shares such Purchaser is entitled to
purchase as is set forth on such Purchaser’s signature page to this Agreement next to the heading “Underlying Shares
Subject to Warrant,” within three Trading Days after the Closing. Notwithstanding the foregoing, in the event a Purchaser
has specified to the Company at the time of execution of this Agreement that it shall settle “delivery versus payment”,
the Company shall deliver the Shares and Warrants to such Purchaser on or before the Closing Date and, upon receipt, the Purchaser
shall wire its Subscription Amount to an account designated in writing by the Company.

 

    	7

    	 

    

 

2.2           Closing
Deliveries. (a)          On
or prior to the Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser the following (the “Company
Deliverables”):

 

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

 

(ii)         facsimile
copies of one or more stock certificates, free and clear of all restrictive and other legends (except as provided in Section 4.1(b)
hereof), evidencing the Shares subscribed for by such Purchaser hereunder, registered in the name of such Purchaser as set forth
on the Stock Certificate Questionnaire included as Exhibit C-2 hereto (the “Stock Certificates”), with
the original Stock Certificates delivered by the Transfer Agent within three Trading Days of Closing (unless
such Purchaser has specified to the Company at the time of execution of this Agreement that it shall settle “delivery versus
payment” in which case such original Stock Certificates shall be delivered on or prior to the Closing Date);

 

(iii)        facsimile
copies of one or more Warrants, executed by the Company and registered in the name of such Purchaser as set forth on the Stock
Certificate Questionnaire included as Exhibit C-2 hereto, pursuant to which such Purchaser shall have the right to acquire
such number of Warrant Shares equal to 50% of the number of Shares issuable to such Purchaser pursuant to Section 2.2(a)(ii), rounded
up to the nearest whole share (provided, however, that in the event any Purchasers are Affiliates of each other, all Shares
purchased by such Purchasers shall be aggregated together for the purpose of determining the aggregate number of Warrant Shares
subject to all Warrants purchased by such Purchasers), on the terms set forth therein, with the original Warrants delivered by
the Company within three Trading Days of Closing (unless such Purchaser has specified to the Company
at the time of execution of this Agreement that it shall settle “delivery versus payment” in which case such original
Warrants shall be delivered on or prior to the Closing Date);

 

(iv)        a
legal opinion of Company Counsel, dated as of the Closing Date and in substantially the form attached hereto as Exhibit D,
executed by such counsel and addressed to the Purchasers and the Placement Agent;

 

(v)         the
Registration Rights Agreement, duly executed by the Company;

 

(vi)        duly
executed Irrevocable Transfer Agent Instructions acknowledged in writing by the Transfer Agent instructing
the Transfer Agent to deliver, on an expedited basis, a certificate evidencing a number of Shares equal to such Purchaser’s
Subscription Amount divided by the Purchase Price, registered in the name of such Purchaser;

 

    	8

    	 

    

 

(vii)       a
certificate of the Secretary of the Company (the “Secretary’s Certificate”), dated as of the Closing Date
and in substantially the form attached hereto as Exhibit F;

 

(viii)      the
Compliance Certificate referred to in Section 5.1(h);

 

(ix)         a
certificate evidencing the formation and good standing of the Company issued by the Secretary of State of the State of Delaware
as of a date within five days of the Closing Date;

 

(x)          a
certificate evidencing the Company’s qualification as a foreign corporation and good standing issued by (i) the Secretary
of State of the State of California and (ii) the Secretary of State of the State of Nebraska as of a date within five days of the
Closing Date; and

 

(xi)         a
certified copy of the certificate of incorporation of the Company, as certified by the Secretary of State of the State of Delaware,
as of a date within 10 days of the Closing Date;

 

(b)          On
or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the Company (or the Placement Agent in the case
of clause (ii) below) the following, with respect to such Purchaser (the “Purchaser Deliverables”):

 

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

 

(ii)         subject
to the completion of Section 2.2(a)(ii) and (iii), its Subscription Amount, in United States dollars and in immediately available
funds, in the amount set forth as the “Purchase Price” indicated below such Purchaser’s name on the applicable
signature page hereto under the heading “Aggregate Purchase Price (Subscription Amount)” by wire transfer to an escrow
account established by the Placement Agent;

 

(iii)        the
Registration Rights Agreement, duly executed by such Purchaser; and

 

(iv)        a
fully completed and duly executed Accredited Investor Questionnaire, satisfactory to the Company, and Stock Certificate Questionnaire
in the forms attached hereto as Exhibits C-1 and C-2, respectively.

 

Article
III

REPRESENTATIONS AND WARRANTIES

 

3.1           Representations
and Warranties of the Company. Except as (i) set forth in the schedules delivered herewith (the
“Disclosure Schedules”), which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation
made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules or other representations
relating to the subject matter of such disclosures, or (ii) disclosed in the SEC Reports, the Company hereby represents and warrants
as of the date hereof and the Closing Date (except for the representations and warranties that speak as of a specific date, which
shall be made as of such date), to each of the Purchasers and to the Placement Agent:

 

    	9

    	 

    

 

 

(a)          Subsidiaries.
The Company has no direct or indirect Subsidiaries other than those listed in Schedule 3.1(a) hereto. Except as disclosed
in Schedule 3.1(a) hereto, the Company owns, directly or indirectly, all of the capital stock or comparable equity interests
of each Subsidiary free and clear of any and all Liens, and all the issued and outstanding shares of capital stock or comparable
equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights
to subscribe for or purchase securities.

 

(b)          Organization
and Qualification. The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the
requisite corporate power and authority to own or lease and use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its certificate of incorporation
or bylaws or other organizational documents. The Company and each of its Subsidiaries is duly qualified to conduct business and
is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not have or reasonably be expected to result in a Material Adverse Effect, and no Proceeding has been instituted,
is pending, or, to the Company’s Knowledge, has been threatened in any such jurisdiction revoking, limiting or curtailing
or seeking to revoke, limit or curtail such power and authority or qualification.

 

(c)          Authorization;
Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and
thereunder. The Company’s execution and delivery of each of the Transaction Documents to which it is a party and the consummation
by it of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Shares and
the Warrants and the reservation for issuance and the subsequent issuance of the Warrant Shares upon exercise of the Warrants)
have been duly authorized by all necessary corporate action on the part of the Company, and no further corporate action is required
by the Company, its Board of Directors or its stockholders in connection therewith other than in connection with the Required Approvals.
Each of the Transaction Documents to which it is a party has been (or upon delivery will have been) duly executed by the Company
and is, or when delivered in accordance with the terms hereof, will constitute the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.

 

    	10

    	 

    

 

(d)          No
Conflicts. The execution, delivery and performance by the Company of the Transaction Documents to which it is a party and the
consummation by the Company of the transactions contemplated hereby or thereby (including, without limitation, the issuance of
the Shares and Warrants and the reservation for issuance and issuance of the Warrant Shares) do not and will not (i) conflict with
or violate any provisions of the Company’s or any Subsidiary’s certificate of incorporation or bylaws or otherwise
result in a violation of the organizational documents of the Company, (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would result in a default) under, result in the creation of any Lien upon any of the
properties or assets of the Company or any Subsidiary or give to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any Material Contract, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court
or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations
and the rules and regulations, assuming the correctness of the representations and warranties made by the Purchasers herein, of
any self-regulatory organization to which the Company or its securities are subject, including all applicable Trading Markets),
or by which any property or asset of the Company is bound or affected, except in the case of clauses (ii) and (iii) such as would
not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect or a material adverse
effect on the legality, validity or enforceability of any Transaction Document or the Company’s ability to perform in any
material respect on a timely basis its obligations under any Transaction Document.

 

(e)          Filings,
Consents and Approvals. Neither the Company nor any of its Subsidiaries is required to obtain any consent, waiver, approval,
authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local
or other governmental authority, holder of outstanding securities of the Company or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents (including the issuance of the Securities), other than (i)
the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration Rights
Agreement, (ii) filings required by applicable state securities laws, (iii) the filing of a Notice of Sale of Securities on Form
D with the Commission under Regulation D of the Securities Act, (iv) the filing of any requisite notices and/or application(s)
to the Principal Trading Market for the issuance and sale of the Securities and the listing of the Shares and Warrant Shares for
trading or quotation, as the case may be, thereon in the time and manner required thereby, (v) the filings required in accordance
with Section 4.6 of this Agreement and (vi) those that have been made or obtained prior to the date of this Agreement (collectively,
the “Required Approvals”).

 

(f)          Issuance
of the Securities. The Shares have been duly authorized and, when issued and paid for in accordance with the terms of the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable and free and clear of all Liens, other than restrictions
on transfer provided for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive
or similar rights of stockholders. The Warrants have been duly authorized and, when issued and paid for in accordance with the
terms of the Transaction Documents, will be duly and validly issued, free and clear of all Liens, other than restrictions on transfer
provided for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar
rights of stockholders. The Warrant Shares issuable upon exercise of the Warrants have been duly authorized and, when issued and
paid for in accordance with the terms of the Transaction Documents and the Warrants, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or
imposed by applicable securities laws, and shall not be subject to preemptive or similar rights of stockholders. Assuming the accuracy
of the representations and warranties of the Purchasers in this Agreement, the Securities will be issued in compliance with all
applicable federal and state securities laws. As of the Closing Date, the Company shall have reserved from its duly authorized
capital stock the number of shares of Common Stock issuable upon exercise of the Warrants (without taking into account any limitations
on the exercise of the Warrants set forth in the Warrants). The Company shall, so long as any of the Warrants are outstanding,
take all action necessary to reserve and keep available out of its authorized and unissued capital stock, solely for the purpose
of effecting the exercise of the Warrants, the number of shares of Common Stock issuable upon exercise of the Warrants (without
taking into account any limitations on the exercise of the Warrants set forth in the Warrants).

 

    	11

    	 

    

 

(g)          Capitalization.
The capitalization of the Company is as described in its most recently filed SEC Report on Form 10-K, except for issuances pursuant
to this Agreement, stock option exercises, issuances pursuant to equity incentive plans or exercises of warrants. The Company has
not issued any capital stock since the date of its most recently filed SEC Report other than to reflect stock option and warrant
exercises that do not, individually or in the aggregate, have a material affect on the issued and outstanding capital stock, options
and other securities of the Company. No Person has any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by the Transaction Documents that have not been effectively waived
as of the Closing Date. Except as set forth on Schedule 3.1(g) or a result of the purchase and sale of the Shares and
Warrants, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which
the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. Except
as set forth on Schedule 3.1(g), the issuance and sale of the Shares and Warrants will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding
shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance in all
material respects with all applicable federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities which violation would have or would reasonably
be expected to result in a Material Adverse Effect. No further approval or authorization of any stockholder, the Board of Directors
or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the Company’s
Knowledge, between or among any of the Company’s stockholders.

 

    	12

    	 

    

 

(h)          SEC
Reports; Disclosure Materials. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the 12 months preceding the
date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC
Reports”, and the SEC Reports, together with the Disclosure Schedules, being collectively referred to as the “Disclosure
Materials”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension, except where the failure to file on a timely basis would
not have or reasonably be expected to result in a Material Adverse Effect and would not have or reasonably be expected to result
in any limitation or prohibition on the Company’s ability to register the Shares and Warrant Shares for resale on Form S-1
or any Purchaser’s ability to use Rule 144 to resell any Securities. As of their respective filing dates, or
to the extent corrected by a subsequent amendment, the SEC Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
The Company has never been an issuer subject to Rule 144(i) under the Securities Act. Each of
the Material Contracts to which the Company or any Subsidiary is a party or to which the property or assets of the Company or any
of its Subsidiaries are subject has been filed (or incorporated by reference) as an exhibit to the SEC Reports.

 

(i)          Financial
Statements. The consolidated financial statements of the Company included in the SEC Reports comply in all material respects
with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the
time of filing (or to the extent corrected by a subsequent amendment). Such consolidated financial statements have been prepared
in accordance with GAAP applied on a consistent basis during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required
by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries taken
as a whole as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial year-end audit adjustments.

 

(j)          Material
Changes. Since the date of the latest financial statements included within the SEC Reports, except as specifically disclosed
in a subsequent SEC Report filed prior to the date hereof and except as disclosed in Schedule 3.1(j),
(i) there have been no events, occurrences or developments that have had or would reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or required to be disclosed
in filings made with the Commission, (iii) the Company has not altered materially its method of accounting or the manner in which
it keeps its accounting books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
(other than in connection with repurchases of unvested stock issued to employees of the Company) and (v) the Company has not issued
any equity securities to any officer, director or Affiliate, except Common Stock issued in the ordinary course as dividends on
outstanding preferred stock or issued pursuant to existing Company stock option or stock purchase plans or executive and director
compensation arrangements disclosed in the SEC Reports. Except as disclosed in Schedule 3.1(j)
and except for the issuance of the Shares and Warrants contemplated by this Agreement, no event, liability or development has occurred
or exists with respect to the Company or its Subsidiaries or their respective business, properties, operations or financial condition,
that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made
that has not been publicly disclosed at least one Trading Day prior to the date that this representation is made.

 

    	13

    	 

    

 

(k)          Litigation.
There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) except as disclosed in Schedule 3.1(k), would, if there were an unfavorable decision,
individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. During the past five years,
neither the Company nor any Subsidiary, nor to the Company’s Knowledge any director or officer thereof, is or has been the
subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach
of fiduciary duty. There has not been, and to the Company’s Knowledge there is not pending or contemplated, any investigation
by the Commission involving the Company or any current or former director or officer of the Company. During the past five years,
the Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by
the Company under the Exchange Act or the Securities Act.

 

(l)          Employment
Matters. No material labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees
of the Company which would have or would reasonably be expected to result in a Material Adverse Effect. None of the Company’s
or any Subsidiary’s employees is a member of a labor union that relates to such employee’s relationship with the Company,
and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement. Except as disclosed in Schedule
3.1(l), no executive officer of the Company (as defined in Rule 501(f) of the Securities Act) has
notified the Company or any of its Subsidiaries that such officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Subsidiary. To the Company’s Knowledge, no executive
officer or key employee, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and to the Company’s Knowledge, the continued employment of each such executive officer
or key employee does not subject the Company or any Subsidiary to any liability with respect to any of the foregoing matters, except,
in each case, matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse
Effect. The Company is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance
would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. 

 

(m)          Compliance.
Neither the Company nor any of its Subsidiaries (i) is in default under or in violation of (and no event has occurred that has
not been waived that, with notice or lapse of time or both, would result in a default by the Company or any of its Subsidiaries
under), nor has the Company or any of its Subsidiaries received written notice of a claim that it is in default under or that it
is in violation of, any Material Contract (whether or not such default or violation has been waived), (ii) is in violation of any
order of any court, arbitrator or governmental body having jurisdiction over the Company or any of its Subsidiaries or their properties
or assets, or (iii) is in violation of, or in receipt of written notice that it is in violation of, any statute, rule or regulation
of any governmental authority applicable to the Company or any of its Subsidiaries, except in each case as would not, individually
or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

    	14

    	 

    

 

(n)          Regulatory
Permits. The Company and each of its Subsidiaries possesses all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct its business as currently conducted, except as set
forth in the SEC Reports, or such that where the failure to possess such permits, individually or in the aggregate, has not and
would not have or would not reasonably be expected to result in a Material Adverse Effect (“Material Permits”),
and neither the Company nor any of its Subsidiaries has received any notice of Proceedings relating to the revocation or modification
of any such Material Permits.

 

(o)          Title
to Assets. The Company and each of its Subsidiaries has good and marketable title to all tangible personal property owned by
it that is material to its business, in each case free and clear of all Liens except such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made of such property by the Company. Any real property
and facilities held under lease by the Company and any of its Subsidiaries are held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property
and buildings by the Company and its Subsidiaries.

 

(p)          Patents
and Trademarks. Except as disclosed in Schedule 3.1(p), to the Company’s Knowledge, the Company and each of its
Subsidiaries owns, possesses, licenses or has other rights to use, all patents, patent applications, trade and service marks, trade
and service mark applications and registrations, trade names, trade secrets, inventions, copyrights, licenses, technology, know-how
and other intellectual property rights and similar rights necessary or material for use in connection with its businesses as described
in the SEC Reports and which the failure to so have would have or reasonably be expected to result in a Material Adverse Effect
(collectively, the “Intellectual Property Rights”). Except as disclosed in Schedule 3.1(p), to the Company’s
Knowledge, none of the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the patent,
trademark, copyright, trade secret or other proprietary rights of any Person. There is no pending or, to the Company’s Knowledge,
threatened action, suit, proceeding or claim by any Person that the Company’s or any Subsidiary’s business as now conducted
infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of another. To the Company’s
Knowledge, there is no existing infringement by another Person of any of the Intellectual Property Rights that would have or would
reasonably be expected to result in a Material Adverse Effect. To the Company’s Knowledge, all
patent applications and patents within the Intellectual Property Rights have been prosecuted with a duty of candor, and, except
as disclosed in Schedule 3.1(p), there is no material fact known by the Company that would preclude the issuance of patents
with respect to said patent applications or that would render any issued patents invalid or unenforceable. There is no pending
or, to the Company’s Knowledge, threatened action, suit, proceeding or claim by another Person challenging the Company’s
or any Subsidiary’s rights in or to any material Intellectual Property Rights, or challenging inventorship, validity or scope
of any such Intellectual Property Rights. The Company has taken reasonable security measures to protect the secrecy, confidentiality
and value of all of its and its Subsidiaries’ Intellectual Property Rights, except where failure to do so would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the technology employed by the Company
or any of its Subsidiaries has been obtained or is being used by the Company or any Subsidiary in violation of any contractual
obligation binding on the Company or any Subsidiary or, to the Company’s Knowledge, any of its or its Subsidiaries’
officers, directors or employees or otherwise in violation of the rights of any Person, which violations would have or would reasonably
be expected to have a Material Adverse Effect.

 

    	15

    	 

    

 

(q)          Insurance.
The Company and each of its Subsidiaries is insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as the Company believes to be prudent and customary in the businesses and locations in which the Company
and the Subsidiaries are engaged. None of the Company or any of its Subsidiaries has received any written notice of cancellation
of any such insurance, nor, to the Company’s Knowledge, will it or any Subsidiary be unable to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business without a material increase in cost.

 

(r)          Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the executive officers or directors of the Company
and, to the Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company
(other than for services as employees, officers and directors) that would be required to be disclosed pursuant to Item 404 of Regulation
S-K promulgated under the Securities Act.

 

(s)          Internal
Accounting Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability,
(iii) access to assets or incurrence of liabilities is permitted only in accordance with management's general or specific authorization,
and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any differences.

 

(t)          Sarbanes-Oxley;
Disclosure Controls. The Company is in compliance in all material respects with all of the provisions of the Sarbanes-Oxley
Act of 2002 which are applicable to it. The Company has established disclosure controls and procedures (as such term is defined
in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) for the Company and designed such disclosure
controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules
and forms. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls
and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange
Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal
control over financial reporting (as such term is defined in the Exchange Act) that have materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial reporting.

 

    	16

    	 

    

 

(u)          Certain
Fees. Except as disclosed in Schedule 3.1(u), no person or entity will have, as a
result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or a
Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by
or on behalf of the Company, other than the Placement Agent with respect to the offer and sale of the Shares and Warrants (which
fees are being paid by the Company). The Purchasers shall have no obligation with respect to any fees or with respect to any claim
made by or on behalf of other Persons for fees of a type contemplated in this paragraph (u) pursuant to any agreement to which
the Company is a party that may be due in connection with the transactions contemplated by the Transaction Documents. The Company
shall indemnify, pay, and hold each Purchaser harmless against, any liability, loss or expense (including, without limitation,
attorneys’ fees and out-of-pocket expenses) arising in connection with any such right, interest or claim.

 

(v)         Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2 of this Agreement
and the accuracy of the information disclosed in the Accredited Investor Questionnaires provided by the Purchasers, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers under the Transaction
Documents. The issuance and sale of the Securities hereunder does not contravene the rules and regulations
of the Principal Trading Market. 

 

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

 

(x)          Registration
Rights. Other than each of the Purchasers pursuant to the Registration Rights Agreement, no Person has any right to cause the
Company to effect the registration under the Securities Act of any securities of the Company.

 

(y)          Listing
and Maintenance Requirements. The Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to terminate the registration of the Common Stock under the Exchange Act, nor
has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not,
in the 12 months preceding the date hereof, received written notice from any Trading Market on which the Common Stock is listed
or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason to believe that it will not in the foreseeable future continue to
be in compliance with all listing and maintenance requirements of the Principal Trading Market on the date hereof. 

 

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

 

    	17

    	 

    

 

(aa)         Disclosure.
The Company confirms that it has not provided, and none of its officers or directors nor, to the Company’s Knowledge, any
other Person acting on its or their behalf has provided, and it has not authorized the Placement Agent to provide, any Purchaser
or its respective agents or counsel with any information that it believes constitutes material, non-public information except insofar
as the existence, provisions and terms of the Transaction Documents and the proposed transactions hereunder may constitute such
information, all of which will be disclosed by the Company in the Press Release as contemplated by Section 4.6 hereof. The Company
understands and confirms that the Purchasers will rely on the foregoing representations in effecting transactions in securities
of the Company. All disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company, its business and
the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereto.

 

(bb)         No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company nor, to the Company’s Knowledge, any Person acting on its behalf has, directly or indirectly, at any
time within the past six months, made any offers or sales of any Company security or solicited any offers to buy any security under
circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities
Act in connection with the offer and sale by the Company of the Securities as contemplated hereby or (ii) cause the offering of
the Securities pursuant to the Transaction Documents to be integrated with prior offerings by the Company for purposes of any applicable
law, regulation or stockholder approval provisions, including, without limitation, under the rules and regulations of any Trading
Market on which any of the securities of the Company are listed or designated unless such integration would not have or reasonably
be expected to result in a Material Adverse Effect.

 

(cc)         Tax
Matters. The Company and each of its Subsidiaries (i) has accurately and timely prepared and filed (or requested valid extensions
thereof) all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown
or determined to be due on such returns, reports and declarations, except those being contested in good faith, with respect to
which adequate reserves have been set aside on the books of the Company and (iii) 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,
except, in the case of clauses (i) and (ii) above, where the failure to so pay or file any such tax, assessment, charge or return
would not have or reasonably be expected to result in a Material Adverse Effect. There are no unpaid taxes in any material amount
claimed to be due by the Company or any Subsidiary by the taxing authority of any jurisdiction.

 

    	18

    	 

    

 

(dd)         Environmental
Matters. To the Company’s Knowledge, none of the Company or any of its Subsidiaries (i) is in violation of any statute,
rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any real property
contaminated with any substance that is in violation of any Environmental Laws, (iii) is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or (iv) is subject to any claim relating to any Environmental Laws; which violation, contamination,
liability or claim has had or would have, individually or in the aggregate, a Material Adverse Effect; and there is no pending
investigation or, to the Company’s Knowledge, investigation threatened in writing that might lead to such a claim.

 

(ee)         No
General Solicitation. Neither the Company nor, to the Company’s Knowledge, any person acting on behalf of the Company
has offered or sold any of the Securities by any form of general solicitation or general advertising.

 

(ff)         Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company, any Subsidiary
and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in the SEC Reports and
is not so disclosed and would have or reasonably be expected to result in a Material Adverse Effect.

 

(gg)         Foreign
Corrupt Practices. Neither the Company nor any of its Subsidiaries, nor to the Company’s Knowledge, any agent or other
person acting on behalf of the Company or any of its Subsidiaries, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

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

 

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

 

    	19

    	 

    

 

(jj)         PFIC
Status. Neither the Company nor any of its Subsidiaries is or intends to become a “passive foreign investment company”
within the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.

 

(kk)         OFAC
Status. Neither the Company nor any of its Subsidiaries is and, to the Company’s Knowledge, no director, officer, agent,
employee, Affiliate or Person acting on behalf of the Company or any Subsidiary is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly
or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to
any joint venture partner or other Person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any
other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions
administered by OFAC.

 

(ll)         Government
Licenses. The Company and its Subsidiaries possess such permits, certificates, licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”) issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business of the Company as described in the SEC Reports, including without limitation,
all such approvals, certificates, authorizations and permits required by the United States Food and Drug Administration (the “FDA”)
and/or other federal, state, local or foreign agencies or bodies engaged in the regulation of clinical trials, pharmaceuticals,
or biohazardous substances or materials, except where the failure so to possess would not, individually or in the aggregate, have
or reasonably be expected to have a Material Adverse Effect; the Company and each of its Subsidiaries is in compliance with the
terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse Effect; all of the Governmental Licenses are valid and in
full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse
Effect; and neither the Company nor any of its Subsidiaries has received any written notice of Proceedings relating to the revocation
or modification of any such Governmental Licenses which, individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have or reasonably be expected to have a Material Adverse Effect. Where required by applicable laws and
regulations of the FDA or any foreign regulatory authority, the Company and each of its Subsidiaries has submitted to the FDA or
any foreign regulatory authority an Investigational New Drug Application, or similar application, or amendment or supplement thereto
for a clinical trial it has conducted or sponsored or is conducting or sponsoring, except where such failure would not, individually
or in the aggregate, have or reasonably be expected to have a Material Adverse Effect; all such submissions were in material compliance
with applicable laws and rules and regulations when submitted and no material deficiencies have been asserted by the FDA or such
foreign regulatory authority with respect to any such submissions, except any deficiencies which could not, individually or in
the aggregate, have or reasonably be expected to have a Material Adverse Effect.

 

    	20

    	 

    

 

(mm)         No
Additional Agreements. The Company does not have any agreement or understanding with any Purchaser with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

3.2    Representations
and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Purchaser,
represents and warrants as of the date hereof and as of the Closing Date to the Company and the Placement Agent as follows:

 

(a)          Organization;
Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite corporate, limited liability company or partnership power and authority to enter into and
to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement by such Purchaser and performance by such Purchaser of the
transactions contemplated by this Agreement have been duly authorized by all necessary corporate or, if such Purchaser is not a
corporation, such partnership, limited liability company or other applicable like action, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance
with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

 

(b)          No
Conflicts. The execution, delivery and performance by such Purchaser of this Agreement and the Registration Rights Agreement
and the consummation by such Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of
the organizational documents of such Purchaser, (ii) conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which such Purchaser is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to such Purchaser, except in the
case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to perform its obligations
hereunder.

 

(c)          Investment
Intent. Such Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Shares and Warrants and, upon exercise of
the Warrants, will acquire the Warrant Shares issuable upon exercise thereof as principal for its own account and not with a view
to, or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state
securities laws, provided, however, that by making the representations herein, such Purchaser does not agree to hold any
of the Securities for any minimum period of time and reserves the right, subject to the provisions of this Agreement and the Registration
Rights Agreement, at all times to sell or otherwise dispose of all or any part of such Securities pursuant to an effective registration
statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state
securities laws. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser does
not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution
of any of the Securities (or any securities which are derivatives thereof) to or through any person or entity; such Purchaser is
not a registered broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would require it to
be so registered as a broker-dealer.

 

    	21

    	 

    

 

(d)          Purchaser
Status. At the time such Purchaser was offered the Shares and Warrants, it was, and at the date hereof it is, and on each date
on which it exercises the Warrants it will be, an “accredited investor” as defined in Rule 501(a) under the Securities
Act.

 

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

 

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

 

(g)          Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Disclosure Materials and has been
afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its Subsidiaries and their respective financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such
Purchaser's right to rely on the truth, accuracy and completeness of the Company's representations and warranties contained in
the Transaction Documents. Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make
an informed decision with respect to its acquisition of the Securities.

 

(h)          Brokers
and Finders. No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest
or claim against or upon the Company or any Purchaser for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of such Purchaser.

 

    	22

    	 

    

 

(i)          Independent
Investment Decision. Such Purchaser has independently evaluated the merits of its decision to purchase Securities pursuant
to the Transaction Documents, and such Purchaser confirms that it has not relied on the advice of any other Purchaser’s business
and/or legal counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any other materials
presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Securities constitutes legal,
tax or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has
deemed necessary or appropriate in connection with its purchase of the Securities. Such Purchaser understands that the Placement
Agent has acted solely as the agent of the Company in this placement of the Shares and Warrants and such Purchaser has not relied
on the business or legal advice of the Placement Agent or any of its agents, counsel or Affiliates in making its investment decision
hereunder, and confirms that none of such Persons has made any representations or warranties to such Purchaser in connection with
the transactions contemplated by the Transaction Documents.

 

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

 

(k)          No
Governmental Review. Such Purchaser understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(l)          Residency.
Such Purchaser’s residence (if an individual) or offices in which its investment decision with respect to the Securities
was made (if an entity) are located at the address immediately below such Purchaser’s name on its signature page hereto.

 

(m)         Accuracy
of Accredited Investor Questionnaire.  The Accredited Investor Questionnaire delivered by such Purchaser in connection
with this Agreement is complete and accurate in all respects as of the date of this Agreement and will be correct as of the Closing
Date.

 

The Company and each of the Purchasers acknowledge
and agree that no party to this Agreement has made or makes any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Article III and the Transaction Documents.

 

    	23

    	 

    

 

Article
IV

OTHER AGREEMENTS OF THE PARTIES

 

4.1           Transfer
Restrictions.

 

(a)          Compliance
with Laws. Notwithstanding any other provision of this Article IV, each Purchaser, severally but not jointly, covenants that
the Securities may be disposed of only pursuant to an effective registration statement under, and in compliance with the requirements
of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements
of the Securities Act, and in compliance with any applicable state and federal securities laws. In connection with any transfer
of the Securities other than (i) pursuant to an effective registration statement, (ii) to the Company, (iii) pursuant to Rule 144
(provided that such Purchaser provides the Company with reasonable assurances (in the form of seller and, if applicable,
broker representation letters) that the securities may be sold pursuant to such rule) or (iv) in connection with a bona fide pledge
as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel
selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under
the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement
and the Registration Rights Agreement and shall have the rights of a Purchaser under this Agreement and the Registration Rights
Agreement with respect to such transferred Securities.

 

(b)          Legends.
Certificates evidencing the Securities shall bear any legend as required by the “blue sky” laws of any state and a
restrictive legend in substantially the following form, until such time as they are not required under Section 4.1(c):

 

[NEITHER THESE SECURITIES NOR THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

The Company acknowledges
and agrees that a Purchaser may from time to time pledge, and/or grant a security interest in, some or all of the legended Securities
in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan.
Such a pledge would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee,
secured party or pledgor shall be required in connection with the pledge, but such legal opinion shall be required in connection
with a subsequent transfer or foreclosure following default by such Purchaser transferee of the pledge. No notice shall be required
of such pledge, but such Purchaser’s transferee shall promptly notify the Company of any such subsequent transfer or foreclosure
of such legended Securities. Each Purchaser acknowledges that the Company shall not be responsible for any pledges relating to,
or the grant of any security interest in, any of the Securities or for any agreement, understanding or arrangement between any
Purchaser and its pledgee or secured party. At the appropriate Purchaser’s expense, the Company will execute and deliver
such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or
transfer of the Securities, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of
the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholders
thereunder. Each Purchaser acknowledges and agrees that, except as otherwise provided in Section 4.1(c), any Securities subject
to a pledge or security interest as contemplated by this Section 4.1(b) shall continue to bear the legend set forth in this Section
4.1(b) and be subject to the restrictions on transfer set forth in Section 4.1(a).

 

    	24

    	 

    

 

(c)          Removal
of Legends. The legend set forth in Section 4.1(b) above shall be removed and the Company shall issue a certificate without
such legend or any other legend to the holder of the applicable Securities upon which it is stamped or issue to such holder by
electronic delivery at the applicable balance account at the Depository Trust Company (“DTC”), if (i) such
Securities are registered for resale under the Securities Act (provided that, if a Purchaser is selling
pursuant to the Registration Statement, such Purchaser agrees to only sell such Securities during
such time that the Registration Statement is effective and not withdrawn or suspended, and only as permitted by the Registration
Statement), (ii) such Securities are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the Company),
or (iii) such Securities are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with
the current public information required under Rule 144 as to such securities and without volume or manner-of-sale restrictions.
Following the earlier of (i) the Effective Date or (ii) Rule 144 becoming available for the resale of Securities, without the
requirement for the Company to be in compliance with the current public information required under Rule 144 as to such securities
and without volume or manner-of-sale restrictions, the Company shall deliver to the Transfer Agent irrevocable instructions that
the Transfer Agent shall reissue a certificate representing the applicable Shares or issue a certificate representing the applicable
Warrant Shares without legend upon receipt by the Transfer Agent of the legended certificates for such Shares. Any fees (with
respect to the Transfer Agent or otherwise) associated with the removal of such legend shall be borne by the Company. Following
the Effective Date, or at such earlier time as a legend is no longer required for certain Securities (in which case a Purchase
shall also be required to provide reasonable assurances (in the form of seller and, if applicable, broker representation letters),
the Company will no later than three Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent (with
notice to the Company) of (i) a legended certificate representing Shares or Warrant Shares (endorsed or with stock powers attached,
signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer) or (ii) an Exercise Notice and
payment of the applicable exercise price in the manner stated in the Warrants to effect the exercise of such Warrant in accordance
with its terms, and an opinion of counsel to the extent required by Section 4.1(a) (such third Trading Day, the “Legend
Removal Date”), deliver or cause to be delivered to the transferee of such Purchaser or such Purchaser, as applicable,
a certificate representing such Securities that is free from all restrictive and other legends. The Company may not make any notation
on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section
4.1(c) other than to comply with applicable law. Certificates for Shares or Warrant Shares subject to legend removal hereunder
may be transmitted by the Transfer Agent to a Purchaser by crediting the account of such Purchaser’s prime broker with DTC
as directed by such Purchaser.

 

    	25

    	 

    

 

(d)          Irrevocable
Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer
agent, in substantially the form of Exhibit E attached hereto (the “Irrevocable Transfer Agent Instructions”).
The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this
Section 4.1(d) (or instructions that are consistent therewith) will be given by the Company to its transfer agent in connection
with this Agreement, and that the Securities shall otherwise be freely transferable on the books and records of the Company as
and to the extent provided in this Agreement and the other Transaction Documents and applicable law. The Company acknowledges that
a breach by it of its obligations under this Section 4.1(d) will cause irreparable harm to a Purchaser. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this Section 4.1(d) will be inadequate and agrees, in
the event of a breach or threatened breach by the Company of the provisions of this Section 4.1(d), that a Purchaser shall be entitled,
in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any bond or other security being required.

 

(e)          Acknowledgement.
Each Purchaser, severally but not jointly, acknowledges its primary responsibilities under the Securities Act and accordingly will
not sell or otherwise transfer the Securities or any interest therein without complying with the requirements of the Securities
Act and applicable law. While the Registration Statement remains effective, each Purchaser hereunder may sell the Shares and Warrant
Shares in accordance with the plan of distribution contained in the Registration Statement and if it does so it will comply therewith
and with the related prospectus delivery requirements unless an exemption therefrom is available. Each Purchaser, severally and
not jointly with the other Purchasers, agrees that if it is notified by the Company in writing at any time that the Registration
Statement registering the resale of the Shares or the Warrant Shares is not effective or that the prospectus included in such Registration
Statement no longer complies with the requirements of Section 10 of the Securities Act, such Purchaser will refrain from selling
such Shares and Warrant Shares until such time as the Purchaser is notified by the Company that such Registration Statement is
effective or such prospectus is compliant with Section 10 of the Securities Act, unless such Purchaser is able to, and does, sell
such Shares or Warrant Shares pursuant to an available exemption from the registration requirements of Section 5 of the Securities
Act. Both the Company and its Transfer Agent, and their respective directors, officers, employees and agents, may rely on this
Section 4.1(e) and each Purchaser, severally but not jointly, with the other Purchasers will indemnify and hold harmless each of
such persons from any breaches or violations of this Section 4.1(e).

 

(f)          Buy-In.
If the Company shall fail for any reason or for no reason to issue to a Purchaser unlegended certificates within three Trading
Days after receipt of all documents necessary for the removal of the legend set forth above (the “Deadline Date”),
then, in addition to all other remedies available to such Purchaser, if on or after the Trading Day immediately following such
three Trading Day period, such Purchaser is required to purchase (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the holder of shares of Common Stock that such Purchaser anticipated receiving from
the Company without any restrictive legend (a “Buy-In”), then the Company shall, within three Trading Days after
such Purchaser’s request and in the Company’s sole discretion, either (i) pay cash to such Purchaser in an amount equal
to such Purchaser’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased
(the “Buy-In Price”), at which point the shares of Common Stock held by such Purchaser equal to the number of
shares of Common Stock so purchased shall be forfeited to the Company and the Company’s obligation to deliver such certificate
(and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to such Purchaser
a certificate or certificates representing such shares of Common Stock and pay cash to the Purchaser in an amount equal to the
excess (if any) of the Buy-In Price over the product of (a) such number of shares of Common Stock, multiplied by (b) the Closing
Bid Price on the Deadline Date. A Purchaser shall provide the Company written notice indicating the amounts payable to such Purchaser
in respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company.

 

    	26

    	 

    

 

4.2           Reservation
of Common Stock. The Company shall take all action necessary to at all times during the period the Warrants are outstanding
have authorized, and reserved for the purpose of issuance from and after the Closing Date, the number of shares of Common Stock
issuable upon exercise of the Warrants issued at the Closing (without taking into account any limitations on exercise of the Warrants
set forth in the Warrants).

 

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

 

4.4           Furnishing
of Information. In order to enable the Purchasers to sell the Securities under Rule 144, until the earlier of (i) the date
that the Securities cease to be Registrable Securities (as defined in the Registration Rights Agreement) (and for no less than
12 months from the Closing) or (ii) a Fundamental Transaction (as defined in the Warrant) pursuant to which the Company is no longer
a reporting company under the Exchange Act, the Company shall use its commercially reasonable efforts to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to the Exchange Act. Except as set forth in clause (ii) above, during such period, if the Company is not
required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available
in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Securities under Rule 144.

 

4.5           No
Integration. The Company shall not, and shall use its commercially reasonable efforts to ensure
that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that will be integrated with the offer or sale of the Securities in a
manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers, or that will
be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that
it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before
the closing of such subsequent transaction.

 

    	27

    	 

    

 

4.6           Securities
Laws Disclosure; Publicity. On or before 9:00 a.m., New York City time, on the Business Day immediately
following the date hereof, the Company shall issue a press release (the “Press Release”)
reasonably acceptable to the Placement Agent disclosing all material terms of the transactions contemplated hereby. On or before
5:30 p.m., New York City time, on the fourth Trading Day immediately following the execution of this Agreement, the Company will
file a Current Report on Form 8-K with the Commission describing the terms of the Transaction Documents (and including as exhibits
to such Current Report on Form 8-K the material Transaction Documents (including, without limitation, this Agreement, the form
of Warrant and the Registration Rights Agreement)). Notwithstanding the foregoing, the Company shall not publicly disclose the
name of any Purchaser or an Affiliate of any Purchaser, or include the name of any Purchaser or an Affiliate of any Purchaser in
any press release or filing with the Commission (other than the Registration Statement) or any regulatory agency or Trading Market,
without the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with (A) any
registration statement contemplated by the Registration Rights Agreement and (B) the filing of final Transaction Documents (including
signature pages thereto) with the Commission and (ii) to the extent such disclosure is required by law, request of the Staff of
the Commission or Trading Market regulations, in which case the Company shall provide the Purchasers with prior written notice
of such disclosure permitted under this subclause (ii). From and after the issuance of the Press Release, no Purchaser shall be
in possession of any material, non-public information received from the Company or any of its officers, directors, employees or
agents, that is not disclosed in the Press Release. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that it will comply with the provisions of any confidentiality or nondisclosure agreement executed by it and, in addition, until
such time as the transactions contemplated by this Agreement are required to be publicly disclosed by the Company as described
in this Section 4.6, such Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction). 

 

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

 

4.8           Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, including this Agreement, or as expressly required by any applicable securities law, the Company
covenants and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel
with any information regarding the Company that the Company believes constitutes material non-public information without the express
written consent of such Purchaser, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant
in effecting transactions in securities of the Company.

 

4.9           Use
of Proceeds. The Company shall use the net proceeds from the sale of the Shares and Warrants
hereunder for working capital and general corporate purposes.

 

    	28

    	 

    

 

4.10         Indemnification
of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify
and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each
Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons
(each, a “Purchaser Party”) harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs
and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of
or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement
or in the other Transaction Documents or (ii) any action instituted against a Purchaser in any capacity, or any Purchaser Party,
by any stockholder of the Company who is not an Affiliate of such Purchaser seeking indemnification, with respect to any of the
transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser’s representations,
warranties or covenants under the Transaction Documents or any other agreement with the Company, or any agreements or understandings
such Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities laws or any
conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance). Promptly after receipt
by any such Person (the “Indemnified Person”) of notice of any demand, claim or circumstances which would or
might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity may be
sought pursuant to this Section 4.10, such Indemnified Person shall promptly notify the Company in writing and the Company shall
assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume
the payment of all fees and expenses relating to such action, proceeding or investigation; provided, however, that the failure
of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent
that the Company is actually and materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; (ii) the
Company shall have failed promptly to assume the defense of such proceeding and to employ counsel reasonably satisfactory to such
Indemnified Person in such proceeding; or (iii) in the reasonable judgment of counsel to such Indemnified Person, representation
of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. The Company
shall not be liable for any settlement of any proceeding effected without its prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Without the prior written consent of the Indemnified Person, which consent shall
not be unreasonably withheld, delayed or conditioned, the Company shall not effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder
by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability
arising out of such proceeding.

 

4.11         Listing
of Securities. In the time and manner required by the Principal Trading Market, the Company shall
prepare and file with such Principal Trading Market an additional shares listing application covering all of the Shares and Warrant
Shares and shall use its reasonable best efforts to take all steps necessary to cause all of the Shares and Warrant Shares to be
approved for listing on the Principal Trading Market as promptly as possible thereafter. 

 

    	29

    	 

    

 

4.12         Form D;
Blue Sky. The Company agrees to timely file a Form D with respect to the Securities as required
under Regulation D and to provide a copy thereof, promptly upon the written request of any Purchaser. The Company, on or before
the Closing Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption
for or to qualify the Securities for sale to the Purchasers at the Closing 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 such actions promptly upon the written request of any Purchaser. 

 

4.13         Delivery
of Shares and Warrants After Closing . The Company shall deliver, or cause to be delivered, the
respective Shares and Warrants purchased by each Purchaser to such Purchaser within three Trading Days of the Closing Date (unless
such Purchaser has specified to the Company at the time of execution of this Agreement that it shall settle “delivery versus
payment” in which case such Shares and Warrants shall be delivered on or prior to the Closing Date).  

 

4.14         Subsequent
Equity Sales. From the date hereof until 60 days after the Effective Date of the Initial Registration Statement (as defined
in the Registration Rights Agreement), the Company shall not issue shares of Common Stock or Common Stock Equivalents; provided,
however, the 60-day period set forth in this Section 4.15 shall be extended for the number of Trading Days during such period
in which (i) trading in the Common Stock is suspended by any Trading Market within such 60-day period, or (ii) within 60 days of
the Effective Date of the Initial Registration Statement,, the Registration Statement is not effective or the prospectus included
in the Registration Statement may not be used by the Purchasers for the resale of the Shares and Warrant Shares. Notwithstanding
the foregoing, in no event shall this Section 4.15 prohibit the Company from issuing shares of Common Stock or Common Stock Equivalents
(i) in connection with acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company,
provided that any such issuance shall only be to a Person which is, itself or through its Subsidiaries, an operating company in
a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment
of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital
or to an entity whose primary business is investing in securities, (ii) upon the exercise of any options or warrants outstanding
on the date hereof, (iii) upon the exercise of the Warrants or (iv) to employees, directors or consultants pursuant to any stock
option or equity incentive or employee stock purchase plan.

 

Article
V

CONDITIONS PRECEDENT TO CLOSING

 

5.1           Conditions
Precedent to the Obligations of the Purchasers to Purchase Securities. The obligation of each
Purchaser to acquire Shares and Warrants at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, on
or prior to the Closing Date, of each of the following conditions, any of which may be waived by such Purchaser (as to itself only):

 

(a)          Representations
and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material
respects (except for those representations and warranties which are qualified as to materiality, in which case such representations
and warranties shall be true and correct in all respects) as of the date when made and as of the Closing Date, as though made on
and as of such date, except for such representations and warranties that speak as of a specific date.

 

    	30

    	 

    

 

(b)          Performance.
The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing.

 

(c)          No
Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

 

(d)          Consents.
The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Securities at the Closing (including all Required Approvals), all of which shall
be and remain so long as necessary in full force and effect.

 

(e)          Adverse
Change. Since the date of execution of this Agreement, no event or series of events shall have occurred that has had or would
reasonably be expected to have a Material Adverse Effect.

 

(f)          No
Suspensions of Trading in Common Stock. The Common Stock shall not have been suspended, as of the Closing Date, by the Commission
or the Principal Trading Market from trading on the Principal Trading Market nor shall suspension by the Commission or the Principal
Trading Market have been threatened, as of the Closing Date, either (A) in writing by the Commission or the Principal Trading Market
or (B) by falling below the minimum listing maintenance requirements of the Principal Trading Market.

 

(g)          Company
Deliverables. The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a).

 

(h)          Compliance
Certificate. The Company shall have delivered to each Purchaser a certificate, dated as of the Closing Date and signed by its
Chief Executive Officer or its Chief Financial Officer, certifying to the fulfillment of the conditions specified in Sections 5.1(a)
and (b) in the form attached hereto as Exhibit G.

 

(i)          Minimum
Proceeds. The Company shall have received aggregate gross proceeds of no less than $15.0 million.

 

(j)          Termination.This
Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.18 herein.

 

5.2          Conditions
Precedent to the Obligations of the Company to sell Securities. The Company's obligation to sell
and issue the Shares and Warrants at the Closing to the Purchasers is subject to the fulfillment to the satisfaction of the Company
on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

 

(a)          Representations
and Warranties. The representations and warranties made by the Purchasers in Section 3.2 hereof shall be true and correct in
all material respects (except for those representations and warranties which are qualified as to materiality, in which case such
representations and warranties shall be true and correct in all respects) as of the date when made, and as of the Closing Date
as though made on and as of such date, except for representations and warranties that speak as of a specific date.

 

    	31

    	 

    

 

 

 

(b)       Performance.
Such Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing
Date.

 

(c)       No
Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any
of the transactions contemplated by the Transaction Documents.

 

(d)       Consents.
The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Securities at the Closing (including all Required Approvals), all of which shall
be and remain so long as necessary in full force and effect.

 

(e)       Purchasers
Deliverables. Such Purchaser shall have delivered its Purchaser Deliverables in accordance with Section 2.2(b).

 

(f)       Termination.       This
Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.18 herein.

 

Article
VI

MISCELLANEOUS

 

6.1         Fees
and Expenses. Except as otherwise expressly set forth in the Company’s engagement letter
with the Placement Agent, the Company and each Purchaser, severally and not jointly with any other Purchaser, shall pay the fees
and expenses of their respective advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such
party in connection with the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall
pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the Securities
to the Purchasers. Each Purchaser, severally and not jointly with any other Purchaser, shall be responsible for all other tax liability
that may arise as a result of holding or transferring the Securities by it.

 

6.2         Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain
the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings,
discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules. At or after the Closing, and without further consideration, the Company and the Purchasers
will execute and deliver to the other such further documents as may be reasonably requested in order to give practical effect to
the intention of the parties under the Transaction Documents.

 

    	32

    	 

    
 

6.3         Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered
via facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the facsimile number
specified in this Section 6.3 prior to 5:00 p.m., New York City time, on a Trading Day, (b) the next Trading Day after the date
of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section 6.3
on a day that is not a Trading Day or later than 5:00 p.m., New York City time, on any Trading Day, (c) the Trading Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (d) upon
actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall
be as follows:

 

If to the Company:       Transgenomic,
Inc.

                                     12325 Emmet
Street

                                     Omaha, NE 68164

                                     Telephone No.:
(402) 452-5400

                                     Facsimile No.:
(402) 452-5401

                                     Attention: Chief
Financial Officer

 

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

 

                                     Husch Blackwell LLP

                                     1620 Dodge Street

                                     Omaha, NE 68102

                                     Telephone No.:
(402) 964-5000

                                     Facsimile No.:
(402) 964-5050

                                     Attention: David
Gardels, Esq.

  

		If to a Purchaser:	To the address set forth under such Purchaser’s name on the signature page hereof;

 

or such other address
as may be designated in writing hereafter, in the same manner, by such Person.

 

6.4         Amendments;
Waivers; No Additional Consideration. No provision of this Agreement may be waived, modified,
supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers holding
or having the right to acquire 66 2/3% of the Shares and the Warrant Shares on a fully-diluted basis at the time of such amendment
(which amendment shall be binding on all Purchasers or, in the case of a waiver, by the party against whom enforcement of any such
waiver is sought; provided, that any amendment, waiver modification or supplement of this Agreement that modifies the Subscription
Amount of any Purchaser, the Purchase Price or Section 2.1(a) or (c), Section 2.2, Section 3.1(aa). Section 4.6 or this Section
6.4 of this Agreement or causes any such Purchaser to assume any additional liability or material obligation, may be effected only
pursuant to a written instrument signed by the Company and such Purchaser. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such right. No consideration shall be offered or paid to
any Purchaser to amend or consent to a waiver or modification of any provision of any Transaction Document unless the same consideration
is also offered to all Purchasers who then hold Securities.

 

    	33

    	 

    
 

6.5         Construction.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. 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. This Agreement shall be construed as
if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue
of the authorship of any provisions of this Agreement or any of the Transaction Documents.

 

6.6         Successors
and Assigns. The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors
and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the written
consent of Purchasers holding or having the right to acquire 66 2/3% of the Shares and the Warrant
Shares on a fully-diluted basis at the time of such consent except to a successor in the event of a Fundamental Transaction..
Any Purchaser may assign its rights hereunder in whole or in part to any Person to whom such Purchaser assigns or transfers any
Securities in compliance with the Transaction Documents and applicable law, provided that such transferee shall agree in writing
to be bound, with respect to the transferred Securities, by the terms and conditions of this Agreement that apply to the “Purchasers”.

 

6.7         No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except (i)
the Placement Agent is an intended third party beneficiary of Article III hereof and
(ii) each Purchaser Party is an intended third party beneficiary of Section 4.10.

 

6.8         Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the New York Courts. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper
or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served
in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. 

 

    	34

    	 

    
 

6.9         Survival.
Subject to applicable statute of limitations, the representations, warranties agreements and covenants contained herein shall survive
the Closing and the delivery of the Securities.

 

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

 

6.11       Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Agreement.

 

6.12       Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights.

 

6.13       Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof,
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company and the Transfer Agent of such loss, theft or destruction and the execution by the holder thereof of a customary
lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company and the Transfer Agent for
any losses in connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is required by the
Transfer Agent. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities. If a replacement certificate or instrument evidencing any Securities
is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition
precedent to any issuance of a replacement.

 

    	35

    	 

    
 

6.14       Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the
foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation (other than in connection
with any action for a temporary restraining order) the defense that a remedy at law would be adequate.

 

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

 

6.16       Adjustments
in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution
payable in shares of Common Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly
or indirectly shares of Common Stock), combination or other similar recapitalization or event occurring after the date hereof and
prior to the Closing, each reference in any Transaction Document to a number of shares or a price per share shall be deemed to
be amended to appropriately account for such event. 

 

6.17       Independent
Nature of Purchasers' Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way
for the performance of the obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to
purchase Securities pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser
and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary which may
have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser and any of
its agents or employees shall have any liability to any other Purchaser (or any other Person) relating to or arising from any such
information, materials, statement or opinions. Nothing contained herein or in any Transaction Document, and no action taken by
any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect
to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser acknowledges that no other Purchaser
has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as
agent of such Purchaser in connection with monitoring its investment in the Securities or enforcing its rights under the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights
arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience only, Purchasers
and their respective counsels have chosen to communicate with the Company through Goodwin Procter LLP, counsel to the Placement
Agent. Each Purchaser acknowledges that Goodwin Procter LLP has rendered legal advice to the Placement Agent and not to such Purchaser
in connection with the transactions contemplated hereby, and that each such Purchaser has relied for such matters on the advice
of its own respective counsel. The Company has elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested to do so by any Purchaser. 

 

    	36

    	 

    
 

6.18       Termination.
This Agreement may be terminated and the sale and purchase of the Shares and the Warrants abandoned at any time prior to the Closing
by either the Company or any Purchaser (with respect to itself only) upon written notice to the other, if the Closing has not been
consummated on or prior to 5:00 p.m., New York City time, on the Outside Date; provided, however,
that the right to terminate this Agreement under this Section 6.18 shall not be available to any Person whose failure to comply
with its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before
such time. Nothing in this Section 6.18 shall be deemed to release any party from any liability for any breach by such party of
the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific
performance by any other party of its obligations under this Agreement or the other Transaction Documents. In the event of a termination
pursuant to this Section 6.18, the Company shall promptly notify all non-terminating Purchasers. Upon a termination in accordance
with this Section 6.18, the Company and the terminating Purchaser(s) shall not have any further obligation or liability (including
arising from such termination) to the other, and no Purchaser will have any liability to any other Purchaser under the Transaction
Documents as a result therefrom. The Company and any Purchaser(s) may extend the term of this Agreement in accordance with the
amendment provisions of Section 6.4 herein.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

    	37

    	 

    

 

Exhibit 10.1 

 

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

 

	 	TRANSGENOMIC, INC.
	 	 	 
	 	By:	/s/ Craig J. Tuttle
	 	 	Name:  Craig J. Tuttle
	 	 	Title:  President / Chief Executive Officer

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGES for purchasers FOLLOW]

 

    	 

    	 

    

 

	 	NAME OF PURCHASER: ________________________
	 	 
	 	By: ____________________________
	 	Name:
	 	Title:
	 	 
	 	Aggregate Purchase Price (Subscription Amount):
    $______________________
	 	 
	 	Number of Shares to be Acquired: ______________________
	 	 
	 	Underlying Shares Subject to Warrant: ________________
	 	(50% of the number of Shares to be acquired)
	 	 
	 	Tax ID No.: ____________________
	 	 
	 	Address for Notice/Residency of Purchaser:
	 	 
	 	 
	 	 
	 	 
	 	Telephone No.:   _______________________
	 	 
	 	Facsimile No.:   ________________________
	 	 
	 	E-mail Address:   ________________________
	 	 
	 	Attention:  _______________________

 

	Delivery Instructions:
	(if different than above)
	 
	c/o  _______________________________
	 
	Street:   ____________________________
	 
	City/State/Zip: ______________________
	 
	Attention: __________________________
	 
	Telephone No.: ____________________________

 

    	 

    	 

    

 

EXHIBITS:

 

	A:	Form of Warrant
	B:	Form of Registration Rights Agreement
	C-1:	Accredited Investor Questionnaire
	C-2:	Stock Certificate Questionnaire
	D:	Form of Opinion of Company Counsel
	E:	Form of Irrevocable Transfer Agent Instructions
	F:	Form of Secretary’s Certificate
	G:	Form of Officer’s Certificate

 

    	 

    	 

    

 

Exhibit
A

 

Form of Warrant

 

(Filed as Exhibit 10.3)

 

    	 

    	 

    

 

Exhibit
B

 

Form of Registration Rights Agreement

 

(Filed as Exhibit 10.4)

 

    	 

    	 

    

 

Instruction Sheet

 

(to be read in conjunction with the entire Securities
Purchase Agreement

and Registration Rights Agreement)

 

		A.	Complete the following items in the Securities Purchase Agreement and/or Registration Rights Agreement:

 

		1.	Provide the information regarding the Purchaser requested on the signature page. The Securities
Purchase Agreement and the Registration Rights Agreement must be executed by an individual authorized to bind the Purchaser.

 

		2.	Exhibit C-1 – Accredited Investor Questionnaire:

 

			Provide the information requested by the Accredited Investor Questionnaire

 

		3.	Exhibit C-2 Stock Certificate Questionnaire:

 

			Provide the information requested by the Stock Certificate Questionnaire

 

		4.	Annex B to the Registration Rights Agreement — Selling Securityholder Notice and Questionnaire

 

			Provide the information requested by the Selling Securityholder Notice and Questionnaire

 

		5.	Return the signed Securities Purchase Agreement and Registration Rights Agreement to:

Mary Ann Borgerding

Craig-Hallum Capital Group LLC

222 South Ninth Street, Suite 350

Minneapolis, MN 55402

Tel: (612) 334-6346

Fax: (612) 334-6399

Email: mborgerding@craig-hallum.com

 

		B.	Instructions regarding the transfer of funds for the purchase of Securities is set forth below.

 

	 	Name of Bank:	Private Bank Minnesota
	 	City/State of Bank:	Minneapolis, MN
	 	ABA Number:	091005836
	 	Name of Account:	TBIO Escrow Account
	 	Account Number:	3040938

 

    	 

    	 

    

 

EXHIBIT C-1

 

ACCREDITED INVESTOR QUESTIONNAIRE

 

(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

 

To:Transgenomic, Inc.

 

 This Investor Questionnaire (“Questionnaire”)
must be completed by each potential investor in connection with the offer and sale of the shares of the common stock, par value
$0.01 per share, certain warrants and shares of common stock that may be issued upon exercise of such warrants (collectively,
the “Securities”), of Transgenomic, Inc., a Delaware corporation (the “Corporation”). The
Securities are being offered and sold by the Corporation without registration under the Securities Act of 1933, as amended (the
“Act”), and the securities laws of certain states, in reliance on the exemptions contained in Section 4(2)
of the Act and on Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. The Corporation
must determine that a potential investor meets certain suitability requirements before offering or selling Securities to such
investor. The purpose of this Questionnaire is to assure the Corporation that each investor will meet the applicable suitability
requirements. The information supplied by you will be used in determining whether you meet such criteria, and reliance upon the
private offering exemptions from registration is based in part on the information herein supplied.

 

This Questionnaire does not constitute an offer
to sell or a solicitation of an offer to buy any security. Your answers will be kept strictly confidential. However, by signing
this Questionnaire, you will be authorizing the Corporation to provide a completed copy of this Questionnaire to such parties as
the Corporation deems appropriate in order to ensure that the offer and sale of the Securities will not result in a violation of
the Act or the securities laws of any state and that you otherwise satisfy the suitability standards applicable to purchasers of
the Securities. All potential investors must answer all applicable questions and complete, date and sign this Questionnaire. Please
print or type your responses and attach additional sheets of paper if necessary to complete your answers to any item.

 

PART A.BACKGROUND INFORMATION

 

Name of Beneficial Owner of the Securities:
_______________________________________________________________

  

Business Address: ___________________________________________________________________________________

(Number and
Street)

__________________________________________________________________________________________________

	(City)	(State)	(Zip Code)

 

Telephone Number: (___)_____________________________________________________________________________

 

If a corporation, partnership, limited liability
company, trust or other entity:

Type of entity: _____________________________________________________________________________________

 

    	 

    	 

    
 

State of formation:______________________ Approximate
Date of formation: __________________________________

 

Were you formed
for the purpose of investing in the securities being offered?

 

Yes ____      No
____

 

If an individual:

 

Residence Address: __________________________________________________________________________________

(Number and
Street)

__________________________________________________________________________________________________

	(City)	(State)	(Zip Code)

 

Telephone Number: (___)______________________________________________________________________________

 

Age: __________   Citizenship: ____________
  Where registered to vote: _______________

 

Set forth in the space provided below the state(s),
if any, in the United States in which you maintained your residence during the past two years and the dates during which you resided
in each state:

 

Are you a director
or executive officer of the Corporation?

 

Yes ____     
No ____

 

Social Security or Taxpayer Identification
No. ______________________________________________________________

 

PART B.          ACCREDITED INVESTOR QUESTIONNAIRE

 

In order for the Company
to offer and sell the Securities in conformance with state and federal securities laws, the following information must be obtained
regarding your investor status. Please initial each category applicable to you as a Purchaser of Securities of the
Company.

 

__ (1) A bank
as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;

 

__ (2) A broker
or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;

  

    	 

    	 

    
 

		__ (3) 	An insurance company as defined in Section 2(13) of the Securities Act;

 

		__ (4) 	An investment company registered under the Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of such act;

 

		__ (5) 	A Small Business Investment Company licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958;

 

		__ (6)	 A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality
of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

 

		__ (7) 	An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974,
if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings
and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in
excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

 

		__ (8) 	A private business development company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940;

 

		__ (9) 	An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts
or similar business trust, or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in
excess of $5,000,000;

 

__ (10)   A trust,
with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed
by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of
evaluating the merits and risks of investing in the Company;

 

___(11)  A natural
person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000
(excluding the value of such persons’ primary residence);

 

___(12)  A natural
person who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s
spouse in excess of $300,000, in each of those years, and has a reasonable expectation of reaching the same income level in the
current year;

 

 

    	 

    	 

    
 

___(13)  An executive
officer or director of the Company;

 

___(14)  An entity
in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category
only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies.

 

A.          FOR EXECUTION BY AN INDIVIDUAL:

 

	 	 	 	By	 	 
	 	Date	 	 	 	 
	 	 	 	Print Name:	 	 

 

B.          FOR EXECUTION BY AN ENTITY:

 

	 	 	 	Entity Name:	 	 

 

	 	 	 	By	 	 
	 	Date	 	 	 	 
	 	 	 	Print Name:	 	 
	 	 	 	Title:	 	 

 

		C.	ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):

 

	 	 	 	Entity Name:	 	 

 

	 	 	 	By	 	 
	 	Date	 	 	 	 
	 	 	 	Print Name:	 	 
	 	 	 	Title:	 	 

 

	 	 	 	Entity Name:	 	 

 

	 	 	 	By	 	 
	 	Date	 	 	 	 
	 	 	 	Print Name:	 	 
	 	 	 	Title:	 	 

 

    	 

    	 

    

  

Exhibit
C-2

 

Stock Certificate Questionnaire

 

Pursuant to Section 2.2(b) of the Agreement,
please provide us with the following information:

 

	1.	The exact name that the Securities are to be registered in (this is the name that will appear on the stock certificate(s)).  You may use a nominee name if appropriate:	 
	 	 	 
	2.	The relationship between the Purchaser of the Securities and the Registered Holder listed in response to Item 1 above:	 
	 	 	 
	3.	The mailing address, telephone and telecopy number of the Registered Holder listed in response to Item 1 above:	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	4.	The Tax Identification Number (or, if an individual, the Social Security Number) of the Registered Holder listed in response to Item 1 above:	 

 

    	 

    	 

    

 

Exhibit
D

 

Form of Opinion of Company Counsel

 

		1.	The Company is a corporation existing and in good standing under the laws of the State of Delaware, with the corporate power
and authority to (i) execute, deliver and perform the Purchase Agreement, the Registration Rights Agreement and the Warrants (collectively,
the “Transaction Documents”) and (ii) conduct its business and own or lease its properties as described
in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010. The Company is qualified to do business
as a foreign corporation in (i) the State of California and (ii) the State of Nebraska.

 

		2.	Each of the Transaction Documents has been authorized by all necessary corporate action of, and executed and delivered by,
the Company, and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with
its terms.

 

		3.	The execution, delivery and performance of the Transaction Documents by the Company, the compliance with the terms and
provisions thereof by the Company and the issuance and sale of the Securities by the Company will not violate any law or regulation
known to us to be generally applicable to transactions of this type (other than federal and state securities or “blue sky”
laws, as to which no opinion is expressed in this paragraph) or violate or result in a default under any of the terms and provisions
of Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), or Amended
Bylaws of the Company (the “Bylaws”) or any agreement to which the Company is a party or bound (this
opinion being limited (i) to those agreements identified on Exhibit B attached hereto and (ii) in that we express no
opinion with respect to any violation or default (a) arising under or based upon any cross-default provision insofar as it relates
to a violation or default under an agreement not identified on Exhibit B attached hereto or (b) arising as a result of any
violation or default under any agreement or covenant by failure to comply with any financial or numerical requirement requiring
computation).

 

		4.	The Company has an authorized equity capitalization of [________] shares of Common Stock and [______] shares of preferred stock.

 

		5.	The Shares have been authorized by all necessary corporate action of the Company and, when issued and delivered to the Purchasers
pursuant to the Purchase Agreement against payment of the consideration therefor as provided therein, will be validly issued, fully
paid and nonassessable.

 

    	 

    	 

    
 

		6.	The Warrant Shares initially issuable upon exercise of the Warrants have been authorized by all necessary corporate action
of the Company and, when and if issued upon exercise of the Warrants in accordance with the terms thereof against payment of the
consideration therefor as provided therein, will be validly issued, fully paid and nonassessable.

 

		7.	The holders of shares of Common Stock are not entitled to any (i) pre-emptive rights pursuant to the General Corporation Law
of the State of Delaware (the “DGCL”) or the Certificate of Incorporation or Bylaws or (ii) contractual
pre-emptive rights under those agreements identified on Exhibit B attached hereto.

 

		8.	No consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required in
connection with the execution, delivery or performance of the Transaction Documents by the Company, or in connection with the issuance
or sale of the Securities by the Company to the Purchasers, except (i) for the filing of Form D with the Securities and Exchange
Commission, (ii) periodic and other reporting requirements under the Securities Exchange Act of 1934 and the rules and regulations
thereunder and (iii) as may be required under state securities or “blue sky” laws.

 

		9.	It is not necessary in connection with the offer and sale of the Securities to the Purchasers under the Purchase Agreement
to register the Securities under the Securities Act of 1933 assuming the accuracy of the representations and warranties of the
Purchasers in the Purchase Agreement.

 

		10.	To our actual knowledge, there is no litigation nor any governmental proceeding involving the Company, pending or threatened,
that challenges the validity or enforceability of the Purchase Agreement or the Registration Rights Agreement, or seeks to enjoin
the performance of the Purchase Agreement or the Registration Rights Agreement by the Company.

 

		11.	The Company is not required to register as an “investment company,” as such term is defined in the Investment Company
Act of 1940.

 

    	 

    	 

    

 

EXHIBIT E

 

Irrevocable Transfer Agent Instructions

 

As of February [___], 2012

 

Wells Fargo Bank Minnesota, N.A. - Shareowner
Services

P.O. Box 64854

St. Paul, MN 55164-0854

Attn: _________________

 

Ladies and Gentlemen:

 

Reference is made to that
certain Securities Purchase Agreement, dated as of February 2, 2012 (the “Agreement”), by and among Transgenomic, Inc.,
a Delaware corporation (the “Company”), and the purchasers named on the signature pages thereto (collectively, and
including permitted transferees, the “Holders”), pursuant to which the Company is issuing to the Holders shares (the
“Shares”) of Common Stock of the Company, par value $0.01 per share (the “Common Stock”), and warrants
(the “Warrants”), which are exercisable into shares of Common Stock (the “Warrant Shares”).

 

This letter shall serve
as our irrevocable authorization and direction to you (provided that you are the transfer agent of the Company at such time and
the conditions set forth in this letter are satisfied), subject to any stop transfer instructions that we may issue to you from
time to time, if any, to issue certificates representing shares of Common Stock upon transfer or resale of the Shares or Warrant
Shares.

 

You acknowledge and agree
that so long as you have received written confirmation from the Company’s legal counsel that a registration statement covering
resales of the Shares and the Warrant Shares has been declared effective by the Securities and Exchange Commission (the “Commission”)
under the Securities Act of 1933, as amended (the “Securities Act”), and a copy of such registration statement, then,
unless otherwise required by law, you shall use your commercially reasonable efforts to issue the certificates representing the
Shares or Warrant Shares registered in the names of such Holders or transferees, as the case may be, within three business days
of your receipt of a notice of transfer of Shares or Warrant Shares, and such certificates shall not bear any legend restricting
transfer of the Shares or Warrant Shares thereby and should not be subject to any stop-transfer restriction.

 

A form of written confirmation
from the Company’s outside legal counsel that a registration statement covering resales of the Shares and the Warrant Shares
has been declared effective by the Commission under the Securities Act (which confirmation shall be delivered to you upon effectiveness
of the registration statement) is attached hereto as Annex I.

 

Please be advised that
the Holders are relying upon this letter as an inducement to enter into the Agreement and, accordingly, each Holder is a third
party beneficiary to these instructions.

 

Please execute this letter
in the space indicated to acknowledge your agreement to act in accordance with these instructions.

 

[Signature page follows]

 

    	 

    	 

    

 

	Very truly yours,
	 
	TRANSGENOMIC, INC.
	 	 
	By:	 
	Name:	 
	Title:	 

 

Acknowledged and Agreed:

 

Wells
Fargo Bank Minnesota, N.A. - Shareowner Services

 

	By:	 
	Name:	 
	Title:	 
	 	 
	Date:  _________________, 2012

 

    	 

    	 

    

 

 

Annex I

 

FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION
STATEMENT 

 

Wells Fargo Bank Minnesota, N.A. - Shareowner
Services

P.O. Box 64854

St. Paul, MN 55164-0854

Attn: _________________

 

Re: Transgenomic, Inc.

 

Ladies and Gentlemen:

 

Transgenomic, Inc., a Delaware
corporation (the “Company”), has entered into a Securities Purchase Agreement, dated as of February 2, 2012,
with the buyers named therein (collectively, the “Purchasers”) pursuant to which the Company issued to the Purchasers
shares of the Company’s common stock, $0.01 par value per share (the “Common Stock”), and warrants exercisable
for shares of Common Stock (the “Warrants”). Pursuant to that certain Registration Rights Agreement of even
date, the Company agreed to register the resale of the Common Stock, including the shares of Common Stock issuable upon exercise
of the Warrants (collectively, the “Registrable Securities”), under the Securities Act of 1933, as amended (the
“Securities Act”). In connection with the Company’s obligations under the Registration Rights Agreement,
on                     ,
____, the Company filed a Registration Statement on Form S-1 (File No. 333-                    )
(the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”)
relating to the Registrable Securities which names each of the Purchasers as a selling stockholder thereunder and set forth as
Exhibit A hereto.

 

In connection with the
foregoing, we advise you that a member of the Commission’s staff has advised us by telephone that the Commission has entered
an order declaring the Registration Statement effective under the Securities Act at ____ [a.m.][p.m.] on __________, ____, and
we have no knowledge, after telephonic inquiry of a member of the staff, that any stop order suspending its effectiveness has been
issued or that any proceedings for that purpose are pending before, or threatened by, the Commission and the Registrable Securities
are available for resale under the Securities Act pursuant to the Registration Statement. Based upon the foregoing, we are of the
opinion that as of the date of this opinion, the Registrable Securities have been duly authorized and, when issued by you, will
be validly issued, fully paid and non-assessable, and are registered for resale under the Securities Act under the effective Registration
Statement and may be issued without a restrictive legend.

 

This letter shall serve
as our standing notice to you that the Common Stock may be freely transferred by the Purchasers pursuant to the Registration Statement.
You need not require further letters from us to effect any future legend-free issuance or reissuance of shares of Common Stock
to the Purchasers or the transferees of the Purchasers, as the case may be, as contemplated by the Company’s Irrevocable
Transfer Agent Instructions dated __________, 2012, provided at the time of such reissuance, the Company has not otherwise notified
you that the Registration Statement is unavailable for the resale of the Registrable Securities. This letter shall serve as our
standing instructions with regard to this matter.

 

[Signature page follows]

 

    	 

    	 

    

 

	 	Very truly yours,
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	 

    	 

    

 

EXHIBIT F

 

Form of Secretary’s Certificate

  

The undersigned hereby
certifies that he is the duly elected, qualified and acting Secretary of Transgenomic, Inc., a Delaware corporation (the “Company”),
and that as such he is authorized to execute and deliver this certificate in the name and on behalf of the Company and in connection
with the Securities Purchase Agreement, dated as of February 2, 2012, by and among the Company and the investors party thereto
(the "Securities Purchase Agreement"), and
further certifies in his official capacity, in the name and on behalf of the Company, the items set forth below. Capitalized terms
used but not otherwise defined herein shall have the meaning set forth in the Securities Purchase Agreement.

 

(a)      Attached
hereto as Exhibit A is a true, correct and complete copy of the resolutions duly adopted by the Board of Directors of the Company
(the “Board”) at a meeting of the Board held on [_____, ____] approving the transactions contemplated by the Securities
Purchase Agreement and the other Transaction Documents and the issuance of the Securities. Such resolutions have not in any way
been amended, modified, revoked or rescinded, have been in full force and effect since their adoption to and including the date
hereof and are now in full force and effect. 

 

(b)      Attached
hereto as Exhibit B is a true, correct and complete copy of the Certificate of Incorporation of the Company, together with any
and all amendments thereto currently in effect, and no action has been taken to further amend, modify or repeal such Certificate
of Incorporation, the same being in full force and effect in the attached form as of the date hereof. 

 

(c)      Attached
hereto as Exhibit C is a true, correct and complete copy of the Bylaws of the Company and any and all amendments thereto currently
in effect, and no action has been taken to further amend, modify or repeal such Bylaws, the same being in full force and effect
in the attached form as of the date hereof.

 

(d)      Each
person listed below has been duly elected or appointed to the position(s) indicated opposite his name and is duly authorized to
sign the Securities Purchase Agreement and each of the Transaction Documents on behalf of the Company, and the signature appearing
opposite such person’s name below is such person’s genuine signature.

 

	Name	 	Position	 	Signature
	 	 	 	 	 
	[________]	 	Chief Executive Officer	 	 
	 	 	 	 	 
	[________]	 	Chief Financial Officer	 	 

  

    	 

    	 

    
 

IN WITNESS WHEREOF, the undersigned has hereunto
set his hand as of this ____ day of ______________, 2012.

 

	 	 
	 	[Name]
	 	Secretary

 

I, [Name], Chief Financial Officer, hereby
certify that [Name] is the duly elected, qualified and acting Secretary of the Company and that the signature set forth above is
his true signature.

  

	 	 
	 	[Name]
	 	Chief Financial Officer

 

    	 

    	 

    

 

EXHIBIT A

 

Resolutions

 

    	 

    	 

    

 

EXHIBIT B

 

Certificate of Incorporation

 

    	 

    	 

    

 

EXHIBIT C

 

Bylaws

 

    	 

    	 

    

 

EXHIBIT G

 

Form of Officer’s Certificate

 

The undersigned, the Chief Executive Officer
of Transgenomic, Inc., a Delaware corporation (the “Company”), pursuant to Section 5.1(h) of the Securities
Purchase Agreement, dated as of February 2, 2012, by and among the Company and the investors signatory thereto (the “Securities
Purchase Agreement”), hereby represents, warrants and certifies as follows (capitalized terms used but not otherwise
defined herein shall have the meaning set forth in the Securities Purchase Agreement):

 

		1.	The representations and warranties of the Company contained in the Securities Purchase Agreement
are true and correct in all material respects (except for those representations and warranties which are qualified as to materiality,
in which case, such representations and warranties shall be true and correct in all respects) as of the date when made and as of
the date hereof, as though made on and as of such date, except for such representations and warranties that speak as of a specific
date.

 

		2.	The Company has performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to
the date hereof.

  

IN WITNESS WHEREOF,
the undersigned has executed this certificate this ___ day of ___________, 2012

 

	 	 
	 	[Name]
	 	Chief Executive Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00198-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00198-of-00352.parquet"}]]