Document:

Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of April 3, 2016, between Staffing 360 Solutions, Inc., a Nevada corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, a “Purchaser” and collectively the “Purchasers”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act
of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in
this Agreement.

 

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

 

ARTICLE I.

DEFINITIONS

 

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

 

“Acquiring Person” shall have the meaning ascribed to
such term in Section 4.4.

 

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

 

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

 

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

 

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

 

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

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Shares, in each case, have been satisfied or waived, but in no event later than
the third Trading Day following the date hereof.

 

    	 	1	 

     

    

 

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

 

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

 

“Common
Stock” means the common stock of the Company, par value $0.00001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

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

 

“Company
Counsel” means Jenner & Block LLP, with offices located at 919 Third Avenue, New York, NY 10022.

 

“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

 

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

 

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

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the
Company, (b) shares of Common Stock upon the exercise or exchange of or conversion of securities exercisable or exchangeable for
or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities
have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price,
exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend
the term of such securities, and (c) securities issued pursuant to 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 (or to the equityholders
of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic
with the business of the Company and shall provide to the Company additional 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.

 

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

 

    	 	2	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.9(a).

 

“PC”
means Pryor Cashman LLP, with offices located at 7 Times Square, New York, New York 10036-6569.

 

“Per
Share Purchase Price” equals $2.85, subject to adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

 

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

 

“Placement
Agent” means Joseph Gunnar & Co., LLC.

 

“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.9(b).

 

“Pro
Rata Portion” shall have the meaning ascribed to such term in Section 4.9(e).

 

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

 

“Prospectus”
means the final prospectus filed for the Registration Statement.

 

“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to each Purchaser at the Closing.

 

    	 	3	 

     

    

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.7.

 

“Registration
Statement” means the effective registration statement with Commission File No. 333-208910 which registers the sale of
the Shares.

 

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

 

“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or then potentially
issuable assuming no further adjustments in the future pursuant to the Transaction Documents, including any Underlying Shares issuable
upon conversion in full of all shares of Preferred Stock, ignoring any conversion limits set forth therein, and that any previously
unconverted shares of Preferred Stock are held until the third anniversary of the Closing Date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.9(a).

 

“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.9(b).

 

    	 	4	 

     

    

 

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

 

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

 

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

 

“Transaction
Documents” means this Agreement and any other documents or agreements executed in connection with the transactions contemplated
hereunder.

 

“Transfer
Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette
Place, Woodmere, New York 11598 and a facsimile number of (646) 536-3179, and any successor transfer agent of the Company.

 

“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Series C Preferred Stock of the Company.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1          Closing.

 

(a)          On
the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree
to purchase, up to an aggregate of $1,501,950 of Shares. Each Purchaser’s Subscription Amount as set forth on the signature
page hereto executed by such Purchaser shall be made available for “Delivery Versus Payment” settlement with the Company.
The Company shall deliver to each Purchaser its respective Shares, and the Company and each Purchaser shall deliver the other items
set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2
and 2.3, the Closing shall occur at the offices of PC or such other location as the parties shall mutually agree.

 

(b)          Within
five Business Days of the Closing Date, Purchaser shall purchase, and the Company shall sell, 175,439 shares (the “Series
C Shares”) of the Company’s Series C Preferred Stock, par value $0.00001, for an aggregate of $500,000 (the “Second
Closing Date”). The sole and only condition precedent to the obligation of the Purchaser to purchase such Series C Shares
on a date that is within five Business Days of the Closing Date, along with the conditions set forth in Section 2.3(b) which are
applicable to the Second Closing Date, is that the Company shall have filed an amendment to its organizational documents in Nevada
to permit the issuance of the Series C Shares. If such filing is not made within five Business Days of the Closing Date, then the
Purchaser shall have no further obligations to purchase any securities pursuant to this Section 2.1(b). In addition, if for any
reason the Purchaser shall not have received a certificate representing the Series C Shares by April 12, 2016, then the Company
shall within one Business Day send to Purchaser, by wire transfer of immediately available funds, as liquidated damages and not
as a penalty, $100,000.

 

    	 	5	 

     

    

 

2.2          Deliveries.

 

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

 

(i)          this
Agreement duly executed by the Company;

 

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

 

(iii)          a
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via
The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) Shares equal to such Purchaser’s
Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser; and

 

(iv)          the
Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).

 

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

 

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

 

(ii)          Such
Purchaser’s Subscription Amount, which shall be made available immediately upon receipt of the Shares.

 

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

 

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

 

(ii)          a
certificate representing the Series C Shares; and

 

(iii)          the
Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).

 

(d)          On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company, such Purchaser’s Subscription
Amount for the Second Closing, which shall be made available immediately upon receipt of the Series C Shares.

 

    	 	6	 

     

    

 

2.3          Closing
Conditions. 

 

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

 

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

 

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

 

(iii)          the
delivery by each Purchaser of the items set forth in Section 2.2(b) or Section 2.2(d), as applicable, of this Agreement.

 

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

 

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

 

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

 

(iii)          the
delivery by the Company of the items set forth in Section 2.2(a) and Section 2.2(c), as applicable, of this Agreement;

 

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

 

(v)          from
the date hereof to the Closing Date or Second Closing Date, as applicable, trading in the Common Stock shall not have been suspended
by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established
on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared
either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of
hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in,
any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to
purchase the Shares at the Closing.

 

    	 	7	 

     

    

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

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

 

    	 	8	 

     

    

 

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

 

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

 

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

 

    	 	9	 

     

    

 

(f)          Issuance
of the Shares; Registration. The Shares are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable
pursuant to this Agreement. The Company has prepared and filed the Registration Statement in conformity with the requirements of
the Securities Act, which became effective on March 22, 2016 (the “Effective Date”), including the Prospectus,
and such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement
is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement
or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have
been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and
regulations of the Commission, shall file the Prospectus with the Commission pursuant to Rule 424(b). At the time the Registration
Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration
Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities
Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements
thereto, at time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform
in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading.

 

(g)          Capitalization.
The capitalization of the Company is as set forth on Schedule 3.1(g). Except for the issuance of less than 171,610 shares
of Common Stock and 20,000 shares of Series B Preferred Stock of the Company as set forth on the attached schedule, the Company
has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the
exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees
pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as a result of the purchase and sale of the Shares, there are no outstanding options, warrants, scrip
rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock
or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary
is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary.
The issuance and sale of the Shares will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities
to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities. There are no outstanding securities or instruments of the Company
or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary.
The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Shares. There are
no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to
which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

    	 	10	 

     

    

 

(h)          SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with
the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on
a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The Company has not been an issuer subject
to Rule 144(i) under the Securities Act since January 1, 2013. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as
may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may
not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

    	 	11	 

     

    

 

(i)          Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has
been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v)
the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except
for the issuance of the Shares contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact,
circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the
Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that
would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

 

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

 

    	 	12	 

     

    

 

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

 

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

 

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

 

    	 	13	 

     

    

 

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

 

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

 

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

 

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

 

    	 	14	 

     

    

  

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

 

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

 

    	 	15	 

     

    

 

(t)          Certain
Fees. Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be payable
by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank
or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in
this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

 

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

 

(v)          Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act
of any securities of the Company or any Subsidiary.

 

(w)          Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on
which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible
for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current
in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such
electronic transfer.

 

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

 

    	 	16	 

     

    

 

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

 

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

 

(aa)          Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Shares hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry
on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(aa)
sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which
the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x)
any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary
course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether
or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance
with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

    	 	17	 

     

    

 

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

 

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

 

(dd)          Accountants.
The Company’s accounting firm is RBSM LLP. To the knowledge and belief of the Company, such accounting firm (i) is a registered
public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements
to be included in the Company’s Annual Report for the fiscal year ending May 31, 2016.

 

    	 	18	 

     

    

 

(ee)          
Acknowledgment Regarding Purchasers’ Purchase of Shares. The Company acknowledges and agrees that each of the Purchasers
is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice
given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the
transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Shares. 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.

 

(ff)          Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except
for Sections 3.2(e) and 4.12 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been
asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities
of the Company, or “derivative” securities based on securities issued by the Company or to hold the Shares
for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently
may have a “short” position in the Common Stock, and (iv) each Purchaser shall not be deemed to have any affiliation
with or control over any arm’s length counter-party in any “derivative” transaction. The Company further
understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period
that the Shares are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing stockholders'
equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges
that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

 

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

 

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

 

    	 	19	 

     

    

 

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

 

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

 

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

 

(ll)          FDA.
Neither the Company nor any Subsidiary has, or has ever had, a product subject to the jurisdiction of the U.S. Food and Drug Administration
(“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”)
that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries.

 

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

 

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

 

    	 	20	 

     

    

 

(b)          Understandings
or Arrangements. Such Purchaser is acquiring the Shares as principal for its own account and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the distribution of such Shares (this representation and warranty
not limiting such Purchaser’s right to sell the Shares pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws). Such Purchaser is acquiring the Shares hereunder in the ordinary course of
its business.

 

(c)          Purchaser
Status. At the time such Purchaser was offered the Shares, it was, and as of the date hereof it is either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act.

 

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

 

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

 

    	 	21	 

     

    

 

(f)          Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any
purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material pricing terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth
above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision
to purchase the Shares covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s
representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents
and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability
of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

 

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

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1          Furnishing
of Information. Until the time that no Purchaser owns Shares, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

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

 

    	 	22	 

     

    

 

4.3          Securities
Laws Disclosure; Publicity. The Company shall, by 9:00 a.m. (New York time) on April 4, 2016, publicly disclose the material
terms of the transactions contemplated hereby by filing the Prospectus Supplement, and file a Current Report on Form 8-K, including
the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after
the issuance of such disclosure, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public
information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective
upon the issuance of such public disclosure, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers,
directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand,
shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect
to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise
make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or
without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably
be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide
the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory
agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law
in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required
by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure
permitted under this clause (b).

 

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

 

    	 	23	 

     

    

 

4.5          Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.3, the Company covenants and agrees that neither it, nor any other Person acting
on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably
believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt
of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that
each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent
that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company
hereby covenants and agrees that such purchaser shall not have any duty of confidentiality to Company, any of its Subsidiaries,
or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, and of its Subsidiaries
or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public
information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant
to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

4.6          Use
of Proceeds. Except as set forth on Schedule 4.6 attached hereto, the Company shall use the net proceeds from the sale
of the Shares hereunder for working capital purposes and shall not use such proceeds: (a) for the redemption of any Common Stock
or Common Stock Equivalents, or (b) in violation of FCPA or OFAC regulations.

 

4.7          Indemnification
of Purchasers. Subject to the provisions of this Section 4.7, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence,
willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may
be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall
have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not
be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a
loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties,
covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification
required by this Section 4.7 shall be made by periodic payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any
cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject
to pursuant to law.

 

    	 	24	 

     

    

 

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

 

4.9          Participation
in Future Financing.

 

(a)          From
the date hereof until the date that is the six month anniversary of the Closing Date, upon any issuance by the Company or any of
its Subsidiaries of Common Stock or Common Stock Equivalents for cash consideration or Indebtedness that is convertible into Common
Stock or Common Stock Equivalents or a combination of units hereof (a “Subsequent Financing”), each Purchaser
shall have the right to participate in up to an amount of the Subsequent Financing equal to 50% of the Subsequent Financing (the
“Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing. 
Notwithstanding the foregoing, the term “Subsequent Financing” shall not include the issuance of up to 150,000 unregistered
shares without registration rights of Common Stock or Common Stock Equivalents the Company may make to its lenders or suppliers
in connection with debts owing to its lenders or suppliers.

 

    	 	25	 

     

    

 

(b)          At
least five (5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser
if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). 
Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. 
The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount
of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed
to be effected and shall include a term sheet or similar document relating thereto as an attachment.   

 

(c)          Any
Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30
p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice that
such Purchaser is willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation, and representing
and warranting that such Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent
Financing Notice. If the Company receives no such notice from a Purchaser as of such fifth (5th) Trading Day, such Purchaser
shall be deemed to have notified the Company that it does not elect to participate. 

 

(d)          If
by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice,
notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to
participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may effect the remaining
portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice. 

 

(e)          If
by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice,
the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount
of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the
Participation Maximum.  “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Shares purchased
on the Closing Date by a Purchaser participating under this Section 4.9 and (y) the sum of the aggregate Subscription Amounts of
Shares purchased on the Closing Date by all Purchasers participating under this Section 4.9.

 

(f)          The
Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of
participation set forth above in this Section 4.9, if the Subsequent Financing subject to the initial Subsequent Financing Notice
is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after
the date of the initial Subsequent Financing Notice.

 

    	 	26	 

     

    

 

(g)          The
Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required to agree to
any restrictions on trading as to any of the Shares purchased
hereunder or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in
connection with, this Agreement, without the prior written consent of such Purchaser.

 

(h)          Notwithstanding
anything to the contrary in this Section 4.9 and unless otherwise agreed to by such Purchaser, the Company shall either confirm
in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser
will not be in possession of any material, non-public information, by the tenth (10th) Business Day following delivery of the Subsequent
Financing Notice. If by such tenth (10th) Business Day, no public disclosure regarding a transaction with respect to the Subsequent
Financing has been made, and no notice regarding the abandonment of such transaction has been received by such Purchaser, such
transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession of any material,
non-public information with respect to the Company or any of its Subsidiaries. 

 

(i)          Notwithstanding
the foregoing, this Section 4.9 shall not apply in respect of an Exempt Issuance.

 

4.10          Subsequent
Equity Sales.

 

(a)          From
the date hereof until 45 days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement
to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents.

 

(b)          From
the date hereof until 180 days after the Closing Date, the Company shall be prohibited from effecting or entering into an agreement
to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination
of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in
which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for,
or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise price or exchange
rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at
any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that
is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock
or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities
at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect damages.

 

    	 	27	 

     

    

 

(c)          Notwithstanding
the foregoing, this Section 4.10 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.

 

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

 

4.12          Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither
it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including
Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending
at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.3.  Each Purchaser, severally and not jointly with the other
Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company
pursuant to the initial press release as described in Section 4.3, such Purchaser will maintain the confidentiality of the existence
and terms of this transaction and the information included in the Disclosure Schedules.  Notwithstanding
the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.3, (ii) no Purchaser shall be restricted or prohibited from effecting
any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in
Section 4.3 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company
to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.3.  Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only
apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the
Shares covered by this Agreement.

 

4.13          Underlying
Shares. The shares of Common Stock underlying the Series C Preferred Stock shall be issued free of restrictive legends.

 

    	 	28	 

     

    

 

4.14          Reservation
and Listing of Securities.

 

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

 

(b)          If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate
of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such
time, as soon as possible and in any event not later than the 75th day after such date.

 

(c)          The
Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum
on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing
or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing or
quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on
such date on such Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock
for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such
electronic transfer.

 

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

 

ARTICLE V.

MISCELLANEOUS

 

5.1          Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing
has not been consummated on or before April 8, 2016; provided, however, that no such termination will affect the
right of any party to sue for any breach by any other party (or parties).

 

    	 	29	 

     

    

 

5.2          Fees
and Expenses. At the Closing, the Company has agreed to reimburse the Purchasers the non-accountable sum of $10,000 for its
legal fees and expenses. The Company shall deliver to each Purchaser, prior to the Closing, a completed and executed copy of the
Closing Statement, attached hereto as Annex A. Except as expressly set forth in the Transaction Documents to the contrary,
each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company
shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction
letter delivered by the Company), stamp taxes and other taxes and duties levied in connection with the delivery of any Shares to
the Purchasers.

 

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

 

5.4          Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile or email attachment at the facsimile number or email address as set forth on the signature pages attached hereto
at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile or email attachment at the facsimile number or email address as set forth on
the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the second (2nd)Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant
to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

 

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

 

    	 	30	 

     

    

 

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

 

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

 

5.8          No
Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and warranties of
the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended
for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.7 and this Section 5.8.

 

5.9          Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action
or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding
is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action
or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under
Section 4.7, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action
or Proceeding.

 

    	 	31	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	32	 

     

    

 

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

 

5.17          Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience only, each
Purchaser and its respective counsel have chosen to communicate with the Company through PC. PC does not represent any of the Purchasers
and only represents the Placement Agent. The Company has elected to provide all Purchasers with the same terms and Transaction
Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It
is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between
the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the
Purchasers.

 

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

 

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

  

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

 

(Signature Pages Follow)

 

    	 	33	 

     

    

 

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.

 

 

	
        STAFFING 360 SOLUTIONS,
        INC.

         

         
	Address for Notice:
	
        By: /s/ Brendan Flood_____________________________

        Name: Brendan Flood

        Title: Executive Chairman

         

         
	
        641 Lexington Ave, Suite 1526

        New York, NY 10022

	
         

         

         

         
	 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

    	 	34	 

     

    

 

[PURCHASER SIGNATURE PAGES TO SECURITIES
PURCHASE AGREEMENT]

 

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

 

Name of Purchaser: ________________________________________________________

Signature of Authorized Signatory of
Purchaser: _________________________________

Name of Authorized Signatory: _______________________________________________

Title of Authorized Signatory: ________________________________________________

Email Address of Authorized Signatory:
_________________________________________

Facsimile Number of Authorized Signatory: __________________________________________

Address for Notice to Purchaser:

 

 

 

 

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

 

 

 

 

 

Subscription Amount: $_________________

 

Shares: _________________

 

EIN Number: ____________________

 

o
Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed
to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed,
and the obligations of the Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing
shall be disregarded, (ii) the Closing shall occur on the third (3rd) Trading Day following the date of this Agreement
and (iii) any condition to Closing contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required
delivery by the Company or the above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable)
shall no longer be a condition and shall instead be an unconditional obligation of the Company or the above-signed (as applicable)
to deliver such agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing
Date.

 

 

[SIGNATURE PAGES CONTINUE]

 

    	 	35Exhibit 10.2

 

PLACEMENT AGENCY AGREEMENT

 

April 1, 2016

 

Joseph Gunnar & Co., LLC

30 Broad Street, 11th Fl

New York, NY 10004

 

Ladies and Gentlemen:

 

 

Introductory.
Staffing 360 Solutions, Inc., a Nevada corporation (the “Company”), proposes, subject to the terms and conditions herein,
to issue and sell an aggregate of up to $1,501,950 in shares (the “Shares”) of its common stock, $0.00001 par value
per share (the “Common Stock”), in one or more series directly to various investors (collectively, the “Investors”).
The Shares are sometimes herein collectively referred to as the “Securities.”

 

The Company hereby
confirms its agreement with the Placement Agent as follows:

 

Section 1.          Agreement
to Act as Placement Agent.

 

(a)          On
the basis of the representations, warranties and agreements of the Company herein contained, and subject to all the terms and conditions
of this agreement (the “Agreement”) between the Company and Joseph Gunnar & Co., LLC (“Joseph Gunnar”),
Joseph Gunnar shall be the Company’s non-exclusive placement agent (in such capacity, the “Placement Agent”),
on a reasonable efforts basis, in connection with the issuance and sale by the Company of the Securities in one or more proposed
takedowns from shelf Registration Statement No. 333-208910, or other registration statement(s) filed or to be filed to accomplish
the takedowns (collectively the “Registration Statement”), with the terms of each offering to be subject to market
conditions and negotiations between the Company, Joseph Gunnar and the prospective Investors (each takedown shall be referred to
herein as an “Offering”). As compensation for services rendered, and provided that any of the Securities are sold to
Investors in any Offering, on the Closing Date (as defined below) of each Offering, the Company shall pay to the Placement Agent
an amount in cash equal to 8% of the gross proceeds received by the Company from the sale of the Securities (the “Placement
Agent’s Fee”). The Company will pay the Placement Agent’s Fee by wire of immediately available funds to the instructions
provided in Exhibit A hereto immediately upon receipt of the proceeds of the Offering at each Closing Date.

 

This Agreement shall
not give rise to any commitment by the Placement Agent to purchase any of the Securities, and the Placement Agent shall have no
authority to bind the Company. The Placement Agent shall act on a reasonable efforts basis and does not guarantee that it will
be able to raise new capital in any prospective Offering. The Company acknowledges that any advice given by Joseph Gunnar to the
Company is solely for benefit and use of the Board of Directors of the Company and may not be used, reproduced, disseminated, quoted
or referred to, without the Placement Agent’s prior written consent. The Placement Agent may retain other brokers or dealers
to act as sub-agents on its behalf in connection with any Offering.

 

(b)          The
term of Joseph Gunnar's non-exclusive engagement will be six months; however, either party may terminate the engagement at any
time upon 30 days’ written notice to the other party. Upon termination, Joseph Gunnar will be entitled to collect all fees
earned and expenses incurred through the date of termination, and the amounts described in the next sentence, if applicable. If
Joseph Gunnar 's non- exclusive engagement is terminated prior to the expiration of the six month period beginning on the date
hereof ), any person to whom Placement Agent introduced the Company, or with which we have discussions or negotiations about an
investment in the Company during the term of this Agreement, purchases securities from the Company, the Company agrees to pay to
Placement Agent upon the closing of such transaction a cash fee in the amount that would otherwise have been payable to the Placement
Agent had such transaction occurred during the term. The Placement Agent shall provide the Company with a list of investors as
described in this section within five (5) business days of termination of this Agreement. Nothing in this Agreement shall be construed
to limit the ability of Joseph Gunnar or its affiliates to pursue, investigate, analyze, invest in, or engage in investment banking,
financial advisory or any other business relationship with entitles or persons other than the Company.

 

    	 	1	 

     

    

 

Section 2.          Representations,
Warranties and Agreements of the Company.

 

The Company hereby
represents, warrants and covenants to the Placement Agent as of the date hereof, and as of the Closing Date of each Offering, as
follows:

 

(a)          Securities
Law Filings. The Company meets the requirements for use of Form S-3 under the Securities Act of 1933, as amended (the “Act”),
and has filed with the Securities and Exchange Commission (the “Commission”) the Registration Statement on such Form
S-3 (Registration File No. 333-208910), which has become effective on March 22, 2016, for the registration under the Act of the
Securities. Such registration statement meets the requirements set forth in Rule 415(a)(1)(x) under the Act and complies in all
other material respects with said Rule. The Company will file with the Commission pursuant to Rule 424(b) under the Act a supplement
to the form of prospectus included in such registration statement relating to a placement of the Securities and the plan of distribution
thereof and has advised the Placement Agent of all further material information (financial and other) with respect to the Company
to be set forth therein. Such registration statement, including the exhibits thereto, as amended at the date of this Agreement,
is hereinafter called the “Registration Statement”; such prospectus in the form in which it appears in the Registration
Statement is hereinafter called the “Base Prospectus”; and the supplemented form of prospectus, in the form in which
it will be filed with the Commission pursuant to Rule 424(b) is hereinafter called a “Prospectus Supplement.” Any reference
herein to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include
the documents incorporated by reference therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or before the date of this
Agreement, or the issue date of the Base Prospectus or Prospectus Supplement, as the case may be; and any reference herein to the
terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the
Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the filing of any document under the Exchange
Act after the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may be,
deemed to be incorporated therein by reference. All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration Statement or the
Prospectus Supplement (and all other references of like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement or the
Prospectus Supplement, as the case may be.

 

(b)          No
Stop Order. No stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or the
Prospectus Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated or, to the Company’s
knowledge, is threatened by the Commission.

 

    	 	2	 

     

    

 

(c)          Compliance
with Applicable Regulations. The Registration Statement (and any further documents to be filed with the Commission) contains
all exhibits and schedules as required by the Act. Each of the Registration Statement and any post-effective amendment thereto,
at the time it became effective, complied in all material respects with the Act and the Exchange Act and the applicable rules and
regulations of the Commission thereunder and did not and, as amended or supplemented, if applicable, will not, contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading. Each of the Base Prospectus and the Prospectus Supplement, as of its respective date, complied in all material
respects with the Act and the Exchange Act and the applicable rules and regulations of the Commission thereunder. Each of the Base
Prospectus and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of the effective date thereof
any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable rules and regulations
of the Commission thereunder, and none of such documents, when they were filed with the Commission, contained any untrue statement
of a material fact or omitted to state a material fact necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Base Prospectus or Prospectus Supplement, when such documents are filed
with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder, as applicable, and will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading. Notwithstanding the foregoing, the Company makes
no representations or warranties as to the information contained in or omitted from the Prospectus Supplement or any amendment
thereof or supplement thereto in reliance upon and in conformity with information furnished in writing to the Company by or on
behalf of the Placement Agent specifically for use in the Registration Statement or the Prospectus Supplement. No post-effective
amendment to the Registration Statement reflecting any facts or events arising after the effective date thereof which represent,
individually or in the aggregate, a fundamental change in the information set forth therein is required to be filed with the Commission.

 

(d)          Reports
and Documents, etc. There are no documents required to be filed with the Commission in connection with the transaction contemplated
hereby that (x) have not been filed as required pursuant to the Act or (y) will not be filed within the requisite time period.
There are no contracts or other documents required to be described in the Prospectus Supplement, or to be filed as exhibits or
schedules to the Registration Statement, which have not been described or filed as required.

 

(e)          Offering
Materials Furnished to the Placement Agent. The Company has delivered, or will as promptly as practicable deliver, to the Placement
Agent complete conformed copies of the Registration Statement and of each consent and certificate of experts filed as a part thereof,
and conformed copies of the Registration Statement (without exhibits) and the Base Prospectus and the Prospectus Supplement, as
amended or supplemented, in such quantities and at such places as the Placement Agent reasonably requests.

 

(f)          Distribution
of Offering Material. The Company has not distributed and will not distribute, prior to the completion of the distribution
of the Securities, any offering material in connection with the offering and sale of the Securities other than the Base Prospectus
and the Prospectus Supplement or the Registration Statement and copies of the documents incorporated by reference therein. For
the avoidance of doubt, any other material prepared and distributed solely by the Placement Agent is not deemed to be distributed
by the Company for purposes of this paragraph (f).

 

(g)          The
Placement Agency Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable against the Company in accordance with its terms, except as rights to indemnification and
contribution hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable
principles.

 

    	 	3	 

     

    

 

(h)          Authorization
of the Securities. The Shares have been duly authorized for issuance and sale, and when issued and delivered by the Company
against payment therefor pursuant to this Agreement, will be validly issued, fully paid and nonassessable.

 

(i)          No
Material Adverse Change. Subsequent to the respective dates as of which information is given in the Base Prospectus and in
any Prospectus Supplement: (i) there has been no material adverse change or effect, or any development that could reasonably be
expected to result in a material adverse change or effect, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the ordinary course of business, of the Company and the Subsidiaries
(as defined) taken as a whole (any such change or effect, where the context so requires, is called a “Material Adverse Change”
or a “Material Adverse Effect”); (ii) the Company and the Subsidiaries have not incurred any material liability or
obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of capital stock or repurchase or redemption by the Company of any class of capital stock.

 

(j)          Independent
Accountants. RBSM LLP, who have expressed their opinion with respect to the annual financial statements (which term as used
in this Agreement includes the related notes and schedules thereto) and supporting schedules filed with the Commission as a part
of the Registration Statement and incorporated by reference in the Prospectus Supplement, are independent public or certified public
accountants as required by the Act and the Exchange Act.

 

(k)          Preparation
of the Financial Statements. The financial statements filed with the Commission as a part of the Registration Statement or
included or incorporated by reference in the Base Prospectus or Prospectus Supplement present fairly the financial position of
the Company and its consolidated subsidiaries as of and at the dates indicated and the results of their operations and cash flows
for the periods specified therein. The supporting exhibits and schedules included in the Registration Statement, if any, present
fairly the information required to be stated therein subject to the normal year-end adjustments which are not expected to be material
in amount. The assumptions used in preparing the pro forma financial statements, if any, provide a reasonable basis for presenting
the significant effects attributable to the transactions or events described therein, the related pro forma adjustments comply
with Regulation G and give appropriate effect to the assumptions and the pro forma columns and reconciliations therein reflect
the proper application of adjustments to the corresponding historical financial statements. Such financial statements and supporting
schedules, if any, have been prepared in conformity with generally accepted accounting principles as applied in the United States
(“GAAP”), as applicable, applied on a consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto and comply in all material respects with the Securities Act, the Exchange Act and the applicable
rules and regulations of the Commission thereunder. No other financial statements or supporting schedules or exhibits are required
by the Act or the rules and regulations of the Commission thereunder to be included in the Registration Statement or the Prospectus
Supplement.

 

(l)          Incorporation
and Good Standing. Each of the Company and its subsidiaries set forth in Exhibit B hereto (the “Subsidiaries”)
has been duly organized and is validly existing and, as applicable, is a corporation in good standing under the laws of its jurisdiction
of incorporation with full corporate power and authority to own its properties and other assets and conduct its business as described
in the Prospectus Supplement, and is duly qualified or licensed to do business as a foreign corporation and, as applicable, is
in good standing under the laws of each jurisdiction which requires such qualification or license, except where the failure to
be so qualified or in good standing would not have a Material Adverse Effect.

 

    	 	4	 

     

    

 

(m)          Capitalization
and Other Capital Stock Matters. The authorized, issued and outstanding capital stock of the Company is as set forth in the
Registration Statement and in each Prospectus Supplement (other than for issuances after the dates thereof, if any, pursuant to
employee benefit plans described in any Prospectus Supplement or upon exercise of outstanding options or warrants described in
any Prospectus Supplement). The Shares conform in all material respects to the description thereof contained in the Base Prospectus
and the Prospectus Supplement. As of March 31, 2016, there were 5,018,279 shares of common stock outstanding. Since March 31, 2016,
the Company has not issued any securities other than Common Stock of the Company pursuant to the exercise of previously outstanding
options in connection with the Company’s employee stock purchase and option plans (the “Plans”) and options granted
pursuant to the Plans in the ordinary course of business consistent with past practice, in each case as disclosed in the Base Prospectus
and each Prospectus Supplement. All the issued and outstanding shares of the capital stock of the Company and the Subsidiaries
have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance, in all material
respects, with federal and state securities laws, as applicable. Except as set forth in the Base Prospectus and each Prospectus
Supplement, all of the outstanding shares of capital stock of the Subsidiaries are owned, directly or indirectly, by the Company.
None of the outstanding shares of capital stock of the Company or any Subsidiary were issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or purchase securities. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital stock of the Company or any Subsidiary other than those described in the Base
Prospectus and each Prospectus Supplement. The description of the Company’s stock option, stock bonus and other stock plans
or arrangements, and the options, warrants or other rights granted thereunder, set forth in the Base Prospectus and the Prospectus
Supplement accurately and fairly presents the information required by the Act to be shown with respect to such plans, arrangements,
options and rights. Except as set forth in the Base Prospectus or in any Prospectus Supplement, the Company does not have any subsidiaries
or own directly or indirectly any of the capital stock or other equity or long-term debt securities or have any equity interest
in any other person.

 

(n)          Stock
Exchange Listing. The Common Stock (including the Shares) is registered under the Exchange Act and is listed on the NASDAQ
Capital Market (“NASDAQ”), and the Company has taken no action designed to, or likely to have the effect of terminating
the registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock from NASDAQ,
nor has the Company received any information suggesting that the NASDAQ is contemplating terminating or suspending such registration
or listing.

 

(o)          No
Transfer Taxes or Other Fees. There are no transfer Taxes or other similar fees or charges under United States law or the laws
of any state or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement
or the issuance and sale by the Company of the Securities.

 

(p)          No
Price Stabilization or Manipulation. The Company has not taken and will not take, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Securities.

 

(q)          Certificates.
Any certificate signed by an officer of the Company and delivered to the Placement Agent in connection herewith or in connection
with any Offering shall be deemed to be a representation and warranty by the Company to the Placement Agent as to the matters set
forth therein.

 

    	 	5	 

     

    

 

(r)          No
Third Parties. The Company represents to Joseph Gunnar that the Company has not engaged and is not working with any third party
finder in connection with the Offering or the introduction of the Company to Joseph Gunnar and the Company agrees not to engage,
work with or pay fees to any third party finder in connection with the Offering or the introduction of the Company to Joseph Gunnar.
The Company represents and warrants to Joseph Gunnar that the entry into this Agreement or any other action of the Company in connection
with the Offering will not violate any agreement between the Company and any other broker dealer.

 

Section 3.          Future
Transactions.

 

For a period of twelve
months from the Closing Date, the Company agrees that Joseph Gunnar shall receive a commission equal to the Placement Agent’s
Fee on any further funds invested by the purchasers in the Offering through further purchases of the Company’s equity securities.
The Company and Joseph Gunnar further agree to negotiate an agreement in good faith over the ten Business Days following the Closing
Date to agree to an arrangement that provides for Joseph Gunnar to have a right of first refusal on any future equity raises pursuant
to the Registration Statement.

  

Section 4.          
Covenants of the Company.

 

The Company further
covenants to and agrees with the Placement Agent as follows:

 

(a)          Registration
Statement Matters. The Company agrees to advise you promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus Supplement or any amended
Prospectus Supplement has been filed and to furnish you with copies thereof; to file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus Supplement and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities; to advise you, promptly after it receives notices thereof (i) of any request
by the Commission to amend the Registration Statement or to amend or supplement the Prospectus Supplement or for additional information
and (ii) of the issuance by the Commission, of any stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or any order directed at any Incorporated Document or any amendment or supplement thereto or any
order preventing or suspending the use of the Base Prospectus or the Prospectus Supplement or any amendment or supplement thereto
or any post-effective amendment to the Registration Statement, of the suspension of the qualification of the Securities for offering
or sale in any jurisdiction, of the institution or threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or Prospectus Supplement or for additional information;
and, in the event of the issuance of any stop order or of any order preventing or suspending the use of the Base Prospectus or
Prospectus Supplement or suspending any such qualification, promptly to use its reasonable best efforts to obtain the withdrawal
of such order.

 

(b)          Blue
Sky Compliance. The Company will cooperate with the Placement Agent and the Investors in endeavoring to qualify the Securities
for sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agent and the Investors may
reasonably request and will make such applications, file such documents, and furnish such information as may be reasonably required
for that purpose, provided the Company shall not be required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction where it is not now so qualified or required to file such a consent, and provided further
that the Company shall not be required to produce any new disclosure document other than the Prospectus Supplement. The Company
will, from time to time, prepare and file such statements, reports and other documents as are or may be required to continue such
qualifications in effect for so long a period as the Placement Agent may reasonably request for distribution of the Securities.

 

    	 	6	 

     

    

 

(c)          Amendments
and Supplements to the Prospectus Supplement and Other Securities Act Matters. The Company will comply with the Act and the
Exchange Act, and the rules and regulations of the Commission thereunder, so as to permit the completion of the distribution of
the Securities as contemplated in this Agreement, the Base Prospectus and any Prospectus Supplement. If during the period in which
a prospectus is required by law to be delivered by a Placement Agent or a dealer in connection with the distribution of Securities
contemplated by the Base Prospectus or any Prospectus Supplement, any event shall occur as a result of which, in the judgment of
the Company or in the reasonable opinion of the Placement Agent or counsel for the Placement Agent, it becomes necessary to amend
or supplement the Base Prospectus or any Prospectus Supplement in order to make the statements therein, in the light of the circumstances
existing at the time the Prospectus Supplement is delivered to a purchaser, not misleading, or, if it is necessary at any time
to amend or supplement the Base Prospectus or any Prospectus Supplement to comply with any law, the Company promptly will prepare
and file with the Commission, and furnish at its own expense to the Placement Agent and to dealers, an appropriate amendment to
the Registration Statement or supplement to the Base Prospectus or any Prospectus Supplement so that the Prospectus Supplement
as so amended or supplemented will not, in the light of the circumstances when it is so delivered, be misleading, or so that the
Base Prospectus or any Prospectus Supplement will comply with such law. Before amending the Registration Statement or supplementing
the Base Prospectus in connection with each Offering, the Company will furnish you with a copy of such proposed amendment or supplement
and will not file such amendment or supplement to which you reasonably object.

 

(d)          Copies
of any Amendments and Supplements to the Prospectus Supplement. The Company agrees to furnish the Placement Agent, without
charge, during the period beginning on the date hereof and ending on the later of the Closing Date of each Offering or such date,
as in the opinion of counsel for the Placement Agent, the Prospectus Supplement are no longer required by law to be delivered in
connection with sales by a Placement Agent or dealer (the “Prospectus Delivery Period”), as many copies of the Base
Prospectus and Prospectus Supplement and any amendments and supplements thereto (including any Incorporated Documents) as the Placement
Agent may reasonably request.

 

(e)          Use
of Proceeds. The Company shall apply the net proceeds from the sale of the Securities sold by it in the manner described under
the caption “Use of Proceeds” in each Prospectus Supplement.

 

(f)          Transfer
Agent. The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Common Stock.

 

(g)          Earnings
Statement. As soon as practicable and in accordance with applicable requirements under the Act, but in any event not later
than 18 months after the Closing Date of each Offering, the Company will make generally available to its security holders and to
the Placement Agent an earnings statement, covering a period of at least 12 consecutive months beginning after the Closing Date,
that satisfies the provisions of Section 11(a) and Rule 158 under the Act.

 

(h)          Periodic
Reporting Obligations. During the Prospectus Delivery Period, the Company shall duly file, on a timely basis, with the Commission
and the NASDAQ all reports and documents required to be filed under the Exchange Act within the time periods and in the manner
required by the Exchange Act.

 

    	 	7	 

     

    

 

(i)          Additional
Documents. The Company will enter into any subscription, purchase or other customary agreements as the Placement Agent or the
Investors deem necessary or appropriate to consummate each Offering, all of which will be in form and substance reasonably acceptable
to the Placement Agent and the Investors. The Company agrees that the Placement Agent may rely upon, and is a third party beneficiary
of, the representation and warranties, and applicable covenants, set forth in any such purchase, subscription or other agreement
with Investors in each Offering, and will be an addressee of any legal opinion issued to Investors in each Offering.

 

Section 5.          Conditions
of the Obligations of the Placement Agent.

 

The obligations of
the Placement Agent hereunder shall be subject to the accuracy of the representations and warranties on the part of the Company
set forth in Section 2 as of the date hereof and as of the Closing Date of each Offering as though then made, to the timely performance
by the Company of its covenants and other obligations hereunder on and as of such dates, and to each of the following additional
conditions:

 

(a)          Compliance
with Registration Requirements; No Stop Order; No Objection from the Financial Industry Regulatory Authority, Inc. (“FINRA”).
Each Prospectus Supplement shall have been duly filed with the Commission in accordance with Rule 424(b); no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; no order preventing or suspending the use of any Prospectus Supplement shall
have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; no order having
the effect of ceasing or suspending the distribution of the Securities or any other securities of the Company shall have been issued
by any securities commission, securities regulatory authority or stock exchange and no proceedings for that purpose shall have
been instituted or shall be pending or, to the knowledge of the Company, contemplated by any securities commission, securities
regulatory authority or stock exchange; all requests for additional information on the part of the Commission shall have been complied
with; and FINRA shall have raised no objection to the fairness and reasonableness of the placement agency terms and arrangements.

 

(b)          Corporate
Proceedings. All corporate proceedings and other legal matters in connection with this Agreement, the Registration Statement
and each Prospectus Supplement, and the registration, authorization, issue, sale and delivery of the Securities, shall have been
reasonably satisfactory to the Placement Agent’s counsel, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon the matters referred to in this Section 5.

 

(c)          No
Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to each Closing Date, there shall
not have occurred any Material Adverse Change or Material Adverse Effect, which, in your sole judgment, makes it impracticable
or inadvisable to proceed with the public offering of the Securities on the terms and in the manner contemplated by the applicable
Prospectus Supplement.

 

(d)          Opinion
of Counsel for the Company. You shall have received on the Closing Date of each Offering, and the Company shall cause to be
delivered to you an opinion of legal counsel to the Company in customary form, dated the Closing Date, addressed to the Placement
Agent.

 

(e)          Officers’
Certificate. You shall have received on each Closing Date a certificate of the Company, dated as of each Closing Date signed
by the Chief Executive Officer and Chief Financial Officer of the Company, to the effect that, and you shall be satisfied that:

 

(i)          The
representations and warranties of the Company in this Agreement are true and correct, as if made on and as of the Closing Date,
and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied
at or prior to each Closing Date;

 

    	 	8	 

     

    

 

(ii)          No
stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus Supplement
has been issued and no proceedings for that purpose have been instituted or are pending or, to the Company’s knowledge, threatened
under the Act; no order having the effect of ceasing or suspending the distribution of the Securities or any other securities of
the Company has been issued by any securities commission, securities regulatory authority or stock exchange in the United States
and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, contemplated by any
securities commission, securities regulatory authority or stock exchange in the United States;

 

(iii)          When
the Registration Statement became effective and at all times subsequent thereto up to the delivery of such certificate, the Registration
Statement, the Base Prospectus and each Prospectus Supplement and any amendments or supplements thereto, and Incorporated Documents,
when such documents became effective or were filed with the Commission, contained all material information required to be included
therein by the Act and the Exchange Act and the applicable rules and regulations of the Commission thereunder, as the case may
be, and in all material respects conformed to the requirements of the Act and the Exchange Act and the applicable rules and regulations
of the Commission thereunder, as the case may be, and the Registration Statement and the Base Prospectus and the Prospectus Supplement,
and any amendments or supplements thereto, did not and do not include any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading (provided, however, that the preceding representations and warranties contained in this paragraph
(iii) shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing
to the Company by the Placement Agent expressly for use therein) and, since the effective date of the Registration Statement, there
has occurred no event required by the Act and the rules and regulations of the Commission thereunder to be set forth in an amended
or supplemented Prospectus Supplement which has not been so set forth;

 

(iv)          Subsequent
to the respective dates as of which information is given in the Registration Statement, the Base Prospectus and each Prospectus
Supplement, there has not been: (a) any Material Adverse Change; (b) any transaction that is material to the Company and the Subsidiaries
taken as a whole, except transactions entered into in the ordinary course of business; (c) any obligation, direct or contingent,
that is material to the Company and the Subsidiaries taken as a whole, incurred by the Company or any Subsidiary, except obligations
incurred in the ordinary course of business; (d) any material change in the capital stock (except changes thereto resulting from
the exercise of outstanding stock options or warrants) or outstanding indebtedness of the Company or any Subsidiary; (e) any dividend
or distribution of any kind declared, paid or made on the capital stock of the Company; or (f) any loss or damage (whether or not
insured) to the property of the Company or any Subsidiary which has been sustained or will have been sustained which has a Material
Adverse Effect; and

 

(v)          The
Company has been subject to continuous disclosure requirements of the Exchange Act for a period of at least 12 calendar months
immediately preceding the filing of the Registration Statement, has timely filed all reports required of it to be filed under the
Exchange Act during the past 12 calendar months and the portion of the month in which the Registration Statement was filed, and
as of the date of the Base Prospectus and each Prospectus Supplement is currently in compliance with such obligations.

 

    	 	9	 

     

    

 

(f)          Stock
Exchange Listing. The Common Stock are registered under the Exchange Act and is or will as of the Closing Date be listed on
the NASDAQ, and the Company has taken no action designed to, or likely to have the effect of terminating the registration of the
Shares under the Exchange Act or delisting or suspending from trading the Shares from NASDAQ, nor has the Company received any
information suggesting that the Commission or NASDAQ is contemplating terminating such registration or listing.

 

(g)          Compliance
with Prospectus Delivery Requirements. The Company shall have complied with the provisions of Sections 3 and 4(c) and (d) with
respect to the furnishing of Prospectus Supplements.

 

(h)          Additional
Documents. On or before each Closing Date, the Placement Agent and counsel for the Placement Agent shall have received such
information and documents as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of
the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.

 

If any condition specified
in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Placement Agent
by notice to the Company at any time on or prior to the Closing Date, which termination shall be without liability on the part
of any party to any other party, except that Section 6 (Payment of Expenses), Section 7 (Reimbursement of Placement Agent’s
Expenses), Section 8 (Indemnification and Contribution) and Section 10 (Representations and Indemnities to Survive Delivery) shall
at all times be effective and shall survive such termination.

 

Section 6.          Payment
of Expenses.

 

The Company agrees
to pay all costs, fees and expenses incurred in connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limitation: (i) all expenses incident to the issuance, delivery and
qualification of the Securities (including all printing and engraving costs); (ii) all fees and expenses of the registrar and transfer
agent of the Common Stock; (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of
the Securities; (iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and
other advisors; (v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution
of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), the
Base Prospectus and each Prospectus Supplement, and all amendments and supplements thereto, and this Agreement; (vi) all filing
fees, reasonable attorneys’ fees and expenses incurred by the Company or the Placement Agent in connection with qualifying
or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Securities for offer
and sale under the state securities or blue sky laws; (vii) the filing fees incident to, and the reasonable fees and expenses of
counsel for the Placement Agent in connection with, the review and approval by the FINRA of the Placement Agent’s participation
in the offering and distribution of the Securities, which shall not exceed, in the aggregate, when combined with any counsel fees
due pursuant to subsection (vi) above, $12,500; (viii) the fees and expenses associated with including the Shares on the NASDAQ;
(ix) all costs and expenses incident to the travel and accommodation of the Company’s employees on the “roadshow,”
if any; and (x) all other fees, costs and expenses referred to in Part II of the Registration Statement.

 

Section 7.          Reimbursement
of Placement Agent’s Expenses.

 

Whether or not this
Agreement is terminated, and whether or not the sale to the Investors of the Securities on any Closing Date is consummated, the
Company agrees to reimburse the Placement Agent, upon demand, for all reasonable and documented out-of-pocket expenses that shall
have been reasonably incurred by the Placement Agent in connection with the proposed purchase and the offering and sale of the
Securities, including but not limited to printing expenses, travel and accommodation expenses, postage, facsimile and telephone
charges.

 

    	 	10	 

     

    

 

Section 8.          Indemnification
and Contribution.

 

(a)          Indemnification
of the Placement Agent. The Company agrees to indemnify and hold harmless the Placement Agent, its officers and employees,
and each person, if any, who controls the Placement Agent within the meaning of the Act and the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which such Placement Agent or such controlling person may become subject,
under the Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the written consent of the Company, which consent shall not
be unreasonably withheld), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based: (i) upon any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, or the omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading; or (ii) upon any untrue statement or alleged untrue statement of a material fact contained in the Base Prospectus or
the Prospectus Supplement (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
or (iii) in whole or in part upon any inaccuracy in the representations and warranties of the Company contained herein; or (iv)
in whole or in part upon any failure of the Company to perform its obligations hereunder or under law; or (v) any act or failure
to act or any alleged act or failure to act by any Placement Agent in connection with, or relating in any manner to, the Securities
or the offering contemplated hereby, and which is included as part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon any matter covered by clause (i), (ii), (iii) or (iv) above, provided that the Company shall not be
liable under this clause (v) to the extent that a court of competent jurisdiction shall have determined by a final judgment that
such loss, claim, damage, liability or action resulted directly from any such acts or failures to act undertaken or omitted to
be taken by any Placement Agent through its bad faith or willful misconduct; and to reimburse such Placement Agent and each such
controlling person for any and all expenses (including the reasonable fees and disbursements of counsel chosen by Joseph Gunnar)
as such expenses are reasonably incurred by such Placement Agent or such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising
out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and
in conformity with written information furnished to the Company by any Placement Agent expressly for use in the Registration Statement,
the Base Prospectus or the Prospectus Supplement (or any amendment or supplement thereto).

 

(b)          Indemnification
of the Company, its Directors and Officers. The Placement Agent agrees to indemnify and hold harmless the Company, each of
its directors, each of its officers who signed the Registration Statement and each person, if any, who controls the Company within
the meaning of the Act or the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which the Company,
or any such director, officer or controlling person may become subject, under the Act, the Exchange Act, or other federal, state
statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected
with the written consent of such Placement Agent), insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon any untrue or alleged untrue statement of a material fact contained
in any Prospectus Supplement (or any amendment or supplement thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged
omission was made in such Prospectus Supplement (or any amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by such Placement Agent expressly for use therein and to reimburse the Company, or
any such director, officer or controlling person for any legal and other expense reasonably incurred by the Company, or any such
director, officer or controlling person in connection with investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action. The indemnity agreement set forth in this Section 8(b) shall be in addition
to any liabilities that the Placement Agent may otherwise have.

 

    	 	11	 

     

    

 

(c)          Information
Provided by the Placement Agent. The Company and each person, if any, who controls the Company within the meaning of the Act
or the Exchange Act, hereby acknowledges that the only information that the Placement Agent will furnish to the Company expressly
for use in any Prospectus Supplement (or any amendment or supplement thereto) are the statements regarding the Placement Agent
set forth under the caption “Plan of Distribution” in the Prospectus Supplement.

 

(d)          Notifications
and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying
party will not relieve it from any liability, which it may have to any indemnified party for contribution to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in,
and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict
may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action
or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties.
Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to
assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless: (i) the indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses
of more than one separate counsel (together with local counsel), approved by the indemnifying party), representing the indemnified
parties who are parties to such action); (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice of commencement of the action; or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party, in each of which
cases the fees and expenses of counsel shall be at the expense of the indemnifying party.

 

(e)          Settlements.
The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense
by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party,
effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in
respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent includes: (i) an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such action, suit or proceeding; and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

    	 	12	 

     

    

 

(f)          Contribution.
If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof)
then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party in such proportion
as is appropriate to reflect the relative benefits received by such party on the one hand and the Placement Agent on the other
from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted
by applicable law then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also the relative fault of such indemnifying party
on the one hand and the Placement Agent on the other in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof), as well as any other relevant equitable considerations.
The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the
“control” stockholders on the one hand or the Placement Agent on the other and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

The Company and Placement
Agent agree that it would not be just and equitable if contributions pursuant to this Section 8(f) were determined by pro rata
allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in
this Section 8(f). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) referred to above in this Section 8(f) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (f): (i) no Placement Agent shall be required to contribute any amount in excess
of the amount of the placement agent fees actually received by such Placement Agent pursuant to this Agreement; and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Placement Agent’s obligations under this Section
8(f) to contribute are several in proportion to their respective placement obligations and not joint.

 

(g)          Timing
of Any Payments of Indemnification. Any losses, claims, damages, liabilities or expenses for which an indemnified party is
entitled to indemnification or contribution under this Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred, but in all cases, no later than forty-five (45) days of
invoice to the indemnifying party.

 

(h)          Survival.
The indemnity and contribution agreements contained in this Section 8 and the representations and warranties set forth in this
Agreement shall remain operative and in full force and effect, regardless of: (i) any investigation made by or on behalf of any
Placement Agent or any person controlling such Placement Agent, the Company, its directors or officers or any persons controlling
the Company; (ii) acceptance of any Securities and payment therefor hereunder; and (iii) any termination of this Agreement. A successor
to any Placement Agent, or to the Company, its directors or officers or any person controlling the Company, shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements contained in this Section 8.

 

    	 	13	 

     

    

 

(i)          Acknowledgements
of Parties. The parties to this Agreement hereby acknowledge that they are sophisticated business persons who were represented
by counsel during the negotiations regarding the provisions hereof including, without limitation, the provisions of this Section
8, and are fully informed regarding said provisions. They further acknowledge that the provisions of this Section 8 fairly allocate
the risks in light of the ability of the parties to investigate the Company and its business in order to assure that adequate disclosure
is made in the Registration Statement and the Prospectus Supplement as required by the Act and the Exchange Act.

 

Section 9.          [RESERVED].

 

Section 10.          Representations
and Indemnities to Survive Delivery.

 

The respective indemnities,
agreements, representations, warranties and other statements of the Company or any person controlling the company, of its officers,
and of the Placement Agent set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Placement Agent or the Company or any of its or their partners, officers or directors
or any controlling person, as the case may be, and will survive delivery of and payment for the Securities sold hereunder and any
termination of this Agreement.

 

Section 11.          Notices.

 

All communications
hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed to the parties hereto as follows:

 

If to the Placement Agent:

 

Joseph Gunnar & Co., LLC

30 Broad Street, 11th Fl

New York, NY 10004

Facsimile: (646) 461-2729

E-mail: elord@jgunnar.com

Attention: Eric Lord

 

With a copy to

 

Pryor Cashman LLP

7 Times Square

New York, NY 10036

Facsimile: (212) 798-6319

Attention: M. Ali Panjwani, Esq.

 

If to the Company:

 

Staffing 360 Solution, Inc.

641 Lexington Avenue, Suite 1526

New York, NY 10022

Facsimile: (212) 634-6462

Attention: Brendan Flood

 

With a copy to:

 

Jenner & Block LLP

919 Third Avenue

New York, NY 10022

Facsimile: (212) 909-0882

Attention: Martin C. Glass, Esq.

 

Any party hereto may
change the address for receipt of communications by giving written notice to the others.

 

    	 	14	 

     

    

 

Section 12.          Successors.

 

This Agreement will
inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 8, and to their respective successors, and personal representatives, and no other person
will have any right or obligation hereunder.

 

Section 13.          Partial
Unenforceability.

 

The invalidity or unenforceability
of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid
or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it
valid and enforceable.

 

Section 14.          Governing
Law Provisions.

 

(a)          Governing
Law. This agreement shall be governed by and construed in accordance with the internal laws of the state of New York applicable
to agreements made and to be performed in such state.

 

(b)          Consent
to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated
hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in New
York, New York, or the courts of the State of New York in each case located in the Borough of Manhattan (collectively, the “Specified
Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to
the enforcement of a judgment of any such court (a “Related Judgment”), as to which such jurisdiction is non-exclusive)
of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s
address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court.
The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding
in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such
suit, action or other proceeding brought in any such court has been brought in an inconvenient forum.

 

Section 15.          General
Provisions.

 

This Agreement constitutes
the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts,
each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. Section headings herein
are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.

 

[The remainder of this page has been intentionally
left blank.]

[Signature Page Follows]

 

    	 	15	 

     

    

 

If the foregoing is
in accordance with your understanding of our agreement, please sign and return to the Company the enclosed copies hereof, whereupon
this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.

 

Very truly yours,

 

STAFFING
360 SOLUTIONS, INC. 

 

 

By: /s/ Brendan Flood                                     

      Name: Brendan Flood

      Title:    Executive Chairman

 

The foregoing Placement
Agency Agreement is hereby confirmed and accepted by the Placement Agent as of the date first above written.

 

JOSEPH GUNNAR & CO., LLC

 

By: /s/ Eric Lord                                                  

Name: Eric Lord

Title: Head of Investment Banking /

                  Underwritings

 

 

    	 	16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00256-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00256-of-00352.parquet"}]]