Document:

SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”) is dated as of _________, between Advanced Medical Isotope
Corporation, a Delaware corporation (the “Company”), and the purchaser identified on the signature pages hereto
(including its successors and assigns, the “Purchaser”). Notwithstanding anything herein to the contrary, with
respect to any rights or obligations of the Purchaser which are similar or conflict with other purchasers signing similar securities
purchase agreements, such rights and obligations shall be allocated pro rata based on each such purchasers (including the Purchaser)
aggregate subscription amount.

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell
to the Purchaser, and the Purchaser 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 the Purchaser agree as follows:

 

ARTICLE
I.

DEFINITIONS

 

1.1
Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the Debentures (as defined herein), and (b) 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 4.7.

 

“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.

 

“Agent”
shall have the meaning ascribed to such term in the Security Agreement.

 

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

 

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

 

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

 

    	 	 	 

    	 

    

 

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

 

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

 

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

 

“Common
Stock Equivalents” means any securities of the Company (or any direct or indirect subsidiaries the Company may obtain
or form in the future) 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 Disclosure Law Group, a Professional Corporation, with offices located at 600 West Broadway, Suite 700,
San Diego, California 92101.

 

“Conversion
Price” shall have the meaning ascribed to such term in the Debentures.

 

“Conversion
Shares” shall have the meaning ascribed to such term in the Debentures.

 

“Debentures”
means the 7.5% Original Issue Discount Senior Secured Convertible Debenture due, subject to the terms therein, twelve (12) months
from its date of issuance, issued by the Company to the Purchaser hereunder, in the form attached as an exhibit hereto.

 

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

 

“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.

 

“Effective
Date” means the earliest of the date that (a) the initial Registration Statement has been declared effective by the
Commission or (b) all of the Underlying Shares may be sold pursuant to Rule 144 without volume or manner-of-sale restrictions
and Company Counsel has delivered to the Transfer Agent a standing written unqualified opinion that resales may then be made by
such holders of the Underlying Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable
to such holders.

 

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“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, Restricted Stock Units (RSUs) or options to eligible grantees
under 2015 Omnibus Incentive and Securities Plan, provided that issuances under this clause (a) shall not exceed an aggregate
of twenty percent (20%) of the total outstanding shares of Common Stock on an as converted primary basis as of the date hereof
in any 12 month period, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or
other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date
of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities, (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, and (d) shares of Common
Stock issued in lieu of cash payment for services provided by service providers.

 

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

 

“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(bb).

 

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

 

“Irrevocable
Transfer Agent Instructions” shall have the meaning ascribed to such term in Section 4.1(c).

 

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

 

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“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).

 

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

 

“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.12(a).

 

“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.

 

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

 

“Preferred
Stock” shall mean the Series A Convertible Preferred Stock issuable pursuant to that certain Certificate of Designation.

 

“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.12(b).

 

“Principal
Amount” means the principal amount of the Debenture which shall be the Subscription Amount plus an original issue discount
of 25% of the Subscription Amount, or a total of $810,962.

 

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

 

“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.

 

“Registration
Statement” means a registration statement, if any, covering the resale of the Underlying Shares by the Purchaser.

 

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

 

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“Required
Minimum” means, the product of 400% of (i) the maximum aggregate number of shares of Common Stock then issued or potentially
issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of
all shares of Preferred Stock or conversion in full of all Debentures (including Underlying Shares issuable as payment of interest
on the Debentures), ignoring any conversion or exercise limits set forth therein.

 

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

 

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

 

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

 

“Securities”
means the Debentures, the shares of Preferred Stock and the Underlying Shares.

 

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

 

“Security
Agreement” means the Security Agreement, dated the date hereof, among the Company and the Purchaser, in the form attached
as an exhibit hereto.

 

“Security
Documents” shall mean the Security Agreement, and any other documents and filing required thereunder in order to grant
the Purchaser a first priority security interest in the assets of the Company as provided in the Security Agreement, including
all UCC-1 filing receipts.

 

“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 the aggregate amount paid for Debentures and shares of Preferred Stock purchased hereunder.

 

“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.12(a).

 

“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.12(b).

 

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

 

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“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, the Debentures, the Security Agreement, all exhibits and schedules thereto and hereto
and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer
Agent” means American Registrar & Transfer Co., 1234 W South Jordan Pkwy Ste B3, South Jordan, UT 84095, and any
successor transfer agent of the Company.

 

“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Debenture and Preferred
Stock, including without limitation, shares of Common Stock issued and issuable in lieu of the cash payment of interest on the
Debentures in accordance with the terms of the Debentures, in each case without respect to any limitation or restriction on the
conversion of the Debentures or the shares of Preferred Stock.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(a).

 

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

 

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ARTICLE
II.

PURCHASE
AND SALE

 

2.1
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchaser agrees to purchase
$810,962 Principal Amount of the Debentures. The Purchaser shall deliver to the Company, via wire transfer or a certified check,
immediately available funds, and the Company shall deliver to the Purchaser the Debenture and shares of Preferred Stock, as determined
pursuant to Section 2.2(a), and the Company and the 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 EGS or such other location as the parties shall mutually agree.

 

2.2
Deliveries.

 

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

 

(i)
this Agreement duly executed by the Company;

 

(ii)
a legal opinion of Company Counsel, substantially in the form attached as an exhibit hereto;

 

(iii)
a Debenture in the Principal Amount, registered in the name of the Purchaser;

 

(iv)
____________ shares of Preferred Stock convertible into _____________ shares of Common Stock; and

 

(v)
the Security Agreement, duly executed by the Company, along with all of the Security Documents.

 

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

 

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

 

(ii)
the Security Agreement duly executed by the Purchaser.

 

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 on the Closing Date of the representations and warranties of the Purchaser 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 Purchaser required to be performed at or prior to the Closing Date shall have
been performed; and

 

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

 

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

 

(i)
the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein);

 

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

 

(iii)
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

 

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

 

(v)
the Company shall have delivered a Certificate, executed on behalf of the Company by its Secretary, dated as of the Closing Date,
certifying the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by this Agreement
and the other Transaction Documents and the issuance of the Securities, certifying the current versions of the Certificate of
Incorporation and Bylaws of the Company and certifying as to the signatures and authority of persons signing the Transaction Documents
and related documents on behalf of the Company;

 

(vi)
the Company shall have delivered a Certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief
Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in this Section 2.3(b);
and

 

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

 

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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 the Purchaser:

 

(a)
Subsidiaries. The Company does not have any direct or indirect subsidiaries.

 

(b)
Organization and Qualification. The Company 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. The Company is not in violation
or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational
or charter documents. The Company 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,
or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations
under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has
been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and
authority or qualification.

 

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

 

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(d)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents
to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not: (i) conflict with or violate any provision of the Company’s certificate of incorporation,
bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets
of the Company, or 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 debt or otherwise) or
other understanding to which the Company is a party or by which any property or asset of the Company 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 is subject (including federal
and state securities laws and regulations), or by which any property or asset of the Company 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 4.6 of this Agreement, (ii) to the extent required, the notice and/or application(s)
to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Underlying Shares for trading
thereon in the time and manner required thereby and (iii) the filing of Form D with the Commission and such filings as are required
to be made under applicable state securities laws (collectively, the “Required Approvals”).

 

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

 

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

 

(h)
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation
to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as
applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The
financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company 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.

 

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

 

(j)
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge
of the Company, threatened against or affecting the Company or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any 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 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 employees
is a member of a union that relates to such employee’s relationship with the Company, and the Company is not a party to
a collective bargaining agreement, and the Company believes its relationships with its employees are good. To the knowledge of
the Company, no executive officer of the Company 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 to any liability with respect to any of the foregoing matters. The Company is in compliance with
all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions
of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

 

(l)
Compliance. The Company is not: (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 under), nor has the Company 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 (i) is 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) has received all permits licenses or other approvals required of them under applicable Environmental Laws tic induct their
respective businesses; and (iii) is 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 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 the Company has not received any notice of proceedings relating to the revocation or modification of
any Material Permit.

 

(o)
Title to Assets. The Company has 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, 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 (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 is held by them under valid,
subsisting and enforceable leases with which the Company is in compliance.

 

(p)
Intellectual Property. The Company has, or has rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar
rights as described in the SEC Reports as necessary or required for use in connection with their respective businesses and which
the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
The Company has not 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.
The Company has not 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 has 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.

 

    	 	14	 

    	 

    

 

(q)
Insurance. The Company is 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 is engaged, including but not limited to,
directors and officers insurance. The Company has no reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.

 

(r)
Transactions With Affiliates and Employees. None of the officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to any transaction with the Company (other than for services
as employees, officers and directors), 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 is 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 maintains a system
of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset 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 has established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures
of the Company as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date,
the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) that have materially affected, or is reasonably likely to materially affect,
the internal control over financial reporting of the Company.

 

    	 	15	 

    	 

    

 

(t)
Certain Fees. Except as set forth on Schedule 3.1(t), no brokerage or finder’s fees or commissions are or
will be payable by the Company 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 Purchaser 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)
Private Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2,
no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchaser
as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the
Trading Market.

 

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

 

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

 

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

 

    	 	16	 

    	 

    

 

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

 

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

 

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

 

    	 	17	 

    	 

    

 

(bb)
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the
receipt by the Company of the entire Subscription Amount: (i) the fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to
carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(bb)
sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company, or for which the Company 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. The Company
is not in default with respect to any Indebtedness.

 

(cc)
Tax Status. Except as set forth on Schedule 3.1(cc) and for matters that would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect, the Company (i) has made or filed all United States federal,
state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown
or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate
for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.
Except as set forth on Schedule 3.1(cc), there are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

 

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

 

(ee)
Foreign Corrupt Practices. The Company, and to the knowledge of the Company, any agent or other person acting on behalf
of the Company, has not: (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 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.

 

    	 	18	 

    	 

    

 

(ff)
Accountants. The Company’s accounting firm is set forth on Schedule 3.1(ff) of the Disclosure Schedules. To
the knowledge and belief of the Company, such accounting firm: (i) is a registered public accounting firm as required by the Exchange
Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report
for the fiscal year ending December 31, 2017.

 

(gg)
Seniority. As of the Closing Date, no Indebtedness or other claim against the Company is senior to the Debentures in right
of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured
by purchase money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations
(which is senior only as to the property covered thereby).

 

(hh)
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the Transaction Documents.

 

(ii)
Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Purchaser
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 the 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 Purchaser’s purchase of the Securities. The Company
further represents to the 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.

 

    	 	19	 

    	 

    

 

(jj)
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement
or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.15 hereof), it is understood and acknowledged
by the Company that: (i) the Purchaser has not been asked by the Company to agree, nor has the Purchaser agreed, to desist from
purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or other transactions
by the Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or
after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities, (iii) the Purchaser, and counter-parties in “derivative” transactions to which the Purchaser
is a party, directly or indirectly, may presently have a “short” position in the Common Stock and (iv) the 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) the Purchaser may engage in hedging activities at
various times during the period that the Securities are outstanding, including, without limitation, during the periods that the
value of the Underlying Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if
any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the
hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute
a breach of any of the Transaction Documents.

 

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

 

(ll)
FDA. As to each 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 (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company’s
knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge,
complaint, or investigation) against the Company, and the Company has not received any notice, warning letter or other communication
from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval
of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion
of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or
orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical
hold on any clinical investigation by the Company, (iv) enjoins production at any facility of the Company, (v) enters or proposes
to enter into a consent decree of permanent injunction with the Company, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company, and which, either individually or in the aggregate, would have a Material Adverse Effect.
The properties, business and operations of the Company have been and are being conducted in all material respects in accordance
with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit
the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the
Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed
to be developed by the Company.

 

    	 	20	 

    	 

    

 

(mm)
Intentionally Omitted.

 

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

 

(oo)
Office of Foreign Assets Control. The Company, and to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company is not currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“OFAC”).

 

(pp)
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.

 

(qq)
Bank Holding Company Act. Neither the Company nor any of its 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 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 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.

 

    	 	21	 

    	 

    

 

(rr)
Money Laundering. The operations of the Company 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 with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

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

 

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

 

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

 

3.2
Representations and Warranties of the Purchasers. The Purchaser hereby represents and warrants as of the date hereof and
as of the Closing Date to the Company as follows (unless as of a specific date therein):

 

(a)
Organization; Authority. The 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 the 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 the Purchaser.
Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser
in accordance with the terms hereof, will constitute the valid and legally binding obligation of the 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.

 

    	 	22	 

    	 

    

 

(b)
Own Account. The Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account
and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act
or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons
to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting the Purchaser’s right to sell the Securities pursuant to a Registration
Statement or otherwise in compliance with applicable federal and state securities laws). The Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.

 

(c)
Purchaser Status. At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.

 

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

 

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

 

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(f)
Access to Information. The Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it
has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company
and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to
evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.

 

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

 

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

 

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ARTICLE
IV.

OTHER
AGREEMENTS OF THE PARTIES

 

4.1
Transfer Restrictions.

 

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

 

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

 

[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS
SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

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

 

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(c)
Certificates evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof):
(i) while a registration statement covering the resale of such security is effective under the Securities Act, (ii) following
any sale of such Underlying Shares pursuant to Rule 144, (iii) if such Underlying Shares are eligible for sale under Rule 144
or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission). After the Effective Date, the Company shall issue irrevocable instructions
to the Transfer Agent and any subsequent transfer agent in a form acceptable to the Purchaser along with an opinion of counsel
on behalf of the Company and acceptable to the Transfer Agent (the “Irrevocable Transfer Agent Instructions”)
to issue certificates or credit shares to the applicable balance accounts at DTC, registered in the name of the Purchaser or its
respective nominee(s), for the Underlying Shares in such amounts as specified from time to time by the Purchaser to the Company
upon conversion of the Debentures or Preferred Stock (as the case may be). The Company represents, warrants and covenants that
no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 4.1(c), and stop transfer instructions
to give effect to Section 4.1 hereof, will be given by the Company to its Transfer Agent with respect to the Underlying Shares,
and that the Underlying Shares shall otherwise be freely transferable on the books and records of the Company, as applicable,
to the extent provided in this Agreement and the other Transaction Documents. If, after the Effective Date, the Purchaser effects
a sale, assignment or transfer of the Securities, the Company shall permit the transfer and shall promptly instruct its Transfer
Agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations
as specified by the Purchaser to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer
after the Effective Date involves the Underlying Shares, the Transfer Agent shall issue such shares to such purchaser, assignee
or transferee (as the case may be) without any restrictive legend in accordance with this Section 4.1(c). The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to the Purchaser. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 4.1 will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Section 4.1, that the Purchaser shall be entitled, in addition
to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other security being required. The Company shall cause
its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Transfer Agent on each
effective date of a Registration Statement. Any fees (with respect to the Transfer Agent, counsel to the Company or otherwise)
associated with the issuance of such opinion or the removal of any legends on any of the Securities shall be borne by the Company.
The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c),
it will, no later than the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement
Period (as defined below) following the delivery by the Purchaser to the Company or the Transfer Agent of a certificate representing
Underlying Shares, as applicable, issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”),
deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and
other legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the
restrictions on transfer set forth in this Section 4. Certificates for Underlying Shares subject to legend removal hereunder shall
be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the
Depository Trust Company System as directed by the Purchaser. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with
respect to the Common Stock as in effect on the date of delivery of a certificate representing Underlying Shares, as applicable,
issued with a restrictive legend.

 

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

 

(e)
The Purchaser agrees with the Company that the Purchaser will sell any Securities pursuant to either the registration requirements
of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities
are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein,
and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth in this Section
4.1 is predicated upon the Company’s reliance upon this understanding.

 

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

 

    	 	27	 

    	 

    

 

4.3
Furnishing of Information; Public Information.

 

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

 

(b)
At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all
of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future,
and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”)
then, in addition to the Purchaser’s other available remedies, the Company shall pay to the Purchaser, in cash, as partial
liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an
amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of the Purchaser’s Securities on the day
of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty
days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public
information is no longer required for the Purchaser to transfer the Underlying Shares pursuant to Rule 144. The payments to which
the Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public Information Failure
Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month
during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the
event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public
Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.7.5%
per month (prorated for partial months) until paid in full. Nothing herein shall limit the Purchaser’s right to pursue actual
damages for the Public Information Failure, and the Purchaser shall have the right to pursue all remedies available to it at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

4.4
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in
a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated
with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require
shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing
of such subsequent transaction.

 

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4.5
Conversion and Exercise Procedures. The form of Notice of Conversion included in the Debenture and Preferred Stock set
forth the totality of the procedures required of the Purchaser in order to convert the Debentures or Preferred Stock. Without
limiting the preceding sentences, no ink-original Notice of Exercise or 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 Debenture or Preferred Stock. No additional legal opinion, other information or instructions shall be required of the Purchaser
to convert its Debenture or Preferred Stock. The Company shall honor conversions of the Debenture and Preferred Stock and shall
deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

 

4.6
Securities Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m. (New York City time) on the Trading Day immediately
following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b)
file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time
required by the Exchange Act. From and after the filing of such press release, the Company represents to the Purchaser that it
shall have publicly disclosed all material, non-public information delivered to the Purchaser by the Company, or any of their
respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents.
In addition, effective upon the filing of such press release, the Company acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the Company or any of its respective officers, directors,
agents, employees or Affiliates on the one hand, and the Purchaser or any of its Affiliates on the other hand, shall terminate.
The Company and Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated
hereby, and neither the Company nor the Purchaser shall issue any such press release nor otherwise make any such public statement
without the prior consent of the Company, with respect to any press release of the Purchaser, or without the prior consent of
the Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed,
except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior
notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name
of the Purchaser, or include the name of the Purchaser in any filing with the Commission or any regulatory agency or Trading Market,
without the prior written consent of the Purchaser, except: (a) as required by federal securities law in connection with 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).

 

4.7
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other
Person, that the 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 the Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchaser.

 

    	 	29	 

    	 

    

 

4.8
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 4.6, the Company covenants and agrees that neither it, nor
any other Person acting on its behalf will provide the Purchaser or its agents or counsel with any information that constitutes,
or the Company reasonably believes constitutes, material non-public information, unless prior thereto the 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 the 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 the Purchaser without the Purchaser’s consent,
the Company hereby covenants and agrees that the Purchaser shall not have any duty of confidentiality to the Company, any of its
future subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company,
and of its future 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 of its future 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 the Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.

 

4.9
Use of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from
the sale of the Securities hereunder for working capital purposes within the United States of America and shall not use such proceeds:
(a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course
of the Company’s business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents,
(c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.

 

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4.10
Indemnification of Purchaser. Subject to the provisions of this Section 4.10, the Company will indemnify and hold the 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
the 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 the 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 any Purchaser Party in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company
who is not an Affiliate of the Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of the Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings the 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 the 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, the 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 the 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 the 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 the 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 the Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification
required by this Section 4.10 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to
any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may
be subject to pursuant to law.

 

4.11
Reservation and Listing of Securities.

 

(a)
The Company shall maintain a reserve of the Required Minimum 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
or articles 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.

 

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(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.

 

4.12
Participation in Future Financing.

 

(a)
From the date hereof until the date that is the nine (9) month anniversary of the Closing Date, upon any issuance by the Company
(or any direct or indirect subsidiaries the Company may obtain or form in the future) of Common Stock or Common Stock Equivalents
or Indebtedness (or a combination of units thereof), (a “Subsequent Financing”), the Purchaser shall have the
right to participate in up to an amount of the Subsequent Financing equal to 100% of the Subsequent Financing (the “Participation
Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing.

 

(b)
At least five (5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to the Purchaser a
written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask
the Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of the Purchaser, and only upon a request by the 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 the 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 Purchaser has received the Pre-Notice
that the Purchaser is willing to participate in the Subsequent Financing, the amount of the Purchaser’s participation, and
representing and warranting that the 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 the Purchaser as of such fifth (5th)
Trading Day, the Purchaser shall be deemed to have notified the Company that it does not elect to participate.

 

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

 

(e)
The Company must provide the Purchaser with a second Subsequent Financing Notice, and the Purchaser will again have the right
of participation set forth above in this Section 4.12, 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.

 

(f)
The Company and the Purchaser agree that if the Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision whereby the Purchaser shall be required to agree to
any restrictions on trading as to any of the Securities 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
the Purchaser.

 

(g)
Notwithstanding anything to the contrary in this Section 4.12 and unless otherwise agreed to
by the Purchaser, the Company shall either confirm in writing to the 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 the 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 the Purchaser, such transaction shall be deemed to have been abandoned and the Purchaser
shall not be deemed to be in possession of any material, non-public information with respect to the Company (or any direct
or indirect subsidiaries the Company may obtain or form in the future). 

 

(h)
Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance.

 

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4.13
Subsequent Equity Sales.

 

(a)
From the date hereof until 9 months following the Closing Date, the Company shall be prohibited from effecting or entering into
an agreement to effect any issuance by the Company (or any direct or indirect subsidiaries the Company may obtain or form in the
future) 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, or effects a transaction under, 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.

 

(b)
Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance, except that no Variable Rate
Transaction shall be an Exempt Issuance.

 

4.14
Most Favored Nation Provision. From the date hereof until the date when the Purchaser no longer holds Debentures originally
purchased by the Purchaser hereunder, if the Company effects a Subsequent Financing, each Purchaser may elect, in its sole discretion,
to exchange all or some of the Debentures then held by the Purchaser for any securities or units issued in a Subsequent Financing
on a $1.00 for $1.00 basis based on the outstanding principal amount of such Debentures, along with any accrued but unpaid interest
(including guaranteed interest in the first year), liquidated damages and other amounts owing thereon, and the effective price
at which such securities were sold in such Subsequent Financing; provided, however, that this Section 4.14 shall
not apply with respect to an Exempt Issuance. The Company shall provide each Purchaser with notice of any such Subsequent Financing
in the manner set forth in Section 4.12. In the event the Company undertakes a Subsequent Financing that is a bona-fide public
offering resulting in gross proceeds of at least $5 million, at the option of the Company prior to the public announcement of
such financing, the Purchaser shall be required to exchange $137,500 of the Purchaser’s Principal Amount of Debenture then
outstanding pursuant to the terms hereunder.

 

4.15
Certain Transactions and Confidentiality. The Purchaser 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 4.6. The Purchaser
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 4.6, the Purchaser will maintain the confidentiality of the existence and
terms of this transaction and the information included in the Transaction Documents and the Disclosure Schedules. Notwithstanding
the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) the Purchaser does not make 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 4.6, (ii) the Purchaser shall not 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 4.6. Notwithstanding the foregoing, in the case of the Purchaser that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have
no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s
assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that
made the investment decision to purchase the Securities covered by this Agreement.

 

    	 	34	 

    	 

    

 

4.16
Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of the Purchaser. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers
at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide
evidence of such actions promptly upon request of the Purchaser.

 

4.17
Capital Changes. Until the date that the Debentures are no longer outstanding, other than in connection with a listing
of the Common Stock on a national securities exchange, the Company shall not undertake a reverse or forward stock split or reclassification
of the Common Stock without the prior written consent of the Purchaser or as otherwise provided in the Transaction Documents.

 

ARTICLE
V.

MISCELLANEOUS

 

5.1
Termination. This Agreement may be terminated by the Purchaser by written notice to the other parties, if the Closing has
not been consummated on or before May __ 2017; provided, however, that such termination will not affect the right
of any party to sue for any breach by any other party (or parties).

 

5.2
Fees and Expenses. The Company shall be responsible for all reasonable fees and expenses of the Purchaser, including, but
not limited to, legal and due diligence fees and expenses. Except as expressly set forth in the Transaction Documents to the contrary,
each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company
shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction
letter delivered by the Company and any conversion or exercise notice delivered by the Purchaser), stamp taxes and other taxes
and duties levied in connection with the delivery of any Securities to the Purchaser.

 

    	 	35	 

    	 

    

 

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

 

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

 

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

 

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 the Purchaser (other than by merger). The Purchaser may assign any or all of its rights under this Agreement to any
Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchaser.”

 

    	 	36	 

    	 

    

 

5.8
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as
otherwise set forth in Section 4.10.

 

5.9
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard
to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action
or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party hereto shall
commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Section 4.10, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing
party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such Action or Proceeding.

 

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

 

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

 

    	 	37	 

    	 

    

 

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 the 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
the Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however,
that in the case of a rescission of a conversion of a Debenture or Preferred Stock, the Purchaser shall be required to return
any shares of Common Stock subject to any such rescinded conversion or exercise notice concurrently with the return to the Purchaser
of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire
such shares pursuant to such Purchaser’s Preferred Stock (including, issuance of a replacement certificate evidencing such
restored right).

 

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

 

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

 

5.16
Payment Set Aside. To the extent that the Company makes a payment or payments to the Purchaser pursuant to any Transaction
Document or the 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.

 

    	 	38	 

    	 

    

 

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

 

5.18
Intentionally Omitted.

 

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

 

5.20
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next
succeeding Business Day.

 

5.21
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity
to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be
subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.

 

5.22
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER
PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 

 

(Signature
Pages Follow)

 

    	 	40	 

    	 

    

 

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.

 

	advanced
    medical isotope corporation	 	Address
    for Notice:
	 	 	 	 
	By:	 	 	719
    Jadwin Avenue, Richland, WA
	Name:	Michael
    Korenko	 	99352
	Title:	CEO	 	MKorenko@IsotopeWorld.com
		 	Bjolliff@IsotopeWorld.com
	With
    a copy to (which shall not constitute notice):	 	509-736-4000
    office

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

    	 	41	 

    	 

    

 

[PURCHASER
SIGNATURE PAGES TO ADMD 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:	 	 

 

	Signatures of Authorized Signatory of Purchaser:  	 	 
	 	 	 
	 	 	 

 

	Names of Authorized Signatory:  	 	 

 

	Titles of Authorized Signatory:	 	 

 

	Email Addresses of Authorized Signatory:	 	 

 

	Facsimile Number of Authorized Signatory:	 	 

 

	Address for Notice to Purchaser:	 	 

 

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

 

	Subscription Amount:	 	 

 

	Shares of Preferred Stock:	 	 

 

	EIN Number:	 	 

 

[SIGNATURE
PAGES CONTINUE]

 

    	 	42English
Convenience Translation

– Original Agreement has been executed in German language –

  

	 Dated
19 April 2017

          

        Rheinton
        GmbH

         

        as
        Shareholder

          

        and

          

        IntriCon
        Inc.

         

        as
        Investor

          

        and

         

        Soundperience
        GmbH

         

        as
        Company

         

        

 

        

        Investment Agreement

        (Beteiligungsvertrag)

         

        Pertaining
        to Soundperience GmbH

         

 

         

    	 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German language –

   

Table
of Contents

 

	Clause	Headings	 	Page
	 	 	 	 
	1.	DEFINITIONS	 	4
	2.	INTERPRETATION	 	5
	3.	SUBJECT MATTER OF THIS AGREEMENT	 	6
	4.	INVESTMENT IN SOUNDPERIENCE AND DEVELOPMENT OF SOFTWARE	 	6
	5.	STEP 1 CAPITAL INCREASE	 	7
	6.	STEP 2 CAPITAL INCREASE	 	7
	7.	[INTENTIONALLY OMITTED]	 	8
	8.	AMENDMENT OF ARTICLES OF ASSOCIATION	 	8
	9.	REPRESENTATIONS AND WARRANTIES	 	8
	10.	REMEDIES	 	10
	11.	MANAGEMENT	 	11
	12.	RESTRICTIONS ON TRANSFER	 	12
	13.	OTHER BUSINESS ACTIVITIES	 	13
	14.	COSTS AND EXPENSES	 	14
	15.	NOTICES AND COMMUNICATION	 	14
	16.	MISCELLANEOUS	 	16

 

    	2 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German language –

 

Investment
Agreement

(the “Agreement”) 

 

 

		(1)	Rheinton
                                         GmbH, having its registered seat in Rüdesheim am Rhein, registered in the commercial
                                         register of the local court of Wiesbaden under no. HRB 20157, with registered business
                                         address at Ingelheimer Strasse 11, 65385 Rüdesheim am Rhein, Germany, (the “Shareholder”
                                         or “Rheinton”);

 

		(2)	IntriCon
                                         Inc., a corporation formed under the laws of Minnesota, USA, registered in the state
                                         of Minnesota with the Secretary of State, with [registered] business address at 1260
                                         Red Fox Road, Arden Hills, MN 55112, USA (the “Investor” or “IntriCon”);
                                         and

 

		(3)	Soundperience
                                         GmbH, having its registered seat in Rüdesheim am Rhein, registered in the commercial
                                         register of the local court of Wiesbaden under no. HRB 26144, with registered business
                                         address at Ingelheimer Strasse 11, 65385 Rüdesheim am Rhein, Germany, (the “Company”
                                         or “Soundperience”; the Shareholder, the Investor and the Company
                                         each a “Party” and together the “Parties”)

 

agree
as follows:

 

Reference
Deed

 

In
order to facilitate notarisation, the Parties have agreed on 18 April 2017 on a reference deed including annexes (the “Reference
Deed”) to deed roll number 348/2017-B of the notary Rudolf Bezler with registered business address in Stuttgart-Bad
Canstatt.

 

This
Reference Deed is present in the original at todays’ notarisation. All Parties involved waive the reading out aloud and
the addition of the Reference Deed at todays’ notarisation. The Reference Deed and annexes thereto are referred to.

 

The
content of the Reference Deed is known to all Parties involved. Insofar as reference is made to the following Investment Agreement
including annexes, the Parties involved are in agreement that this pertains to the annexes or appendices of the Reference Deed,
unless otherwise explicitly referred to.

 

Preamble

 

		(A)	The
                                         Parties desire to enter into this Agreement for the purposes, among others of (i) providing
                                         for the investment by IntriCon of certain amounts in the Company, (ii) providing for
                                         the creation of new shares in the Company and their acquisition by IntriCon, (iii) providing
                                         for development of certain software by the Company, (iv) assuring continuity in the management
                                         and ownership of the Company and (v) limiting the manner and terms by which shares in
                                         the Company may be transferred.

 

		(B)	The
Investor has advanced to the Company a EUR 400,000.00 loan (the “Step 1 Loan”). In lieu of full repayment of
the Step 1 Loan, the Shareholder, the Investor 

 

    	3 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German language –

 

		 	and
the Company have agreed that (i) the Shareholder will increase the nominal capital of the Company by an additional 5,001 shares,
(ii) the Shareholder will be excluded from the subscription to the new shares, (iii) the Shareholder will permit the Investor
to subscribe to, and acquire (übernehmen), such new shares, (iv) the Investor will pay the nominal value of the new
shares of EUR 5,001.00 to the Company, (v) the Investor will pay a premium for such new shares in the amount of EUR 394,999.00
by offsetting this amount against repayment of an equal amount of the Step 1 Loan and (vi) the Company will repay to Investor
the balance of the EUR 5,001.00 owed on the Step 1 Loan.

 

		(C)	The
                                         Investor has agreed, and has already started, to advance to the Company an additional
                                         EUR 800,000.00 loan (the “Step 2 Loan”). In lieu of full repayment
                                         of the Step 2 Loan, the Shareholder, the Investor and the Company have agreed that (i)
                                         the Shareholder and the Investor as the then shareholders in the Company will further
                                         increase the nominal capital of the Company by an additional 19,019 shares, (ii) the
                                         Shareholder will be excluded from the subscription to the new shares, (iii) the Shareholder
                                         and the Investor will only permit the Investor to subscribe to, and acquire (übernehmen),
                                         such new shares, (iv) the Investor will pay the nominal value of the new shares of EUR
                                         19,019.00 to the Company, (v) the Investor will pay a premium for such new shares in
                                         the amount of EUR 780,981.00 by offsetting this amount against repayment of an equal
                                         amount of the Step 2 Loan and (vi) the Company will repay to Investor the balance of
                                         the EUR 19,019.00 owed on the Step 2 Loan.

 

		1.	Definitions

 

		1.1	In
                                         this Agreement:

 

“Action”
is defined in Clause 9.1.12.

 

“Affiliate”
“means, with respect to a particular person or entity, any person or entity controlling, controlled by or under common control
with that person or entity or its other Affiliates.

 

“Agreement”
means this Investment Agreement.

 

“Budget”
is defined in Clause 11.2.1.

 

“Business
Opportunity” is defined Clause 13.

 

“Company”
is defined at the beginning of this Agreement.

 

“Director”
is defined in Clause 11.1.1.

 

“Encumbrance”
means, with respect to any property or asset (including IP Rights), any pledges, charges, encumbrances (registered or unregistered),
security interests, (statutory) liens, land charges or mortgages (Grundpfandrechte), public easements (Baulasten),
other easements (Grunddienstbarkeiten), attachments (Pfändungen), hereditary building rights, options or other
adverse rights or any right of any kind in respect of any property or asset (e.g. retention of title rights, rights for transfer
of ownership in the relevant property or asset, rights to use the relevant property or asset, covenants not to sue and similar
arrangements).

 

“Existing
Shares” is defined in Clause 3.2.

 

“Financial
Statements” is defined in Clause 9.1.14.

 

“Future
Shareholder” is defined in Clause 11.1.

 

    	4 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German language –

  

“IntriCon”
is defined at the beginning of this Agreement.

 

“Investor”
is defined at the beginning of this Agreement.

 

“Laws”
is defined in Clause 9.1.11.

 

“Non-Transferring
Shareholder” is defined in Clause 12.2.1.

 

“Notice”
is defined in Clause 12.2.1.

 

“Offered
Shares” is defined in Clause 12.3.

 

“Other
Business” is defined in Clause 13.

 

“Repayment
Request” is defined in Clause 4.2.

 

“Representations
and Warranties” is defined in Clause 9.1.

 

“Rheinton”
is defined at the beginning of this Agreement.

 

“Shares”
means collectively, the Existing Shares, and when issued, the Step 1 Shares and the Step 2 Shares.

 

“Shareholder”
is defined at the beginning of this Agreement.

 

“Shareholder’s
Best Knowledge” means that, on the date of this Agreement, the Shareholder or any of its Affiliates, or any of their
respective representatives, including Mr Andreas Perscheid, had actual knowledge (positive Kenntnis) or lack of knowledge
due to negligence.

 

“Software”
is defined in Clause 4.1.

 

“Soundperience”
is defined at the beginning of this Agreement.

 

“Step
1 Loan” is defined in the Preamble.

 

“Step
1 Shares” is defined in Clause 3.3.

 

“Step
2 Completion Date” is defined in Clause 4.2.

 

“Step
2 Loan” is defined in the Preamble.

 

“Step
2 Shares” is defined in Clause 3.3.

 

“Terms”
is defined in Clause 12.2.1.

 

“Transfer”
is defined in Clause 12.1.

 

“Transferring
Shareholder” is defined in Clause 12.2.1.

 

		1.2	Unless
                                         otherwise indicated, the definition of a term in the singular shall include the definition
                                         of such term in the plural and vice versa.

 

		2.	Interpretation

 

		2.1	The
                                         index and headings are for convenience only and shall be ignored in construing this Agreement.

 

		2.2	Unless
                                         expressly otherwise provided in this Agreement, any reference to a Clause or a Schedule
                                         is a reference to a Clause or a Schedule of this Agreement.

 

		2.3	Any
                                         reference to a defined document is a reference to that defined document as amended, restated,
                                         waived, varied, supplemented, novated, extended or changed in any other way from time
                                         to time.

 

		2.4	The
                                         words “including”, “includes”, “in particular” or
                                         “such as” shall be deemed to be followed by the phrase “without limitation”
                                         and shall not be construed to express limitation in any way.

 

    	5 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German language –

  

		3.	Subject
                                         Matter of this Agreement

 

		3.1	The
                                         Company is a limited liability company (Gesellschaft mit beschränkter Haftung),
                                         incorporated under the laws of the Federal Republic of Germany, having its registered
                                         seat in Rüdesheim am Rhein, Germany, registered in the commercial register of the
                                         local court of Wiesbaden under no. HRB 26144, with registered business address at Ingelheimer
                                         Strasse 11, 65385 Rüdesheim am Rhein, Germany.

 

		3.2	The
                                         share capital of the Company in the amount of EUR 25,000 is divided into 25,000 shares
                                         in the nominal amount of EUR 1 per share with the consecutive numbers 1 to 25,000 (together
                                         the “Existing Shares”). All Existing Shares are held by the Shareholder.
                                         The Shareholder is also listed as the holder of all Existing Shares in the last list
                                         of shareholders dated 20 December 2012 which is recorded in the commercial register.

 

		3.3	Pursuant
                                         to the terms of this Agreement, the Shareholder intends to increase the nominal capital
                                         of the Company twice, and to create (i) in the context of the conclusion of this Agreement
                                         5,001 new shares (the “Step 1 Shares”) , and (ii) together with the
                                         Investor, upon the Step 2 Completion Date, an additional 19,019 new shares (the “Step
                                         2 Shares”) in the Company, and permit only the Investor to subscribe to, and
                                         acquire (übernehmen), these new shares.

 

		3.4	The
                                         Company does not own any real property.

 

		4.	Investment
                                         in Soundperience and Development of Software

 

		4.1	Step
                                         1 Investment

 

Prior
to the date hereof, IntriCon has advanced to the Company the sum of EUR 400,000.00 as the Step 1 Loan, the receipt of which is
hereby acknowledged by the Company and the Shareholder, for the purpose of developing certain self-fitting software that communicates
and interoperates with IntriCon’s hearing aids, as further described in Schedule 4.1.(A) attached hereto (the “Software”).
With regard to the Software, the Parties hereto have entered into and have executed a license agreement, corresponding, in form
and content, to Schedule 4.1 (C) attached hereto. The Parties agree that work to be performed under Step 1 on Schedule
4.1.(A) has been completed and, as consideration, the Step 1 Shares shall be created and acquired (übernommen)
by IntriCon (representing approximately 16.67% (post capital increase) of the Company’s nominal share capital) pursuant
to Clause 5. Attached as Schedule 4.1 (B) hereto is the study conducted in the German market required under the Step 1
Investment described in this paragraph.

 

		4.2	Step
                                         2 Investment

 

IntriCon
has agreed, and already started, to advance to the Company the sum of EUR 800,000.00 as the Step 2 Loan at the times and in the
amounts as indicated on the Funding Schedule set forth under Step 2 on Schedule 4.1(A). The Company shall use its best
efforts to continue to develop the Software, as further described under Step 2 on Schedule 4.1(A). Upon completion of the
work identified under Step 2 on Schedule 4.1(A) (the “Step 2 Completion Date”), the Shareholder and
the Investor shall create the Step 2 Shares (representing approximately 32.33% (post the second capital increase) of the Company’s
nominal share capital) pursuant to Clause 6, bringing the total shares in the Company held by IntriCon to 24,020 shares (representing
approximately 49% of the then nominal share capital

 

    	6 

     

    

 

English
Convenience Translation

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of the Company). In the event that the work to be performed under Step 2 is
not completed on a timely and – from IntriCon’s perspective – satisfactory basis as outlined in Schedule 4.1(A),
upon written notice to the Company, IntriCon shall have the right to cease funding Step 2 and the Company shall repay, without
undue delay (unverzüglich) the total investment then provided by IntriCon under Step 2 (the “Repayment Request”).
Achievement of the timing under Step 2 is dependent on progress and documentation of the new hearing aid product line, which is
the responsibility of IntriCon. The Company is not responsible for missing hearing aid documents, mistakes on hearing aid product
developments and hearing aid hardware failures or missing features. The Company will request the needed materials to keep within
the Step 2 timeline as described under Step 2 on Schedule 4.1(A) and IntriCon shall use its commercially reasonable efforts
to deliver the materials as agreed between IntriCon and the Company. Neither the Company nor Rheinton is responsible for delays
or failures of hearing aid hardware, software supplied by a third party, or IntriCon’s firmware.

 

		5.	Step
                                         1 Capital Increase

 

		5.1	Immediately
                                         after the notarization of this Agreement, the Shareholder will adopt the resolution to
                                         increase the share capital of the Company as attached as Schedule 5.1(A), and
                                         the Shareholder and the Company shall cause the commercial register application attached
                                         as Schedule 5.1(B) to be filed without undue delay (unverzüglich).

 

		5.2	The
                                         Shareholder, the Investor and the Company hereby agree that the Investor will be entitled
                                         to offset the claim for repayment of the Step 1 Loan in the amount of EUR 394,999.00
                                         against the Investor’s future obligation to pay the premium in the same amount,
                                         as further described in more detail in Schedule 5.1 (A).

 

		5.3	The
                                         Company hereby confirms to the Investor that the obligation to pay the premium described
                                         in more detail in Schedule 5.1 (A) will have been fulfilled upon the Investor
                                         declaring the offsetting against the repayment of the Step 1 Loan in the amount of EUR
                                         394,999.00.

 

		5.4	The
                                         Company shall pay to the Investor the amount of EUR 5,001.00 without undue delay (unverzüglich)
                                         representing the balance of the Step 1 Loan.

 

		6.	Step
                                         2 Capital Increase

 

		6.1	As
                                         of the earlier of

 

		(i)	the
                                         Step 2 Completion Date, or

 

		(ii)	at
                                         the option of the Investor, the Repayment Request not having been fulfilled within 20
                                         Business Days in Frankfurt am Main, Germany,

 

the
Shareholder and the Investor will adopt the resolution to increase the share capital of the Company as attached as Schedule
6.1(A), and the Shareholder, the Investor and the Company shall cause the commercial register application attached as Schedule
6.1 (B) to be filed without undue delay (unverzüglich) thereafter.

 

		6.2	The
                                         Shareholder, the Investor and the Company hereby agree that the Investor will be entitled
                                         to offset the claim for repayment of the Step 2 Loan in the amount advanced to the Company
                                         against the Investor’s future obligation to pay the premium in the same amount,
                                         as further described in more detail in Schedule 6.1 (A).

 

    	7 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German language –

  

		6.3	The
                                         Company hereby confirms to the Investor that the obligation to pay the premium described
                                         in more detail in Schedule 6.1 (A) will have been fulfilled upon the Investor
                                         declaring the offsetting against the repayment of the Step 2 Loan in the amount advanced
                                         to the Company, up to a maximum amount of EUR 780,981.00.

 

		6.4	Immediately
                                         after the capital increase and offsetting described in more detail in subparas. 6.2 and
                                         6.3, the Company shall pay to the Investor the amount of EUR 19,019.00 without undue
                                         delay (unverzüglich) representing the balance of the Step 2 Loan.

 

		7.	[Intentionally
                                         omitted]

 

		8.	Amendment
                                         of Articles of Association

 

Immediately
prior to the notarization of this Agreement, the Shareholder adopted a notarized resolution to amend the articles of association
of the Company to reflect the amendment set out in Schedule 5.1(A) (AoA) and the managing director of the Company has signed
an application to file the amended articles of association with the commercial register, which the acting notary will file in
the context of the capital increase.

 

		9.	Representations
                                         and Warranties

 

		9.1	The
                                         Shareholder hereby represents and warrants to the Investor by way of an independent guarantee
                                         (selbstständiges Schuldversprechen) within the meaning of section 311 (1)
                                         German Civil Code (Bürgerliches Gesetzbuch) that the statements set forth
                                         in this Clause 9.1 (together the “Representations and Warranties”)
                                         are correct on the date of this Agreement and at the points in time at which the Investor
                                         will acquire (übernehmen) the Step 1 Shares and the Step 2 Shares, respectively.

 

		9.1.1	The
                                         Company is a corporation duly established and validly existing as a limited liability
                                         company (Gesellschaft mit beschränkter Haftung) under the laws of the Federal
                                         Republic of Germany.

 

		9.1.2	The
                                         information in Clause 3 is correct and complete. The Shares are fully paid in. The share
                                         capital of the Company has not been repaid or reimbursed to the shareholders. There are
                                         no obligations to make further contributions (Nachschusspflichten).

 

		9.1.3	The
                                         Shareholder is the legal and economic owner of the Shares. The Shares are not subject
                                         to a trust relationship (Treuhandverhältnis).

 

		9.1.4	The
                                         Shares are free and clear of any Encumbrances or other third party rights and have not
                                         been previously pledged or charged in favour of third parties. There are no options or
                                         rights which entitle any person to have any Shares in the Company issued or transferred.

 

		9.1.5	The
                                         Shareholder is entitled to create the Step 1 Shares and the Step 2 Shares and when issued
                                         to Investor as contemplated by this Agreement, such shares shall be fully paid and free
                                         and clear of any Encumbrances or other third party rights.

 

		9.1.6	All
                                         facts and circumstances concerning the Company which are capable of being registered
                                         in the commercial register have been registered therein. As of the date of this Agreement,
                                         the last list of shareholders

 

    	8 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German language –

 

		 	dated 20 December 2012 recorded in the commercial register
                                         is correct and complete.

 

		9.1.7	The
                                         Company is not party to any silent partnership agreements (stille Gesellschaften),
                                         any profit and loss transfer and/or control agreements (Ergebnisabführungs- und/oder
                                         Beherrschungsverträge), any enterprise agreements (Unternehmensverträge)
                                         within the meaning of sections 291, 292 German Stock Corporation Act (Aktiengesetz)
                                         or similar arrangements under which any third party would be entitled to a participation
                                         in the profit or revenue of the Company.

 

		9.1.8	With
                                         regard to the Shareholder and the Company, no insolvency proceedings are pending and
                                         no filing for such proceedings has been made nor is such filing required. Neither the
                                         Shareholder nor the Company are imminently illiquid within the meaning of section 18
                                         German Insolvency Code (Insolvenzordnung).

 

		9.1.9	The
                                         place from which the Shareholder and the Company are actually administrated and where
                                         all material decisions are taken (tatsächlicher Verwaltungssitz) is located
                                         in the Federal Republic of Germany.

 

		9.1.10	Each
                                         of Rheinton and the Company has full power and authority to enter into this Agreement
                                         and the documents to be delivered hereunder, to carry out its obligations hereunder and
                                         to consummate the transactions contemplated hereby. This Agreement constitutes the legal,
                                         valid and binding obligation of each of Rheinton and the Company, enforceable against
                                         each of Rheinton and the Company in accordance with its terms.

 

		9.1.11	The
                                         execution and performance by each of Rheinton and the Company of this Agreement and the
                                         documents to be delivered hereunder, and the consummation of the transactions contemplated
                                         hereby, do not and will not: (a) violate or conflict with the articles of association
                                         or other organizational documents of each of Rheinton and the Company; (b) violate or
                                         conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation
                                         (collectively, “Laws”) applicable to Rheinton or the Company; (c)
                                         conflict with, or result in (with or without notice or lapse of time or both) any violation
                                         of, or default under, or give rise to a right of termination, acceleration or modification
                                         of any obligation or loss of any benefit under any contract or other instrument to which
                                         Rheinton or the Company is a party; or (d) result in the creation or imposition of any
                                         Encumbrances on the Step 1 Shares or the Step 2 Shares or the assets of the Company.
                                         No consent, approval, waiver, permit, license or authorization is required to be obtained
                                         by Rheinton or the Company from any person or entity (including any governmental authority)
                                         in connection with the execution and performance by them of this Agreement and the consummation
                                         of the transactions contemplated hereby.

 

		9.1.12	There
                                         is no claim, action, suit, proceeding or governmental investigation (“Action”)
                                         of any nature pending or threatened against or by Rheinton or the Company.

 

		9.1.13	Each
                                         of Rheinton and the Company has been and remains in compliance with all applicable Laws
                                         and there exists no condition or event relating to Rheinton or the Company which would
                                         give rise to a violation or default of any applicable Law. Each of Rheinton and the Company
                                         maintains in full

 

    	9 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German language –

 

		 	force and effect all licenses, permits, certifications or other governmental
                                         authorizations necessary for their respective continued lawful operation, and no such
                                         licenses, permits, certifications or other governmental authorizations will be forfeited
                                         or affected by the transactions contemplated by this Agreement.

 

		9.1.14	True,
                                         correct and complete copies of the unaudited balance sheet and statements of operations
                                         of the Company as of and for the years ended 2014 and 2015 and August 2016 year-to-date
                                         (collectively, the “Financial Statements”) are attached as Schedule
                                         9.1.14 hereto. Except as set forth on the Financial Statements, the Company does
                                         not have any liabilities or obligations of any kind.

 

		9.1.15	Attached
                                         hereto as Schedule 8 5.1 (A) is a true and correct copy of the
                                         articles of association of the Company as amended by way of a shareholder’s resolution.
                                         Other than the articles of association of the Company, there are no voting trusts, proxies
                                         or other agreements or understandings in effect with respect to the voting or transfer
                                         of any of the Shares or management of the Company.

 

		9.1.16	The
                                         Company owns and has valid title to the Software or holds full licenses for the sale,
                                         use, assignment and licensing of the Software. To the Shareholder’s Best Knowledge,
                                         the Software does not infringe, violate, dilute or misappropriate the intellectual property
                                         of any person or entity or contain any virus or other malware designed to damage, detrimentally
                                         interfere with or expropriate any systems, data, personal information or property of
                                         another. To the Shareholder’s Best Knowledge, none of the source, object or executable
                                         code housed in or delivered with the Software is subject to any open source agreement
                                         or other agreement which would restrict the Company’s or IntriCon’s rights
                                         to use, reproduce, or distribute the same.

 

		9.1.17	No
                                         broker, finder or investment banker is entitled to any brokerage, finder’s or other
                                         fee or commission in connection with the transactions contemplated by this Agreement
                                         based upon arrangements made by or on behalf of each of Rheinton and the Company.

 

		9.2	The
                                         Representations and Warranties are given only within the scope of and subject to the
                                         limitations, rights and remedies set forth in Clause 10 which constitute an integral
                                         part of the Representations and Warranties.

 

		9.3	The
                                         Representations and Warranties shall not constitute an agreement on a certain condition
                                         (Beschaffenheitsvereinbarung) within the meaning of section 434 German Civil Code
                                         or a guarantee of quality concerning a condition (Beschaffenheitsgarantie) within
                                         the meaning of section 443 German Civil Code, but a sui generis contractual liability
                                         regime (vertragliches Haftungsregime sui generis) to which sections 443, 444 German
                                         Civil Code shall not apply.

 

		10.	Remedies

 

		10.1	In
                                         the event that any of the Representations and Warranties is incorrect, the Shareholder
                                         shall, within four weeks of receipt of a corresponding request by the Investor, establish
                                         the situation that would exist had the relevant Representations and Warranties been correct
                                         (restitution in kind (Naturalrestitution)). If and to the extent that (i) the
                                         Shareholder fails to effect restitution in kind within such time

 

    	10 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German language –

 

		 	period
or (ii) restitution in kind is not possible, the Investor shall have the right to claim monetary damages from the Shareholder.

 

		10.2	For
                                         the purposes of determining the liability of the Shareholder, sections 249 to 257 German
                                         Civil Code (Bürgerliches Gesetzbuch) shall apply.

 

		10.3	The
                                         rights and remedies provided for in this Clause 10 shall be the exclusive rights and
                                         remedies of the Investor in respect of any incorrectness of the Representations and Warranties.
                                         Subject to the initial claims for specific performance and rights and remedies for a
                                         breach of obligations and covenants expressly set forth in this Agreement, all other
                                         rights and remedies of the Investor, irrespective of their nature, amount or legal basis,
                                         are excluded. This shall apply in particular to rights for breach of contractual or pre-contractual
                                         obligations, any rights to reduction of the purchase price, to withdrawal or to avoidance
                                         (Anfechtung) and any rights for frustration of agreement pursuant (section 313
                                         German Civil Code).

 

		10.4	All
                                         rights and claims of the Investor under or in connection with this Agreement shall become
                                         time-barred (verjähren) within 24 months of the notarization of this Agreement.

 

		10.5	Nothing
                                         in this Agreement shall have the effect of limiting any liability of the Shareholder
                                         arising from misconduct (Vorsatz) or fraudulent misrepresentation (arglistige
                                         Täuschung).

 

		11.	Management

 

		11.1	Managing
                                         Directors

 

As
from the date of this Agreement, each of IntriCon and Rheinton (each a “Future Shareholders” and collectively,
the “Future Shareholders”) shall vote all Shares held by such Future Shareholder and shall take all other necessary
or desirable actions within such Future Shareholder’s control (including attendance at meetings in person or by proxy for
purposes of obtaining a quorum and execution of written consents in lieu of meetings), and the Future Shareholders shall cause
the Company to take all necessary or desirable actions within its control (including calling special director and shareholder
meetings), so that

 

		11.1.1	The
                                         number of managing directors (each a “Director” and, collectively,
                                         the “Directors”) of the Company shall be one or, if IntriCon so requests
                                         two, or such other number as may be unanimously determined by the Future Shareholders
                                         from time to time; and

 

		11.1.2	Each
                                         of the Shareholders shall have the right to designate one person to be elected to serve
                                         as a Director at all times. The initial designee of Rheinton is Andreas Perscheid; IntriCon
                                         does not wish to designate a Director at this time; and

 

		11.1.3	No
                                         Director shall be authorised to represent the Company when entering into transactions
                                         with himself/herself, including as the representative of a third party (restrictions
                                         set forth in section 181 German Civil Code, Bürgerliches Gesetzbuch), unless
                                         the Future Shareholders have explicitly previously approved of this in writing.

 

		11.1.4	The
                                         Company shall, and the Future Shareholders shall cause each Director designated by them
                                         (it being understood that Andreas Perscheid has been designated by the Shareholder) to,
                                         obtain each Future

 

    	11 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German
language –

 

		 	Shareholders’ written approval prior to entering into any transaction
                                         outside ordinary business that has not been provided for and approved by the Future Shareholders
                                         in the Budget, including but not limited to those items described in Section 11.2.

 

To
the extent that any of the persons elected pursuant to the foregoing procedure cease to be a Director for any reason, the vacancy
shall be filled by the election of a person designated by the Shareholder whose designee ceased to be a Director.

 

		11.2	Actions
                                         Requiring the Consent of all of the Future Shareholders

 

Notwithstanding
any provision of this Agreement to the contrary, the Company shall not take, and the Future Shareholders shall cause each Director
designated by them not to take, any of the following actions, directly or indirectly, without the prior written consent of each
Future Shareholder:

 

		11.2.1	Incur
                                         or guarantee any indebtedness, other than as provided in a budget approved by the Future
                                         Shareholders (the “Budget”). The Budget will be prepared by the Managing
                                         Director on or before 30 October of each calendar year and will submit the Budget to
                                         the Future Shareholders. It is deemed adopted, if no Future Shareholder has objected
                                         on or before 31 December of the same calendar year. In case of doubt, the Future Shareholders
                                         decide by shareholder resolution, in an extraordinary shareholder meeting requiring the
                                         consent of all Future Shareholders.

 

		11.2.2	Require
                                         the Future Shareholders to make any additional capital contribution to the Company;

 

		11.2.3	Declare
                                         or pay any distributions or dividends to Future Shareholders;

 

		11.2.4	Pledge
                                         any securities, Software or other material assets of the Company;

 

		11.2.5	Issue
                                         or sell any additional shares in the Company, including the Shares, (in this case each
                                         Future Shareholder shall have a pre-emptive right to purchase its pro rata share of any
                                         additional shares);

 

		11.2.6	Make
                                         any capital expenditure, other than as provided in the Budget;

 

		11.2.7	Sell,
                                         dispose or license all or a substantial portion of the assets of the Company, including
                                         without limitation any of the Software, or merge with any other entity; the licensing
                                         of Software in the the ordinary course of business is permitted;

 

		11.2.8	Acquire
                                         all or any material portion of the equity or assets of another company, whether by merger,
                                         acquisition, combination or otherwise;

 

		11.2.9	Dissolve
                                         or liquidate the Company, or take any other similar action; or

 

		11.2.10	Amend
                                         the Company’s articles of association.

 

		12.	Restrictions
                                         on Transfer

 

		12.1	General

 

No
Future Shareholder shall sell, transfer, assign, pledge, grant a security interest in, or grant, cause or permit any Encumbrance
on, or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of
Law) (a “Transfer”) any interest in its shares in the Company, including the Shares, other than with the unanimous
written consent of the other

 

    	12 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German
language –

 

Future Shareholder. For the avoidance of doubt, the sale of stocks of IntriCon or to IntriCon’s
parent shall not be deemed a Transfer under this Agreement.

 

		12.2	Transfer
                                         Requirements

 

In
the event that any Future Shareholder desires to transfer shares in the Company, including the Shares, such Transfer shall not
be effected until:

 

		12.2.1	such
                                         Future Shareholder (the “Transferring Shareholder”) shall have notified
                                         the other Future Shareholder (the “Non-Transferring Shareholder”)
                                         in writing (the “Notice”) of the proposed disposition and shall have
                                         furnished the Non-Transferring Shareholder with a detailed statement of the circumstances
                                         surrounding the proposed Transfer, including any proposed terms of the Transfer, including
                                         Transfer price (collectively, the “Terms”), and the Non-Transferring
                                         Shareholder shall have (i) declined or failed to exercise its right of first refusal
                                         set forth in Clause 12.3 and (ii) consented (in its sole and absolute discretion) in
                                         writing to such proposed Transfer; and

 

		12.2.2	the
                                         transferee has agreed in writing to be bound by the terms of this Agreement.

 

		12.3	Right
                                         of First Refusal

 

Without
limiting the generality of the preceding Section, the Non-Transferring Shareholder shall have the option to purchase all of the
shares (“Offered Shares”) which is the subject of the proposed Transfer at the price and on the other terms
and conditions contained in the Terms, and may exercise its option by giving written notice of exercise to the Transferring Shareholder
within 45 days after the date of the Notice, and closing on such shares shall occur within 15 days thereafter via electronic transmission
of documents.

 

		12.4	Transfers
                                         in Violation of Agreement

 

Any
Transfer or attempted Transfer of any shares in the Company, including the Shares, in violation of any provision of this Agreement
shall be void, and the Shareholder, the Investor and the Company shall not cause to filed or permit to be filed any amended shareholders’
list with the commercial register and the Company shall not treat any purported transferee of such shares as the owner of such
shares for any purpose.

 

		13.	Other
                                         Business Activities

 

The
Parties hereto, including the Company, expressly acknowledge and agree that: (i) each Future Shareholder and its Affiliates are
permitted to have, and may presently or in the future have, investments or other business or strategic relationships, ventures,
agreements or other arrangements with persons or entities other than the Company or any Company subsidiary that are engaged in
the business of the Company or any Company subsidiary, or any other business, or that are or may be competitive with the Company
or any Company subsidiary, (any such other investment or relationship, an “Other Business”), except that no
party may enter into agreements with third parties with comparable content to the Signison Agreement which agreements directly
compete with Signison (as defined below); (ii) no Future Shareholder or its Affiliates will be prohibited by virtue of such Shareholder’s
investment in the Company from pursuing and engaging in any Other Business; (iii) no Future Shareholder or its Affiliates will
be obligated to

 

    	13 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German
language –

 

inform the Company or any other Future Shareholder of any opportunity, relationship or investment in any Other
Business (a “Business Opportunity”) or to present any Business Opportunity to the Company, and the Company
and each Future Shareholder hereby renounces any interest in any Business Opportunity and any expectancy that a Business Opportunity
will be offered to it; (iv) nothing contained herein shall limit, prohibit or restrict any Director from serving on the board
of directors or other governing body or committee of any Other Business; and (v) no Future Shareholder will acquire, be provided
with an option or opportunity to acquire, or be entitled to any interest or participation in any Other Business or Business Opportunity
as a result of the participation therein of any of a Future Shareholder or its Affiliates. The parties hereto expressly authorize
and consent to the involvement of the any Future Shareholder and/or its Affiliates in any Other Business. The parties hereto expressly
waive, to the fullest extent permitted by applicable Law, any rights to assert any claim that such involvement breaches any fiduciary
or other duty or obligation owed to the Company or any Future Shareholder or to assert that such involvement constitutes a conflict
of interest by such persons or entities with respect to the Company or any Future Shareholder. “Signison Agreement”
means that certain agreement dated as of 6 October, 2016 between Soundperience, IntriCon GmbH (registered with the commercial
register in Munich under HRB 76453) and IntriCon Corp. (registered in the State of Pennsylvania with the Secretary of State, with
business address at 1260 Red Fox Road, Arden Hills, MN 55112, USA), and “Signison” means Signison GmbH.

 

		14.	Costs
                                         and Expenses

 

The
costs for the notarization of this Agreement shall be borne by the Investor. The costs for the capital increases described in
this Agreement, including the cost of amending the Articles of Amendment and making any filings with the commercial register,
shall be borne by the Investor. Any other costs and expenses shall be borne by the party to this Agreement commissioning or incurring
the relevant costs and expenses.

 

		15.	Notices
                                         and Communication

 

		15.1	Any
                                         notice or other communication under this Agreement shall be in English or, if in any
                                         other language, accompanied by a translation into English.

 

		15.2	All
                                         notices, requests, consents, claims, demands, waivers and other communications hereunder
                                         shall be in writing and shall be deemed to have been given (a) when delivered by hand
                                         (with written confirmation of receipt); (b) when received by the addressee if sent by
                                         an internationally recognized overnight courier (receipt requested); or (c) on the date
                                         sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if
                                         sent during normal business hours of the recipient, and on the next business day if sent
                                         after normal business hours of the recipient. Such communications must be sent to the
                                         respective parties at the addresses indicated below (or at such other address for a party
                                         as shall be specified in a notice given in accordance with this Section). Any notice
                                         to the Company shall be given by providing notice to each of the Shareholders as set
                                         forth below.

 

    	14 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German
language –

 

	

                                         If to IntriCon:

         

         

         

         

         

         

          

         

        with
        a copy to:

         

         

         
	IntriCon 

        Attention:
Scott Longval 

        1260
Red Fox Road 

        Arden
Hills, MN 55112 

        USA

         

        Facsimile:
+1 651-636-8944 

        E-mail:
Slongval@intricon.com  

        Blank
Rome LLP 

        Attention:
Francis E. Dehel 

        One
Logan Square 

        Philadelphia
PA 19103 

        USA

          

        Facsimile:
+1 215-832-5532 

        E-mail:
dehel@blankrome.com 

	 	
	If
    to Rheinton:	Rheinton
GmbH 

        Attention:
Geschäftsführung 

        Ms
Kerstin Perscheid 

        Ingelheimer
Strasse 11 

        65385
Rüdesheim am Rhein 

        Germany 

         

        Facsimile:
+49 6722 500985 

        E-mail:
kperscheid@rheinton.de

         

	If
    to the Company:	Soundperience
GmbH 

        Attention:
Geschäftsführung 

        Mr.
Andreas Perscheid 

        Ingelheimer
Strasse 11 

        65385
Rüdesheim am Rhein 

        Germany

          

        Facsimile:
+49 6722 710788 

        E-mail:
andreas.perscheid@soundperience.com

         

	with
    a copy to:	IntriCon 

        Attention:
Scott Longval   

        1260
Red Fox Road 

        Arden
Hills, MN 55112  

        USA

         

        Facsimile:
+1 651-636-8944 

        E-mail:
Slongval@intricon.com 

 

    	15 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German
language –

  

		16.	Miscellaneous

 

		16.1	Governing
                                         law. This Agreement shall be governed by and construed in accordance with the laws of
                                         the Federal Republic of Germany and excluding any international conflict-of-law rules.

 

		16.2	Venue.
                                         Exclusive place of jurisdiction for all disputes arising under or in connection with
                                         this Agreement is Frankfurt am Main, Germany.

 

		16.3	Entire
                                         Agreement. This Agreement, including the Schedules thereto as well as a License Agreement
                                         among the parties, constitute the sole and entire agreement of the parties to this Agreement
                                         with respect to the subject matter contained herein, and supersede all prior and contemporaneous
                                         understandings and agreements, both written and oral, with respect to such subject matter.
                                         The Parties acknowledge and agree that this Agreement shall not affect or modify their
                                         joint venture agreement regarding Signison.

 

		16.4	Assigns.
                                         No party to this Agreement is entitled to transfer its rights under this Agreement without
                                         the prior written consent of the other party to this Agreement, except that (a) if IntriCon
                                         shall merge or consolidate with or into, or sell or otherwise transfer all or substantially
                                         all of its assets to, another entity which assumes IntriCon’s obligations under
                                         this Agreement, IntriCon may assign its rights hereunder to that entity and (b) IntriCon
                                         may assign this Agreement to any entity which directly or indirectly owns all of the
                                         equity of IntriCon. Any attempted transfer or assignment in violation of this Section
                                         shall be void.

 

		16.5	Severability.
                                         Should any individual provision of this Agreement be or become wholly or partially invalid
                                         or unrealisable, or should there prove to be an omission herein, this shall not affect
                                         the validity of the remaining provisions. In the place of the invalid or unrealisable
                                         provision or in order to fill the gap, the parties to this Agreement undertake to agree
                                         on an appropriate provision that, within the framework of what is legally permissible,
                                         comes closest to what the parties to this Agreement intended or would have intended in
                                         accordance with the purpose of this Agreement if they had considered the matter at the
                                         outset.

 

		16.6	No
                                         Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto
                                         and their respective successors and permitted assigns and nothing herein, express or
                                         implied, is intended to or shall confer upon any other person or entity any legal or
                                         equitable right, benefit or remedy of any nature whatsoever, under or by reason of this
                                         Agreement.

 

		16.7	Headings.
                                         The headings in this Agreement are for reference only and shall not affect the interpretation
                                         of this Agreement.

 

		16.8	Amendment
                                         and Modification; Waiver. This Agreement may only be amended, modified or supplemented
                                         by an agreement in writing signed by each party hereto. No waiver by any party of any
                                         of the provisions hereof shall be effective unless explicitly set forth in writing and
                                         signed by the party so waiving. Except as otherwise set forth in this Agreement, no failure
                                         to exercise, or delay in exercising, any rights, remedy, power or privilege arising from
                                         this Agreement shall operate or be construed as a waiver thereof; nor shall any single
                                         or partial exercise of any right, remedy, power or privilege hereunder preclude any other
                                         or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

		16.9	Form
                                         requirement. The parties to this Agreement shall agree on any amendments, or adjustments
                                         to this Agreement pursuant to Clause 16.5, in each

 

    	16 

     

    

 

English
Convenience Translation

– Original Agreement has been executed in German
language –

 

		 	case including this Clause 16.9, in
                                         writing unless notarization is required in which case such amendments or adjustments
                                         have to be notarized.

 

The
above record was read aloud by the notary to the persons appearing, approved by them and signed by the persons appearing and the
acting notary in their own hand as follows:

 

    	17

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