Document:

Exhibit 10.1

 

EXECUTION VERSION

 

asset purchase modification
agreement

 

THIS asset
purchase modification AGREEMENT (the “Agreement”)
is entered into on the 12th day of April 2016, by and among:

 

		(1)	XG TECHNOLOGY, INC., a Delaware corporation, with its principal place of business at 240
South Pineapple Avenue, Suite 701, Sarasota, Florida, 34236 (referred to herein as "Borrower").

 

		(2)	INTEGRATED MICROWAVE TECHNOLOGIES, LLC, a Delaware limited liability company with its principal
place of business c/o Skyview Capital, LLC, 2000 Avenue of the Stars, Suite 810-N, Los Angeles, CA 90067 (“IMT”), and/or
its successors and assigns (together with IMT, collectively, the “Holder”).

 

Individually, each of
Borrower and Holder is a “Party” and collectively, the “Parties”.

 

Background

 

WHEREAS, the Borrower and the Holder
entered into an Asset Purchase Agreement on 29th January 2016 (the “APA”), and

 

WHEREAS, under the terms of the
APA, Borrower issued and delivered to Holder the Initial Payment Note (the “IPN”), dated 29th January
2016, pursuant to which Borrower unconditionally agreed and promised to pay to the order of Holder, in lawful money of the United
States of America, the principal sum of ONE MILLION FIVE HUNDRED THOUSAND ($1,500,000) DOLLARS (the “IPN Principal Indebtedness”),
together with interest on the outstanding IPN Principal Indebtedness, at the Interest Rate of six (6%) percent per annum, on or
before March 31, 2016 (the “IPN Maturity Date”), and

 

WHEREAS, Borrower issued and delivered
to Holder the Deferred Payment Note (the “DPN”), dated on 29th January 2016, pursuant to which
Borrower unconditionally agreed and promised to pay to the order of Holder, in lawful money of the United States of America, the
principal sum of ONE MILLION FIVE HUNDRED THOUSAND ($1,500,000) DOLLARS (the “DPN Principal Indebtedness”), together
with interest on the outstanding DPN Principal Indebtedness at the Interest Rate of six (6%) percent per annum, on or before July
31, 2017 (the “DPN Maturity Date”), and

 

WHEREAS, the Parties have agreed
to modify the original payment plan to settle all sums due and owing under the IPN and DPN, plus all accrued interest, and cancel
the IPN and DPN, and wish to record those terms, on a binding basis, in this Agreement, and

 

NOW, THEREFORE, in consideration
of the premises, Borrower hereby agrees as follows:

 

Agreed terms

 

		1.	Definitions and interpretation

 

		1.1	In this Agreement, unless the context otherwise requires, the definitions set out in the IPN and
DPN shall apply to the meaning of such terms in this Agreement.

 

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EXECUTION VERSION

 

		1.2	“Cash Proceeds” means the net cash or cash equivalent received by Holder upon
sale of any Preferred Shares delivered by Borrower under this Agreement, net of any transaction costs or expenses, evidence which
shall be provided to the Borrower at the time of sale of such Preferred Shares.

 

		1.3	“Closing Price” shall mean the closing price of Shares as listed on the NASDAQ
stock exchange on the trading day immediately before the day on which such price is to apply to any given set of circumstances,
formula or value determination.

 

		1.4	“Preferred Shares” means shares of the Borrower’s Series D Convertible
Preferred Stock, par value $0.00001 per share. The Series D Convertible Preferred Stock will have a stated value of $1.00 per share,
and will convert into Shares at a conversion price of $0.10 per share.

 

		1.5	“Principal Market” shall mean the Nasdaq Capital Market.

 

		1.6	“Shares” means shares of the Borrower’s common stock, par value $0.00001
per share.

 

		2.	Effect of this agreement

 

The Parties hereby agree that
this Agreement shall be immediately fully and effectively binding on them upon Borrower’s compliance with Section 3.1 below,
failing which this Agreement shall be null and void and of no further force nor effect.

 

		3.	Payment

 

		3.1	Borrower shall immediately pay to Holder the total sum of Five Hundred Thousand Dollars ($500,000),
plus all accrued interest at a rate of 9% per annum (“Revised Interest”), as applicable, earned under the IPN
and the DPN, payable by way of wire transfer to the following bank account (the “Bank Account”):

 

Bank:

Routing Number:

Account Name:

Account Number:

 

		3.2	Before December 31, 2016, Borrower shall deliver to Holder Preferred Shares having an aggregate
value of Cash Proceeds of not less than Two Million Five Hundred Thousand Dollars ($2,500,000), plus all accrued Revised Interest
from the date of this Agreement. The Preferred Shares will issued in tranches of Two Hundred Fifty Thousand dollars ($250,000)
(each a “Tranche”), with the first Tranche being issued within 10 business days of the date of this Agreement.

 

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EXECUTION VERSION

 

		3.3	Borrower shall immediately deliver further Tranches of Preferred Shares once Holder advises Borrower
that it has disposed of the Shares from the previously released Tranche on the Principal Market and realised Cash Proceeds. Every
time Holder requests a further Tranche, it will provide an updated account of its Cash Proceeds.

 

		3.4	Following the issuance of each Tranche, the Borrower will register the underlying Shares with U.S.
Securities and Exchange Commission on a Registration Statement on Form S-1 or Form S-3, if available, within five (5) business
days of the issuance of the Tranche.

 

		3.5	Notwithstanding anything contained herein to the contrary, the number of Shares issuable by the
Borrower through the conversion of the Preferred Shares shall not exceed 19.9% of the Borrower’s outstanding Shares as of
the date of this Agreement or such other amount required to comply with the shareholder approval rules of the Principal Market
(the “Maximum Common Stock Issuance”). If such issuance of Shares could cause a delisting on the Principal Market,
then the Maximum Common Stock Issuance shall first be approved by the Borrower’s shareholders in accordance with applicable
law and the By-laws and Certificate of Incorporation of the Borrower, as amended. The parties understand and agree that the Borrower’s
failure to seek or obtain such shareholder approval shall in no way adversely affect the validity and due authorization of the
issuance and sale of Preferred Shares, and that such approval pertains only to the applicability of the Maximum Common Stock Issuance
limitation.

 

		3.6	Time shall be of the essence in relation to all payments due under this Agreement.

 

		4.	Release

 

This Agreement is in full and
final settlement of, and each Party hereby releases and forever discharges, all and/or any actions, claims, rights, demands and
set-offs, whether in this jurisdiction or any other, whether or not presently known to the Parties or to the law, and whether in
law or equity, that it, its parent, subsidiaries, assigns, transferees, representatives, principals, agents, officers or directors
(“Related Parties”) or any of them ever had, may have or hereafter can, shall or may have against the other Party or
any of its Related Parties arising out of or connected with:

 

		(a)	the IPN;

 

		(b)	the DPN;

 

		(c)	the APA; and

 

		(d)	any other matter arising out of or connected with the relationship between the Parties

 

(collectively the “Released
Claims”).

 

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EXECUTION VERSION

 

		5.	Agreement not to sue

 

Each Party agrees, on behalf
of itself and on behalf of its Related Parties not to sue, commence, voluntarily aid in any way, prosecute or cause to be commenced
or prosecuted against the other Party or its Related Parties any action, suit or other proceeding concerning the Released Claims,
in this jurisdiction or any other.

 

		6.	Costs

 

The Parties shall each bear their
own legal costs in relation to this Agreement.

 

		7.	Warranties and authority

 

Each Party warrants and represents
to the other with respect to itself that it has the full right, power and authority to execute, deliver and perform this Agreement.

 

		8.	No admission

 

This Agreement is entered into
in connection with the compromise of disputed matters and in the light of other considerations. It is not, and shall not be represented
or construed by the Parties as, an admission of liability or wrongdoing on the part of either Party to this Agreement or any other
person or entity.

 

		9.	Severability

 

If any provision of this Agreement
is found to be void or unenforceable, that provision shall be deemed to be deleted from this Agreement and the remaining provisions
of this Agreement shall continue in full force and effect and the Parties shall use their respective reasonable endeavours to procure
that any such provision is replaced by a provision which is valid and enforceable, and which gives effect to the spirit and intent
of this Agreement.

 

		10.	Entire agreement

 

		10.1	This Agreement constitutes the entire understanding and agreement between the Parties in relation
to the subject matter of this Agreement.

 

		10.2	Each Party acknowledges that it has not entered into this Agreement in reliance wholly or partly
on any representation or warranty made by or on behalf of the other Party (whether orally or in writing) other than as expressly
set out in this Agreement.

 

		11.	Confidentiality

 

The terms of this Agreement,
and the substance of all negotiations in connection with it, are confidential to the Parties and their advisers, who shall not
disclose them to, or otherwise communicate them to, any third party without the written consent of the other Party other than:

 

		(a)	to the Parties' respective auditors, insurers and lawyers on terms which preserve confidentiality;
and

 

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EXECUTION VERSION

 

		(b)	pursuant to an order of a court of competent jurisdiction, or pursuant to any proper order or demand
made by any competent authority or body where they are under a legal or regulatory obligation to make such a disclosure;

 

		(c)	as required pursuant to the rules and regulations of the Securities Act of 1933, as amended, and
the Exchange Act of 1934, as amended,

 

		(d)	as maybe necessary to provide to any third party in the course of their due diligence of either
Party in conjunction with an acquisition of assets, sale of assets, or financing of a Party, and

 

		(e)	as far as necessary to implement and enforce any of the terms of this Agreement.

 

		12.	Governing law and jurisdiction

 

The provisions of this Agreement
shall be construed according to the internal substantive laws of the State of New York without regard to conflict of laws principles.
If any provision of this Agreement is in conflict with any statute or rule of law of the State of New York or is otherwise unenforceable
for any reason whatsoever, then such provision shall be deemed to be restated so that it may be enforced to the fullest extent
permitted by law, and the remainder of this Agreement shall remain in full force and effect.

 

		13.	Counterparts

 

This Agreement may be signed
in any number of counterparts, each of which, when signed, shall be an original and all of which together evidence the same agreement.

 

		14.	Variation

 

Any variation of this Agreement
shall be in writing and signed by or on behalf of each Party.

 

This Agreement has been entered into on
the date stated first above written.

 

	XG TECHNOLOGY, INC.	 	INTEGRATED MICROWAVE TECHNOLOGIES, LLC
	 	 	 
	 	 	 
	By:	 	 	By:	 
	 	 	 	 	 
	Name:	 	 	Name:	 
	 	 	 	 	 
	Title:	 	 	Title:	 
	 	 	 	 	 
	Date:	 	 	Date:	 

 

	 	 	Page 5
	 	CONFIDENTIAL AND RESTRICTEDExhibit
10.2

 

SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”) is dated as of April 12, 2016, between xG Technology,
Inc. (the “Company”) and each purchaser identified on the signature pages
hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell
to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company
as more fully described in this Agreement. 

 

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

 

ARTICLE
I. 

DEFINITIONS

 

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

 

“Agreement”
shall have the meaning ascribed to such term in the preamble hereto.

 

“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. 

 

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

 

“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 2.2.

 

     1

     

    

 

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

 

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

 

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

 

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

 

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

 

“Company”
shall have the meaning ascribed to such term in the preamble hereto.

 

“Company
Counsel” means Robinson Brog Leinwand Greene Genovese & Gluck P.C.

 

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

  

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

 

“DTC”
shall have the meaning ascribed to such term in Section 4.15. 

 

“Effective
Date” means the earliest of the date that (a) all of the Underlying Shares
have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance
with the current public information required under Rule 144 and without volume or manner-of-sale restrictions, or (b) following
the one year anniversary of the Closing Date, provided that a holder of Underlying Shares is not an Affiliate of the Company, all
of the Underlying Shares may be sold pursuant to an exemption from registration under Section 4(1) of the Securities Act without
volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a standing written unqualified opinion
that resales may then be made by such holders of the Underlying Shares pursuant to such exemption which opinion shall be in form
and substance reasonably acceptable to such holders. 

 

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

 

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

 

     2

     

    

 

“Exempt
Issuance” means the issuance of (i) securities issued under the Company’s equity incentive plan existing
on the date of this Agreement and any amendments thereto approved by the Board of Directors, including securities issuable upon
conversion or exercise of such securities, (ii) securities issued for consideration other than cash pursuant to a strategic arrangement,
joint venture, merger, consolidation, acquisition, or similar business combination approved by the Board of Directors but shall
not include a transaction in which the Company is issuing securities for the purpose of raising capital or to an entity whose primary
business is investing in securities and (iii) securities issued 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.

 

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

 

“Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1(ii).

 

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

 

“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.

 

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

 

“Irrevocable
Transfer Agent Instructions” shall have the meaning ascribed to such term in Section 4.15. 

 

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

 

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

 

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

 

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

 

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

 

     3

     

    

 

“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(mm). 

 

“Note”
means the 5% Senior Secured Convertible Promissory Note due, subject to the terms therein, at the earlier of (i) January 12, 2017,
or (ii) the closing of a Public Offering, as defined therein, issued by the Company to the Purchasers hereunder, in the form of
Exhibit A attached hereto. 

 

“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. 

  

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

 

“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”
shall have the meaning ascribed to such term in the preamble hereto.

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.9. 

 

“Registration Rights
Agreement” means the Registration Rights Agreement, dated the date hereof, among the Company and the Purchasers, in the
form of Exhibit B attached hereto.

 

“Registration Statement”
means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale
of the Underlying Shares by each Purchaser as provided for in the Registration Rights Agreement.

 

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

 

“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon conversion in full of all Notes
(including Underlying Shares issuable as payment of interest on the Notes), 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.

 

     4

     

    

 

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

 

“Securities”
means the Notes 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 on or about the date hereof by and among the Company and the Purchasers as hereinafter amended
and/or supplemented altogether with all exhibits, schedules and annexes to such Security Agreement, pursuant to which all Indebtedness
of the Company to the Purchaser under the Transaction Documents including, but not limited to, the Notes are secured by the Collateral,
as defined in the Security Agreement, which security interest in the Collateral shall be perfected by the Purchasers’ UCC-1,
filed with the Secretary of State of the State of Delaware, to the extent perfectable by the filing of a UCC 1 Financing Statement
and such other documents and instruments related thereto, in the form of Exhibit C
attached hereto.

 

“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act. 

 

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

 

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

 

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

 

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

  

“Transaction
Documents” means this Agreement, the Notes, the Security Agreement, the Registration Rights 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 Continental Stock Transfer & Trust, the current transfer agent of the Company, with a mailing address
of 17 Battery Place, 8th Floor, New York, NY 10004 and a phone number of (212) 845-3285, and any successor transfer agent of the
Company. 

  

     5

     

    

 

“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Notes and issued and
issuable in lieu of the cash payment of interest on the Notes in accordance with the terms of the Notes. 

 

ARTICLE
II. 

PURCHASE
AND SALE 

 

2.1
  Purchase.  The Purchasers will purchase an aggregate of $500,000 in Subscription Amount of Notes.

 

2.2
  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 each Purchaser,
severally and not jointly, agrees to purchase, such Purchaser’s Closing Subscription Amount as set forth on the signature
page hereto executed by such Purchaser (an aggregate of $500,000 in Subscription Amount of Notes).  At the Closing, each
Purchaser shall deliver to the Company, via wire transfer or a certified check, immediately available funds equal to such Purchaser’s
Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the Company shall deliver to each
Purchaser its respective Note, as determined pursuant to Section 2.3(a), and the Company and each Purchaser shall deliver the other
items set forth in Section 2.3 deliverable at the Closing.  Upon satisfaction of the covenants and conditions set forth
in Sections 2.3 and 2.4 for the Closing, the Closing shall occur at the offices of the Purchaser’s counsel or such other
location as the parties shall mutually agree.

 

2.3
  Deliveries.

 

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

 

(i)  
this Agreement duly executed by the Company; 

 

(ii)
 a Note with a principal amount equal to such Purchaser’s Principal Amount, registered in the name of such Purchaser;

 

(iii)
the Registration Rights Agreement duly executed by the Company; and 

 

(iv)
the Security Agreement duly executed by the Company.

 

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

 

(i)
 this Agreement duly executed by such Purchaser; 

 

     6

     

    

 

(ii)
such Purchaser’s Subscription Amount (less, in the case of any particular Purchaser, the amount withheld pursuant to Section
5.2) by wire transfer to the account specified in writing by the Company; 

 

(iii)
the Registration Rights Agreement duly executed by the Company; and

 

(iv)
the Security Agreement duly executed by such Purchaser.

 

2.4
  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 (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect, which are accurate in all respects) of each Purchaser
contained herein (except for representations and warranties that speak as of a specific date which shall be true and correct as
of such specified date);

 

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

 

(iii)
 the delivery by each Purchaser of the items set forth in Section 2.3(b) of this Agreement.

 

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

 

(i)
  the accuracy in all material respects when made and on the Closing Date of the representations and warranties (except for
those representations and warranties that are qualified by materiality or Material Adverse Effect, which are accurate in all respects)
of the Company contained herein (except for representations and warranties that speak as of a specific date which shall be true
and correct as of such specified date);

 

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

 

(iii)
 the delivery by the Company of the items set forth in Section 2.3(a) of this Agreement;

 

(iv)
  there is no existing Event of Default (as defined in the Notes) and no existing event which, with the passage of time or
the giving of notice, would constitute an Event of Default;

 

     7

     

    

 

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

  

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

 

ARTICLE
III. 

REPRESENTATIONS
AND WARRANTIES 

 

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

 

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

 

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

 

     8

     

    

 

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

 

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

 

     9

     

    

  

(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 4.13 of this Agreement, (ii) the notice and/or application(s) to each
applicable Trading Market for the issuance and sale of the Securities and the listing of the Conversion 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 will reserve from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying
Shares at least equal to 100% of the Required Minimum on the date hereof, which amount shall automatically increase to 300%
immediately after the Company’s next annual meeting of stockholders .

 

(g)
  Capitalization.  The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule
3.1(g) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company
as of the date hereof. Except as set forth on Schedule 3.1(g), the Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the
most recently filed periodic report under the Exchange Act. Except as a result of the purchase and sale of the Securities
and as set forth in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for,
or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common
Stock Equivalents.  Except as set forth on Schedule 3.1(g), the issuance and
sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than
the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange
or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are 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 of capital stock 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.

 

     10

     

    

 

(h)
  SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and
other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law
or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference
therein, 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 financial statements of the Company included in the SEC Reports comply
in all material respects with applicable or accounting requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

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

 

     11

     

    

 

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

 

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

 

     12

     

    

 

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

  

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

 

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

 

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

 

     13

     

    

 

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

 

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

 

     14

     

    

 

(r)
  Certain Fees.  Other than as set forth on Schedule 3.1(r), no brokerage or finder’s fees or
commissions are or will be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.  The
Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction
Documents.

  

(s)
  Private Placement.  Assuming the accuracy of the Purchasers’ representations and warranties set forth
in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to
the Purchasers as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations
of the Trading Market.

 

(t)
  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.

 

(u)
  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 or any Subsidiaries.

 

(v)
  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.  Except as set forth in the SEC Reports, the Company has not,
in the twelve (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. 

 

     15

     

    

 

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

 

(x)
  Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of
the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public
information.  The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting
transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Purchasers
regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the
Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they
were made, not misleading.   The 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.

 

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

 

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

 

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

 

     16

     

    

 

(bb)
  Accountants.  The Company’s accounting firm is set forth on Schedule 3.1(bb) 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, 2015. 

 

(cc)
  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.

 

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

  

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

 

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

 

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

 

(hh)
  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.

 

(ii)
  Bank Holding Company Act.  Neither the Company nor any of its Subsidiaries or Affiliates is subject to
the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of
the Federal Reserve System (the “Federal Reserve”).  Neither the Company nor any of its Subsidiaries
or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting
securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve.  Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal
Reserve.

 

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

 

(kk) Seniority. Except
as set forth on Schedule 3.1(kk), as of the Closing Date, no Indebtedness or other claim against the Company is senior to
the Notes 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).

 

     18

     

    

 

(ll)     Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere
herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.12 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) each Purchaser shall not
be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction.
The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities
at various times during the period that the Securities are outstanding, including, without limitation, during the periods that
the value of the 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.

 

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

 

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

 

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

 

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

 

(c)
  Purchaser Status.  At the time such Purchaser was offered the Securities, it was, and as of the date hereof
it is, and on each date on which it converts any Notes it will be 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 Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks
of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment.  Such
Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete
loss of such investment.

 

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

 

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(f)
  Certain Transactions and Confidentiality.  Other than consummating the transactions contemplated hereunder,
such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such
Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing
as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing
the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution
hereof.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets,
the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that
made the investment decision to purchase the Securities covered by this Agreement.  Other than to other Persons party
to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability
of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

 

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

 

ARTICLE
IV. 

OTHER
AGREEMENTS OF THE PARTIES 

 

4.1
  Transfer Restrictions.

 

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

 

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

 

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[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [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 AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS
SECURITY [AND THE SECURITIES ISSUABLE UPON [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 

 

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

 

(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; or (iii) if such legend is not required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The
Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after any of the events described in (i)-(iii)
in the preceding sentence if required by the Transfer Agent to effect the removal of the legend hereunder (with a copy to the applicable
Purchaser and its broker). If all or any portion of a Note is converted at a time when there
is an effective registration statement to cover the resale of the Underlying Shares, or if such Underlying Shares may be sold under
Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission) then such Underlying Shares shall be issued free of all legends.  The
Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c),
it will, no later than two (2) Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate
representing Underlying Shares, as applicable, issued with a restrictive legend (such third (3rd) 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 such Purchaser.

 

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(d)
  In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading Day after the Legend Removal Date until such certificate
is delivered without a legend.  Nothing herein shall limit such Purchaser’s right to pursue actual damages for
the Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents, and such
Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief.

 

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
any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the
Company.

 

4.3
  Reporting Status; 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.

 

     23

     

    

 

(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 shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) (a “Public Information Failure”), and during the period that such Public Information
Failure exists the Purchaser has requested that the Company remove any restrictive legend from the Securities which the Company
is unable to do due to such Public Information Failure, then, in addition to such Purchaser’s other available remedies, the
Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or
reduction of its ability to sell the Securities, an amount in cash equal to two percent (2%) of the aggregate Subscription Amount
of such Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth (30th) day (prorated for
periods totaling less than thirty (30) days) thereafter until the earlier of (a) the date such Public Information Failure is cured
and (b) such time that such public information is no longer required  for the Purchasers to transfer the Underlying Shares
pursuant to Rule 144.  The payments to which a 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 1.5% per month (prorated for partial months) until paid in full. Nothing
herein shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser
shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief. 

 

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. 

 

4.5
       Conversion and Exercise Procedures.  The form of Notice of Conversion included in the Notes sets forth
the totality of the procedures required of the Purchasers in order to convert the Notes.  Without limiting the preceding
sentences, no ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Conversion form be required in order to convert the Note.  No additional legal opinion,
other information or instructions shall be required of the Purchasers to convert their Notes.  The Company shall honor
conversions of the Notes and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth
in the Transaction Documents.

 

4.6
       Shareholder Rights Plan.  No claim will be made or enforced by the Company or, with the consent of
the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in
effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company
and the Purchasers.

 

4.7
       Non-Public Information.  Except with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its
behalf, will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Purchaser shall have entered into a written agreement with the Company regarding
the confidentiality and use of such information.  The Company understands and confirms that each Purchaser shall be relying
on the foregoing covenant in effecting transactions in securities of the Company.

 

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4.8
       Use of Proceeds.  The Company will use the proceeds from the sale of the Securities for general corporate
purposes, but not, directly or indirectly, for (i) the satisfaction of any indebtedness of the Company or any of its Subsidiaries
(other than payment of trade payables in the ordinary course of business), (ii) the redemption or repurchase of any securities
of the Company or any of its Subsidiaries or (iii) the settlement of any outstanding litigation.

 

4.9
       Indemnification of Purchasers.   

 

(a)
Subject to the provisions of this Section 4.9, the Company will indemnify and hold each Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding
such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members,
partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from
any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party
may suffer or incur as a result of or relating to (a) any breach by the Company of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is
not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such  Purchaser
Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful
misconduct or malfeasance).  If any action shall be brought against any Purchaser Party in respect of which indemnity
may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall
have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any
Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.  The Company
will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the
extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents.  

 

     25

     

    

 

(b)        The
indemnification required by this Section 4.9 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.

 

(c)        The
indemnity agreement contained herein shall be in addition to (i) any cause of action or similar right of any Purchaser Party against
the Company or others, and (ii) any liabilities the Company may be subject to pursuant to the law.

 

4.10       Reservation
and Listing of Securities.

 

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

 

(b)
  If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than 100%
of 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 100%
of the Required Minimum at such time, as soon as possible and in any event not later than the 60th day after such date,
which amount shall automatically increase to 300% immediately after the Company’s next annual meeting of stockholders.

 

(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.

 

4.11
     Equal Treatment of Purchasers.  No consideration (including any modification of any Transaction Document)
shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless
the same consideration is also offered to all of the parties to this Agreement. Further, the Company shall not make any payment
of principal or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on
the Notes at any applicable time.  For clarification purposes, this provision constitutes a separate right granted to
each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers
as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

 

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4.12
    Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any Short Sales,
of any of the Company’s securities during the period commencing with the execution of this Agreement and ending on the later
of (i) the Maturity Date or (ii) the date that the Notes are no longer outstanding (provided that this provision shall not prohibit
any sales made where a corresponding Notice of Conversion is tendered to the Company and the shares received upon such conversion
or exercise are used to close out such sale). 

 

4.13
     Securities Laws Disclosure; Publicity. The Company shall 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
Current Report on Form 8-K, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public
information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company and the
Purchaser shall consult with each other in issuing any 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 any registration statement
contemplated by this Agreement and (b) to the extent such disclosure is required by law or Trading Market regulations, in which
case the Company shall provide the Purchaser with prior notice of such disclosure permitted under this clause (b).

 

4.14      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 Purchaser 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.

 

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4.15   Transfer Agent Instructions.
The Company shall issue irrevocable instructions to the Transfer Agent in the form previously provided to the Company (the “Irrevocable
Transfer Agent Instructions”) to issue certificates or credit shares to the applicable balance accounts at Depository
Trust Company (“DTC”), as applicable, registered in the name of each Purchaser or its respective nominee(s),
for the Conversion Shares in such amounts as specified from time to time by each Purchaser to the Company upon conversion of any
Note. The Company shall deliver to each Purchaser a copy of the Irrevocable Transfer Agent Instructions with the executed acknowledgement
of the Transfer Agent within thirty (30) calendar days of the date hereof. The Company represents and warrants that no instruction
other than the Irrevocable Transfer Agent Instructions referred to in this Section 4.15 will be given by the Company to the Transfer
Agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of
the Company. If a Purchaser effects a sale, assignment or transfer of Securities, the Company shall permit the transfer and shall
promptly instruct the 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 such Purchaser to effect such sale, transfer or assignment. The Company
acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to each Purchaser. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this Section 4.15 will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this Section 4.15, that each 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 the Company Counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Transfer
Agent to the extent required or requested by the Transfer Agent. Any fees (with respect to the Transfer Agent, counsel to the Company
or otherwise) associated with the issuance of such opinion shall be borne by the Company.

 

ARTICLE
V. 

MISCELLANEOUS

 

5.1
  Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder
only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the
other parties, if the Closing has not been consummated on or before April 11, 2016; 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 deliver to each Purchaser, prior to the Closing, a completed and executed copy
of the Closing Statement. Except as provided in this Section 5.2 and as otherwise 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, stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchasers.

 

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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: (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto at
or prior to 12:00 p.m. (New York City time) on a Trading Day; (ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on
a day that is not a Trading Day or later than 12:00 p.m. (New York City time) on any Trading Day; (iii) the second (2nd) Trading
Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service; or (iv) 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.

 

5.5
  Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except
in a written instrument signed by the Company and the Purchasers.  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.

 

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

 

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

 

5.8
  No Third-Party Beneficiaries.  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 4.9.

 

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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 suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, 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 suit, 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 either party shall commence an action, suit or proceeding to enforce
any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.9, the prevailing
party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

5.10
  Survival.  The representations and warranties contained herein shall survive the Closing and the delivery
of the Securities. Each Purchaser shall be responsible only for its own representations, warranties, agreements and covenants hereunder.

 

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

 

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

 

     30

     

    

 

5.13
  Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting
any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or
option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein
provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company,
any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however,
that in the case of a rescission of a conversion of a Note, the applicable Purchaser shall be required to return any shares of
Common Stock subject to any such rescinded conversion notice concurrently with the return to such Purchaser of the aggregate exercise
price paid to the Company for such shares of Common Stock.

 

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

 

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

 

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

 

     31

     

    

 

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 claim or Proceeding that may be brought by any
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 such 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 such Purchaser’s
election.

 

5.18
  Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under
any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible
in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing
contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be
deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its
rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and
it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.  Each
Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents.

 

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.

 

     32

     

    

 

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]

 

     33

     

    

 

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

 

	
         

        xG TECHNOLOGY, Inc.
        

         

         
	 	
        Address for Notice:
        

         

        xG Technology, Inc. 

        240 S. Pineapple Avenue,
        Suite 701

        Sarasota, FL 34236

 

	By:	 	 	Fax: (941) 954-8595
	 	
        Name: Roger G.
Branton 
	 	 
	 	
        Title: Chief
Financial Officer 
	 	 

 

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

 

Robinson Brog Leinwand
Greene Genovese & Gluck, P.C.

875 Third Avenue, 9th
Floor

New York, NY 10022

Attn: David E. Danovitch

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK 

SIGNATURE
PAGE FOR PURCHASER FOLLOWS] 

 

     34

     

    

 

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 

 

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

 

Name of Purchaser:

 

Signature of Authorized
Signatory of Purchaser: ____________________________________

 

Name of Authorized Signatory:
____________________________________

 

Title of Authorized Signatory: ____________________________________

 

Email Address of Authorized
Signatory: ____________________________________

 

Facsimile Number of Authorized
Signatory: ____________________________________

 

Address for Notice to
Purchaser:

 

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

 

Closing Principal Amount:

  

Closing Subscription Amount:

 

EIN Number: _______________________

 

    	 	 	 

     

    

 

 

Schedule 3.1(a) – Subsidiaries

 

None. 

 

Schedule 3.1(g) – Capitalization

 

Schedule 3.1(i) – Material Changes;
Undisclosed Events, Liabilities or Developments

 

Schedule 3.1(j) – Litigation

 

None.

 

Schedule 3.1(r) – Certain Fees

 

None.

 

Schedule 3.1(bb) – Accountants

 

Marcum LLP 

 

Schedule 3.1(kk) – Seniority

 

None.

 

    	 	 	 

     

    

 

Annex A 

 

CLOSING STATEMENT

 

    	 	 	 

     

    

 

Exhibit A

 

Form of 5% Senior Secured Convertible
Promissory Note

 

    	 	 	 

     

    

 

Exhibit B

 

Form of Registration Rights Agreement

 

    	 	 	 

     

    

 

Exhibit C

 

Form of Security Agreement

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