Document:

Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

Units comprised of Secured Convertible
Notes and Warrants

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of April 8, 2012, between BOLDFACE Group, Inc., a Nevada corporation
(the “Company”), and each purchaser identified on the Omnibus 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 Rule 506 under Section 4(2) and/or Regulation S under the
Securities Act, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires
to purchase from the Company, securities of the Company as more fully described in this Agreement.

 

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

 

ARTICLE I.

DEFINITIONS

 

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

 

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.6.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Company Counsel”
means Gottbetter & Partners, LLP, with offices located at 488 Madison Avenue, 12th Floor, New York, NY 10022.

 

“Conversion
Shares” means the shares of Common Stock to be issued upon conversion of the Notes in accordance with the terms of the
Notes.

 

“Disclosure
Materials” means any private placement memorandum or similar document prepared or authorized by the Company and delivered
to the Purchaser in connection with the transactions contemplated by this Agreement, and any supplement or amendment thereto, the
Schedules and any other written information prepared or authorized by the Company and delivered to the Purchaser prior to the Purchaser’s
execution of this Agreement, and any such document delivered to the Purchaser after the Purchaser’s execution of this Agreement
and acknowledged in writing by the Purchaser prior to the Closing of the Purchaser’s subscription hereunder, excluding, in
each case, the SEC Reports.

 

“Effective
Date” means the earliest of the date that (a) the initial Registration Statement has been declared effective by the Commission,
(b) all of the Registrable Securities have been publicly sold or may be sold immediately without registration under the Securities
Act either pursuant to Rule 144 of the Securities Act or otherwise or (c) following the one year anniversary of the final Closing
Date provided that a holder of Registrable Securities is not an Affiliate of the Company, all of the Registrable Securities may
be sold pursuant to an exemption from registration under Section 4(1) of the Securities Act.

 

“Environmental
Laws” shall have the meaning ascribed to such term in Section 3.1(dd).

 

“Escrow Agent”
means CSC Trust Company of Delaware, with offices located at 2711 Centerville Road, One Little Falls Centre, Wilmington, DE 19808,
and a facsimile number of (302) 636-8666.

 

“Escrow Agreement”
means the amendment to the escrow agreement, in the form attached hereto as Exhibit G, entered on or prior to the date hereof,
by and among the Company, the Escrow Agent and Gottbetter Capital Markets, LLC pursuant to which the Purchasers shall deposit Subscription
Amounts with the Escrow Agent to be applied to the transactions contemplated hereunder.

 

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

 

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

 

“Exempt Issuance”
means the issuance of (a) shares of Common Stock or options under the Company’s 2012 Equity Incentive Plan or to employees,
officers, directors or consultants of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority
of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established
for such purpose, (b) securities upon the conversion, 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, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Company, (d) shares of Common Stock or options issued pursuant to Form S-8 or (e) securities issued
pursuant to Form S-4.

 

“Fundamental
Transaction” shall have the meaning ascribed to such term in the Warrants.

 

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

 

“G&P”
means Gottbetter & Partners, LLP with offices located at 488 Madison Avenue, 12th Floor, New York, NY 10022.

 

“Guaranties”
means each of the Guaranties substantially in the form of Exhibit A attached hereto executed by each of the Company’s
Subsidiaries (as defined below) in favor of each Purchaser, pursuant to which each of them guarantees the obligations of the Company
under the Transaction Documents (as defined below).

 

“Hazardous
Materials” shall have the meaning ascribed to such term in Section 3.1(dd).

 

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

 

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

 

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

 

“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).

 

“Notes”
means 12% secured convertible notes of the Company, with an original issue discount of 0.2% (or $400), substantially in the form
of Exhibit B attached hereto, which will be secured by a perfected security interest in all of the assets of the Company
and its Subsidiaries (as defined below), and will be guaranteed each of the Company’s Subsidiaries.

 

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“Permitted
Liens” means a (i) first priority security interest in all rights, title and interests of the Company and its Subsidiaries
granted to Star Funding, Inc. under the Factoring Agreement, dated as of October 17, 2012, the Supply Agreement, dated as of October
17, 2012, and related agreements, (ii) equipment lease financing created by the Company or any Subsidiary in the ordinary course
of business after the date hereof, where the sole collateral for such financing is the equipment so leased, and (iii) any factoring
arrangements entered into by the Company and/or any of its Subsidiaries with a third-party factor.

 

“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, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Purchase
Price” equals Two Hundred Thousand ($200,000.00) U.S. Dollars per Unit.

 

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

 

“Purchaser
Warrants” means, collectively, warrants registered in the name of and delivered to the Purchaser at the Closing in accordance
with Section 2.2(a) hereof, consisting of (i) a five-year warrant substantially in the form of Exhibit C-1 attached hereto,
to purchase 400,000 shares of Common Stock, with an exercise price equal to $0.25 per share (the “First Warrant”),
and (ii) a five-year warrant substantially in the form of Exhibit C-2 attached hereto, to purchase 400,000 shares of Common
Stock, with an exercise price equal to $0.50 per share (the “Second Warrant”), subject to adjustment as provided
therein.

 

“Registrable
Securities” shall have the meaning ascribed to such term in the Registration Rights Agreement.

 

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

 

“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale by the Purchasers of the Conversion Shares and the Warrant Shares.

 

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

 

“Required
Delivery Date” shall have the meaning ascribed to such term in Section 4.3(c).

 

“Right of
First Refusal” shall have the meaning set forth in Section 4.19.

 

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

 

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

 

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

 

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

 

“Securities”
means the Units, the Notes, the Conversion Shares, the Warrants and the Warrant Shares.

 

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

 

“Security
Agreement” means the Security Agreement substantially in the form of Exhibit D attached hereto, between the Company
and each of its Subsidiaries on the one hand and each of the Purchasers on the other hand.

 

“Security
Documents” means the Security Agreement and the other security documents and agreements entered into in connection with
this Agreement and each of such other documents and agreements.

 

“Short Sales”
means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (and
shall be deemed to include the location and/or reservation of borrowable shares of Common Stock). 

 

“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Notes and Warrants purchased hereunder as specified
below such Purchaser’s name on the Omnibus Signature Page of this Agreement and above the heading “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 AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange
or the OTC Bulletin Board (or any successors to any of the foregoing).

 

“Transaction
Documents” means this Agreement, the Notes, the Warrants, the Registration Rights Agreement, the Security Documents,
the Guaranties, the Escrow Agreement, all exhibits and schedules hereto and thereto and any other documents or agreements executed
in connection with the transactions contemplated hereunder.

 

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“Transfer
Agent” means VStock Transfer, LLC, the current transfer for the Company’s Common Stock, with a mailing address
of 77 Spruce Street, Suite 201, Cedarhurst, New York, 11516, and a facsimile number of (646) 536-3179, and any successor transfer
agent of the Company.

 

“Units”
mean the Company’s units, with each unit consisting of: (i) a Note in denomination of Two Hundred Thousand Dollars ($200,000),
which will be convertible into shares of the Company’s Common Stock and (ii) the Purchaser Warrants.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:00 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the principal amount of Notes then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.

 

“Warrants”
means, collectively, all of the Purchaser Warrants issued to the Purchasers.

 

“Warrant Shares”
means the shares of Common Stock issuable upon exercise of the Warrants.

 

ARTICLE II.

PURCHASE
AND SALE

 

2.1Closing.

 

(a)On a Closing
Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of
this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase,
up to a maximum of twenty five (25) Units at the Purchase Price per Unit (the “Maximum Amount”). Each Purchaser shall
deliver to the Escrow Agent, via wire transfer or a certified check, immediately available funds equal to such Purchaser’s
Subscription Amount as set forth on the Omnibus Signature Page hereto executed by such Purchaser, and the Company shall deliver
to each Purchaser its respective Note and Warrants, as determined pursuant to Section 2.2(a), and the Company and each Purchaser
shall deliver the other items set forth in Section 2.2 deliverable at the Closing. The Company may accept any Purchaser’s
subscription for a fraction of a Unit at any Closing. Each Note carries an original issue discount of 0.2% (or $400) (the “OID”),
which will be used to pay for the acquisition of shares of Common Stock by the Purchaser from certain stockholder(s) of the Company.

 

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(b)The initial
Closing shall take place upon the satisfaction of the covenants and conditions to the Closing set forth in Section 2.2 and 2.3
and on such date and time as is mutually agreed to by the Company and the Purchaser(s). Upon satisfaction of such covenants and
conditions, the Closing shall occur at the offices of Gottbetter & Partners, LLP, 488 Madison Avenue, 12th Floor,
New York, New York 10022 (or such other place as is mutually agreed to by the Company and the Purchaser(s)). There may be multiple
Closings, subject to prior termination, until such time as subscriptions for the Maximum Amount are accepted by the Company. The
Units may be offered and sold through May 31, 2013, unless such offering period is mutually extended in writing by the Company
and Gottbetter Capital Markets, LLC.

 

2.2Deliveries.

 

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

 

(i)this
Agreement duly executed by the Company;

 

(ii)a legal opinion of Company
Counsel, dated as of the initial Closing Date, in the form and substance to be agreed to by the parties;

 

(iii)a
certificate evidencing the formation and good standing of the Company and each of its Subsidiaries in each such entity’s
jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of incorporation or formation
as of a date within twenty (20) days of the Closing Date;

 

(iv)a
certificate executed by the Secretary of the Company and dated as of the Closing Date, certifying the resolutions adopted by its
board of directors (i) approving and authorizing the execution and delivery of this Agreement and the other Transaction Documents
by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, (ii) certifying the current
versions of its Amended and Restated Articles of Incorporation and By-laws, each as in effect at the Closing, and (iii) certifying
as to the signatures and authority of persons signing this Agreement and the other Transaction Documents by the Company. The foregoing
certificate shall only be required to be delivered on the first Closing Date, unless any information contained in the certificate
has changed;

 

(v)a
certificate executed by the Secretary of each Subsidiary and dated as of the Closing Date, certifying the resolutions adopted by
its board of directors (i) approving and authorizing the execution and delivery of the applicable Transaction Documents by the
Subsidiary and the consummation by the Subsidiary of the transactions contemplated under such agreements, (ii) certifying the current
versions of its Articles of Incorporation and By-laws, each as in effect at the Closing, and (iii) certifying as to the signatures
and authority of persons signing the applicable Transaction Documents by the Subsidiary. The foregoing certificate shall only be
required to be delivered on the first Closing Date, unless any information contained in the certificate has changed;

 

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(vi)a
Note, duly executed on behalf of the Company, registered in the name of such Purchaser, in a principal amount equal to such Purchaser’s
Subscription Amount (or such Note certificate may be delivered within five (5) Trading Days after the final Closing Date if agreed
to by the Purchaser and the Company);

 

(vii)a
First Warrant, duly executed on behalf of the Company, registered in the name of such Purchaser to purchase up to a number of shares
of Common Stock equal to fifty percent (50%) of the number of shares of Common Stock into which such Purchaser’s Notes are
initially convertible (or such Warrant certificate may be delivered within five (5) Trading Days after the final Closing Date if
agreed to by the Purchaser and the Company);

 

(viii)a
Second Warrant, duly executed on behalf of the Company, registered in the name of such Purchaser to purchase up to a number of
shares of Common Stock equal to fifty percent (50%) of the number of shares of Common Stock into which such Purchaser’s Notes
are initially convertible (or such Warrant certificate may be delivered within five (5) Trading Days after the final Closing Date
if agreed to by the Purchaser and the Company);

 

(ix)the
Registration Rights Agreement duly executed by the Company;

 

(x)a
Guaranty, duly executed on behalf of each Subsidiary of the Company;

 

(xi)the Security Agreement,
duly executed on behalf of the Company and each Subsidiary of the Company;

 

(xii)the Escrow Agreement
duly executed by the Company, the Escrow Agent and Gottbetter Capital Markets, LLC;

 

(xiii)in
accordance with the terms of the Security Documents, appropriate financing statements on Form UCC-1 for the Company and each Subsidiary
to be duly filed with the Secretary of State of Nevada, Secretary of State of California and Los Angeles County, CA; and

 

(xiv)such
other documents relating to the transactions contemplated by this Agreement as such Purchaser or its counsel may reasonably request.

 

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

 

(i)the
Omnibus Signature Page to this Agreement duly executed by such Purchaser;

 

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(ii)to
the Escrow Agent, such Purchaser’s Subscription Amount by wire transfer, in same-day funds, to the account specified in the
Escrow Agreement or by certified or bank check, in United States Dollars, in immediately available funds;

 

(iii)completed and executed
Accredited Investor Certification, Investor Profile and Anti-Money Laundering Information Form, in the form attached to this Agreement;

 

(iv)an
executed subordination agreement with Star Funding, Inc. in the form and substance satisfactory to Gottbetter Capital Markets,
LLC and the Company, unless such requirement is waived by the Company and Gottbetter Capital Markets, LLC; and

 

(v)such
other documents relating to the transactions contemplated by this Agreement as the Company or its counsel may request.

 

2.3Closing
Conditions. 

 

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

 

(i)funds
have been deposited in escrow as described in Section 2.2(b)(ii) and corresponding documentation with respect to such amounts has
been delivered by the Purchasers as described in Section 2.2(b);

 

(ii)the
accuracy in all material respects on the Closing Date of the representations and warranties of the Purchasers contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);

 

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

 

(iv)the
delivery by each Purchaser of the items set forth in Section 2.2(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
representations and warranties of the Company contained in this Agreement (when read without regard to any qualification as to
materiality or Material Adverse Effect contained therein) shall be true and correct as of the date of this Agreement and as of
the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date
(except for representations and warranties that speak as of a specific date), except for any untrue or incorrect representation
and warranty that, individually or in the aggregate, does not have a Material Adverse Effect, and the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to the Closing Date;

 

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

 

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

 

(iv)the
Company shall have received the consent of Star Funding, Inc. with respect to the transactions contemplated under the Transaction
Documents, satisfactory to Gottbetter Capital Markets, LLC.

 

ARTICLE III.

REPRESENTATIONS
AND WARRANTIES

 

3.1Representations
and Warranties of the Company. Except as set forth in the Company’s SEC Reports
and the schedules referred to in this Section 3.1 (collectively with the other Schedules to this Agreement, the “Schedules”),
which Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein, the Company hereby
makes the following representations and warranties to each Purchaser as of the Closing Date (unless as of a specific date therein
in which case as of such date):

 

(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, 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 or business (as currently conducted)
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.

 

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(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 each of this Agreement and 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 and signed by the Purchasers hereto and the parties thereto, 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.
Except as set forth on Schedule 3(d), 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 and the rules and regulations of the applicable Trading Market), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably
be expected to result in a Material Adverse Effect.

 

(e)Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission pursuant to the Registration
Rights Agreement, (iii) consents set forth on Schedule 3.1(e) and (iv) 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”).

 

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(f)Issuance
of the Securities. The Notes and the Warrants have been 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 other
than as may have been imposed by the Purchaser and other than restrictions on transfer provided for in the Transaction Documents.
The Conversion Shares and the Warrant Shares have been duly authorized and, 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 other than as may have been imposed
by the Purchaser and other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved from
its duly authorized capital stock 100% of the maximum number of shares of Common Stock issuable pursuant to the Notes and the Warrants
(without taking into account any limitations on the conversion of the Notes or exercise of the Warrants set forth therein).

 

(g)Capitalization.
The authorized and outstanding capitalization of the Company is 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 as indicated in Schedule 3.1(g) and pursuant to the exercise of awards under the Company’s equity compensation
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. To the Company’s knowledge, except as disclosed in Schedule 3.1(g), no Person owns 10% or
more of the Company’s issued and outstanding shares of Common Stock (calculated based on the assumption that all Common Stock
Equivalents, whether or not presently exercisable or convertible, have been fully exercised or converted (as the case
may be) taking account of any limitations on exercise or conversion (including “blockers”) contained therein without
conceding that such identified Person is a 10% stockholder for purposes of federal securities laws). Other than as indicated in
Schedule 3.1(g), no Person has any right of first refusal, preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the
Securities, as set forth in the SEC Reports and as set forth in Schedule 3.1(g), 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. Other than as set forth in the warrants listed in 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. Except as set forth in the Company’s SEC Reports and other
than as indicated in Schedule 3.1(g), there are no outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by
which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries.
Other than as indicated in Schedule 3.1(g), neither the Company nor any Subsidiary has any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock
of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights
to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the 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.

 

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(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”) and, other than a report that is required solely pursuant to Item 1.01, 1.02,
2.03, 2.04, 2.05, 2.06, 4.02(a) or 5.02(e) of Form 8-K, has filed such 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 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 set forth in Schedule 3.1(i) and as specifically disclosed in a subsequent SEC Report
filed prior to the date hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made
with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company equity compensation plans. The Company does not have pending before the Commission
any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement
or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists,
or is reasonably expected to occur or exist, with respect to the Company or its 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.

 

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(j)Litigation.
Except as set forth in the Company’s SEC Reports and Schedule 3.1(j), there is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company,
any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency
or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely
affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the 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.

 

(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.

 

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(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. Except as described in the SEC Reports and Schedule 3.1(o), 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. Except as described in the SEC
Reports and Schedule 3.1(o), 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.

 

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(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 $100,000 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 equity compensation agreements under any equity
compensation plan of the Company.

 

(q)Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except as disclosed in its SEC
Reports, 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. Except as disclosed in its SEC Reports, the Company and the Subsidiaries have established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries
and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the
reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified
in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure
controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic
report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently
filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes
in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries
that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the
Company or its Subsidiaries.

 

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(r)Certain Fees.
No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents except as set forth on Schedule 3.1(r) (the “Placement Agents”) for the offering
contemplated hereby. The Company shall be responsible for the payment of such fees. Other than the Placement Agents, neither the
Company nor any of its Subsidiaries has engaged any placement agent, broker or other agent in connection with the sale of the Securities.

 

(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. Except as disclosed in the SEC Reports and other than each of the Purchasers, 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 Subsidiary.

 

(v)Listing and
Maintenance Requirements. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance requirements.

 

(w)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 Materials 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 are true and correct and do not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the
date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they
were made and when made, not misleading.

 

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(x)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. 

 

(y)Off Balance
Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries
and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its SEC Reports and
is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

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

 

(aa)Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all Environmental Laws (as defined below), (ii) have received
all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing
clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.

 

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(bb)Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.

 

(cc)No General
Solicitation. Neither the Company nor any Subsidiary nor any person acting on behalf of the Company has, directly or indirectly,
offered or sold any of the Securities by any form of general solicitation or general advertising (within the meaning of Regulation
D under the Securities Act). 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.

 

(dd)Accountants.
The Company’s independent accounting firm is set forth on Schedule 3.1(dd). 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 June 30,
2013.

 

(ee)No Disagreements
with Accountants and Lawyers. Except as set forth on Schedule 3.1(ee), 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. 

 

(ff) 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 and that no Purchaser is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to the Company’s knowledge, a “beneficial
owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 under the Exchange Act. 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.

 

(gg)Equity Compensation
Plans. Each award granted by the Company under the Company’s equity compensation plan was granted (i) in accordance with
the terms of the Company’s equity compensation plan and (ii) with an exercise price (if applicable) at least equal to the
fair market value of the Common Stock on the date such award would be considered granted under GAAP and applicable law. No award
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, equity compensation awards prior to, or otherwise knowingly coordinate
the grant of such awards 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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(hh)Office of
Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or Affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

 

(ii)Ranking
of Notes. Except as set forth on Schedule 3.1(ii), no Indebtedness of the Company, at the Closing, will be senior to,
or pari passu with, the Notes in right of payment, whether with respect to payment or redemptions, interest, damages, upon
liquidation or dissolution or otherwise.

 

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

 

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

 

(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, or upon conversion or exercise will acquire, 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 pursuant
to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its business.

 

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(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 or exercises any Warrants, it will be: (i) an “accredited investor” as defined in Rule
501 under the Securities Act, (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act or (iii) not a “U.S. Person” as that term is defined in Rule 902(k) of Regulation S. Such Purchaser is not
required to be registered as a broker-dealer under Section 15 of the Exchange Act.

 

(d) Non-U.S.
Person. If such Purchaser is not a person in the United States or a U.S. Person (as defined in Rule 902(k) of Regulation S)
or is not purchasing the Units on behalf of a person in the United States or a U.S. Person:

 

(i) neither
such Purchaser nor any disclosed principal is a U.S. Person nor are they subscribing for the Units for the account of a U.S. Person
or for resale in the United States and such Purchaser confirms that the Units have not been offered to the Purchaser in the United
States and that this Agreement has not been signed in the United States;

 

(ii) such
Purchaser acknowledges that the Units have not been registered under the Securities Act and may not be offered or sold in the United
States or to a U.S. Person unless the securities are registered under the Securities Act and all applicable state securities laws
or an exemption from such registration requirements is available, and further agrees that hedging transactions involving such securities
may not be conducted unless in compliance with the Securities Act;

 

(iii) such
Purchaser and if applicable, the disclosed principal for whom the Purchaser is acting, understands that the Company is the seller
of the Units and underlying securities and that, for purposes of Regulation S, a “distributor” is any underwriter,
dealer or other person who participates pursuant to a contractual arrangement in the distribution of securities sold in reliance
on Regulation S and that an “affiliate” is any partner, officer, director or any person directly or indirectly controlling,
controlled by or under common control with any person in question. Except as otherwise permitted by Regulation S, such Purchaser
and if applicable, the disclosed principal for whom the Purchaser is acting, agrees that it will not, during a one year distribution
compliance period, act as a distributor, either directly or through any affiliate, or sell, transfer, hypothecate or otherwise
convey the Units or underlying securities other than to a non-U.S. Person;

 

(iv) such
Purchaser and if applicable, the disclosed principal for whom the Purchaser is acting, acknowledges and understands that in the
event the Units are offered, sold or otherwise transferred by the Purchaser or if applicable, the disclosed principal for whom
the Purchaser is acting, to a non-U.S Person prior to the expiration of a one year distribution compliance period, the purchaser
or transferee must agree not to resell such securities except in accordance with the provisions of Regulation S, pursuant to registration
under the Securities Act, or pursuant to an available exemption from registration; and must further agree not to engage in hedging
transactions with regard to such securities unless in compliance with the Securities Act; and

 

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(v) neither
such Purchaser nor any disclosed principal will offer, sell or otherwise dispose of the Units or the underlying securities in the
United States or to a U.S. Person unless (A) the Company has consented to such offer, sale or disposition and such offer, sale
or disposition is made in accordance with an exemption from the registration requirements under the Securities Act and the securities
laws of all applicable states of the United States or, (B) the Commission has declared effective a registration statement in respect
of such securities.

 

(e)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. Such Purchaser
understands that an active public market for the Company’s Common Stock may not exist or continue to exist. Such Purchaser,
its advisers, if any, and designated representatives, if any, have received and reviewed information about the Company and have
had an opportunity to discuss the Company’s business, management and financial affairs with its management. Such Purchaser
understands that such discussions, as well as any written information provided by the Company, were intended to describe the aspects
of the Company’s business and prospects which the Company believes to be material, but were not necessarily a thorough or
exhaustive description, and except as expressly set forth in this Agreement, the Company makes no representation or warranty with
respect to the completeness of such information and makes no representation or warranty of any kind with respect to any information
provided by any entity other than the Company. Some of such information may include projections as to the future performance of
the Company, which projections may not be realized, may be based on assumptions which may not be correct and may be subject to
numerous factors beyond the Company’s control. Additionally, such Purchaser understands and represents that such Purchaser
is purchasing the Securities notwithstanding the fact that the Company may disclose in the future certain material information
the Subscriber has not received, including its financial results for its current fiscal quarter.

 

(f)Buyer Relationship
with Brokers. Such Purchaser’s substantive relationship with any broker for the transactions contemplated hereby or subagent
thereof (collectively, “brokers”) through which the Purchaser is subscribing for the Securities predates such brokers’
contact with the Purchaser regarding an investment in the Securities.

 

(g)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. Further, such Purchaser was not solicited by, and did not become
aware of the Securities being purchased hereunder as a result of, the identification in the SEC Reports of any broker for the transactions
contemplated hereby.

 

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(h)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.

 

(i)Anti-Terrorism.
Such Purchaser represents that neither it nor, to its knowledge, any person or entity controlling, controlled by or under common
control with it, nor any person having a beneficial interest in it, nor any person on whose behalf such Purchaser is acting: (i)
is a person listed in the Annex to Executive Order No. 13224 (2001) issued by the President of the United States (Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism); (ii) is named
on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Office of Foreign Assets Control; (iii)
is a non-U.S. shell bank or is providing banking services indirectly to a non-U.S. shell bank; (iv) is a senior non-U.S. political
figure or an immediate family member or close associate of such figure; or (v) is otherwise prohibited from investing in the Company
pursuant to applicable U.S. anti-money laundering, anti-terrorist and asset control laws, regulations, rules or orders (categories
(i) through (v), each a “Prohibited Subscriber”). If such Purchaser is a financial institution that is subject
to the USA Patriot Act, such Purchaser represents that it has met all of its obligations under the USA Patriot Act.

 

(j)Buyer’s
Advisors. Such Purchaser and the Purchaser’s attorney, accountant, purchaser representative and/or tax advisor, if any
(collectively, the “advisors”), as the case may be, has such knowledge and experience in financial, tax, and business
matters, and, in particular, investments in securities, so as to enable it to utilize the information made available to it in connection
with the Securities to evaluate the merits and risks of an investment in the Securities and the Company and to make an informed
investment decision with respect thereto.

 

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(k)Purchaser’s
Liquidity. Such Purchaser has adequate means of providing for such Purchaser’s current financial needs and foreseeable
contingencies and has no need for liquidity of its investment in the Units for an indefinite period of time.

 

(l)Speculative
Nature of Investment; Review of Risk Factors. Such Purchaser or its duly authorized representative realizes that because of
the inherently speculative nature of businesses of the kind conducted and contemplated by the Company, the Company’s financial
results may be expected to fluctuate from month to month and from period to period and will, generally, involve a high degree of
financial and market risk that could result in substantial or, at times, even total losses for investors in securities of the Company.
Such Purchaser is aware that an investment in the Units, including the underlying securities, involves a number of very significant
risks, including those set forth in Exhibit F hereto, and has carefully reviewed and understands the risks of, and other
considerations relating to, the purchase of the Units, including the underlying securities.

 

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

 

(n)Information.
Such Purchaser and its advisors have been furnished with all documents and materials relating to the business, finances and operations
of the Company and information that such Purchaser requested and deemed material to making an informed investment decision regarding
its purchase of the Units and the underlying securities. Such Purchaser and its advisors have been afforded the opportunity to
review such documents and materials, as well as the Company’s SEC Reports (hard copies of which were made available to the
Purchaser upon request to the Company or were otherwise accessible to the Purchaser via the SEC’s EDGAR system), and the
information contained therein. Such Purchaser and its advisors have been afforded the opportunity to ask questions of the Company
and its management. Such Purchaser understands that such discussions, as well as any written information provided by the Company,
were intended to describe the aspects of the Company’s business and prospects which the Company believes to be material,
but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Agreement, the Company
makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty
of any kind with respect to any information provided by any entity other than the Company. Some of such information may include
projections as to the future performance of the Company, which projections may not be realized, may be based on assumptions which
may not be correct and may be subject to numerous factors both beyond and within the Company’s control. Additionally, such
Purchaser understands and represents that he is purchasing the Units notwithstanding the fact that the Company may disclose in
the future certain material information the Subscriber has not received, including its financial results for its current fiscal
quarter. Neither such inquiries nor any other due diligence investigations conducted by such Purchaser or its advisors shall modify,
amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in Section
3.1 below. Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Units.

 

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(o)No Other
Representations or Information. In evaluating the suitability of an investment in the Units, such Purchaser has not relied
upon any representation or information (oral or written) other than as stated in this Agreement. No oral or written representations
have been made, or oral or written information furnished, to such Purchaser or its advisors, if any, in connection with the offering
of the Units.

 

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

 

(q)Trading
Activities. Such Purchaser’s trading activities with respect to the Company’s Common Stock shall be in compliance
with all applicable federal and state securities laws, rules and regulations and the rules and regulations of the principal market
on which the Company’s Common Stock is listed or traded. Neither such Purchaser nor its affiliates has an open short position
in the Company’s Common Stock and, except as set forth below, such Purchaser shall not, and shall not cause any of its affiliates
under common control with the Purchaser, to engage in any short sale as defined in any applicable SEC or Financial Industry Regulatory
Authority (FINRA) rules on any hedging transactions with respect to the Common Stock until the later to occur of (i) the conversion
of such Purchaser’s Notes and (ii) the maturity of such Purchaser’s Notes. Without limiting the foregoing, such Purchaser
agrees not to engage in any naked short transactions in excess of the amount of shares owned (or an offsetting long position) by
the Purchaser.

 

(r)Complete
Information. All of the information that such Purchaser has heretofore furnished or which is set forth herein is correct and
complete as of the date of this Agreement, and, if there should be any material change in such information prior to the admission
of the undersigned to the Company, such Purchaser will immediately furnish revised or corrected information to the Company.

 

(s)Receipt of
Documents. Such Purchaser and its counsel have received and read in their entirety: (i) this Agreement, the Risk Factors applicable
to an investment in the Units as set forth in Exhibit F attached hereto, and each representation, warranty and covenant
set forth herein; and (ii) all due diligence and other information necessary to verify the accuracy and completeness of such representations,
warranties and covenants; such Purchaser has received answers to all questions such Purchaser submitted to the Company regarding
an investment in the Company; and such Purchaser has relied on the information contained therein and has not been furnished any
other documents, literature, memorandum or prospectus.

 

(t)No Legal
Advice from the Company. Such Purchaser acknowledges that it had the opportunity to review this Agreement and the transactions
contemplated by this Agreement with its own legal counsel and investment and tax advisors. Such Purchaser is relying solely on
such advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax
or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of
any jurisdiction.

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(u)(For ERISA
plan Purchasers only). The fiduciary of the ERISA plan represents that such fiduciary has been informed of and understands
the Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets” (as
such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification of plan assets
and impose other fiduciary responsibilities. Such Purchaser fiduciary or Plan (i) is responsible for the decision to invest in
the Company; (ii) is independent of the Company or any of its affiliates; (iii) is qualified to make such investment decision;
and (iv) in making such decision, the Purchaser fiduciary or Plan has not relied primarily on any advice or recommendation of the
Company or any of its affiliates.

 

(v)OFAC.
[The Buyer should check the Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before
making the following representations.] Such Purchaser represents that the amounts invested by it in the Company in the Units
were not and are not directly or indirectly derived from activities that contravene federal, state or international laws and regulations,
including anti-money laundering laws and regulations. Federal regulations and Executive Orders administered by OFAC prohibit,
among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories,
entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website
at http://www.treas.gov/ofac. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing
with individuals1 or entities in certain countries regardless of whether such individuals or entities appear on the
OFAC lists.

 

To the best of such
Purchaser’s knowledge, none of: (i) such Purchaser, (ii) any person controlling or controlled by such Purchaser, (iii) if
such Purchaser is a privately-held entity, any person having a beneficial interest in the Buyer, or (iv) any person for whom such
Purchaser is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named
on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any
amounts from a prospective investor if such prospective investor cannot make the representation set forth in the preceding paragraph.
Such Purchaser agrees to promptly notify the Company should the Purchaser become aware of any change in the information set forth
in these representations. Such Purchaser understands and acknowledges that, by law, the Company may be obligated to “freeze
the account” of the Purchaser, either by prohibiting additional subscriptions from the Purchaser, declining any redemption
requests and/or segregating the assets in the account in compliance with governmental regulations, and a broker may also be required
to report such action and to disclose the Purchaser’s identity to OFAC. Such Purchaser further acknowledges that the Company
may, by written notice to the Purchaser, suspend the redemption rights, if any, of the Purchaser if the Company reasonably deems
it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any broker or any of the Company’s
other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and
other parties subject to OFAC sanctions and embargo programs.

 

 

1
These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject
to OFAC sanctions and embargo programs.

    	26

    	 

    

 

(w)Senior Foreign
Political Figure.  To the best of such Purchaser’s knowledge, none of: (i) the Purchaser, (ii) any person controlling
or controlled by the Purchaser, (iii) if the Purchaser is a privately-held entity, any person having a beneficial interest in
the Purchaser, or (iv) any person for whom the Purchaser is acting as agent or nominee in connection with this investment is a
senior foreign political figure2, or any immediate family3 member or close associate4
of a senior foreign political figure, as such terms are defined in the footnotes below.

 

(x)Affiliation
With a Non-U.S. Banking Institution. If such Purchaser is affiliated with a non-U.S. banking institution (a “Foreign
Bank”), or if such Purchaser receives deposits from, makes payments on behalf of, or handles other financial transactions
related to a Foreign Bank, the Purchaser represents and warrants to the Company that: (i) the Foreign Bank has a fixed address,
other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (ii)
the Foreign Bank maintains operating records related to its banking activities; (iii) the Foreign Bank is subject to inspection
by the banking authority that licensed the Foreign Bank to conduct banking activities; and (iv) the Foreign Bank does not provide
banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate.

 

ARTICLE IV.

OTHER AGREEMENTS
OF THE PARTIES

 

4.1Register.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Notes and the Warrants in which the Company shall record the name and
address of the Person in whose name the Notes and the Warrants have been issued (including the name and address of each transferee),
the principal amount of the Notes held by such Person, the number of Conversion Shares issuable upon conversion of the Notes and
the number of Warrant Shares issuable upon exercise of the Warrants held by such Person. The Company shall keep the register open
and available at all times during business hours for inspection of any Purchaser or its legal representatives.

 

 

2. A “senior
foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or judicial
branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive
of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes any corporation,
business or other entity that has been formed by, or for the benefit of, a senior foreign political figure.

 

3. “Immediate
family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and
in-laws.

 

4. A “close associate” of a senior
foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior
foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial
transactions on behalf of the senior foreign political figure.

 

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4.2Transfer
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 4.2(b), the Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities
under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this
Agreement and the Registration Rights Agreement and shall have the rights and obligations of a Purchaser under this Agreement and
the Registration Rights Agreement.

 

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

 

THIS SECURITY 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 MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER
LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT
OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

The Company acknowledges
and agrees that 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 the Registration
Rights 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, including,
if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act
to appropriately amend the list of selling stockholders therein.

 

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Each Note that has
more than a de minimis amount of original issue discount for U.S. Federal Income Tax purposes shall bear a legend in substantially
the following form:

 

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE
DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE.

 

(c)Each Purchaser,
severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities pursuant
to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an
exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance with
the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing
Securities as set forth in this Section is predicated upon the Company’s reliance upon this understanding.

 

(d)The Company
was, until July 18, 2012, a “shell company” as defined in Rule 12b-2 under the Exchange Act. Pursuant to Rule 144(i),
securities issued by a current or former shell company (that is, the Securities) that otherwise meet the holding period and other
requirements of Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year after the Company (a) is no longer
a shell company; and (b) has filed current “Form 10 information“ (as defined in Rule 144(i)) with the Commission reflecting
that it is no longer a shell company, and provided that at the time of a proposed sale pursuant to Rule 144, the Company is subject
to the reporting requirements of section 13 or 15(d) of the Exchange Act and has filed all reports and other materials required
to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period
that the issuer was required to file such reports and materials), other than Form 8-K reports. As a result, the restrictive legends
on certificates for the Securities cannot be removed except in connection with an actual sale meeting the foregoing requirements
or pursuant to an effective registration statement.

 

4.3Integration.
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.

 

4.4Securities
Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K
disclosing the material terms of the transactions contemplated hereby, including the Transaction Documents as exhibits thereto,
with the Commission within the time required by the Exchange Act. The Company and each Purchaser shall consult with each other
in issuing any press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall
issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect
to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the
Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case
the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing
with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except: (a)
as required by federal securities law in connection with (i) any registration statement contemplated by the Registration Rights
Agreement and (ii) the filing of final Transaction Documents (including signature pages thereto) with the Commission and (b) to
the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide Gottbetter
Capital Markets, LLC with prior notice of such disclosure permitted under this clause (b).

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4.5Resales
Absent Effective Registration Statement. Each of the Purchasers understands and acknowledges
that (i) this Agreement and the agreements contemplated hereby may require the Company to issue and deliver the Securities to the
Purchasers with legends restricting their transferability under the Securities Act, and (ii) it is aware that resales of such Securities
may not be made unless, at the time of resale, there is an effective registration statement under the Securities Act covering such
Purchaser’s resale(s) or an applicable exemption from registration.

 

4.6Shareholder
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.

 

4.7Non-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.

 

4.8Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities
hereunder as set forth on Schedule 4.8.

 

4.9Indemnification.

 

(a)Subject to the
provisions of this Section, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members,
partners, employees and agents, each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act) (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 material breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement
or in the other Transaction Documents or (b) any cause of action, suit or claim brought or made against such Purchaser Party and
arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or the other Transaction
Documents by any Purchaser Party. 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. The Company will not be liable to any Purchaser
Party under this Agreement (x) for any settlement by a Purchaser Party effected without the Company’s prior written consent,
which shall not be unreasonably withheld or delayed, (y) to the extent that a loss, liability, obligation, claim, contingency,
damage, cost or expense (including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees
and costs of investigation) 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 or any agreements or understandings
such Purchaser Parties may have with any other person, or (z) for any violations by such Purchaser Parties of state or federal
securities laws or any conduct by such Purchaser Parties which constitutes fraud, gross negligence, willful misconduct or malfeasance.
The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against
the Company or others and any liabilities the Company may be subject to pursuant to law.

    	30

    	 

    

  

(b)Each of the
Purchasers agrees to indemnify and hold harmless the Company, Gottbetter Capital Markets, LLC (including any Selected Dealers of
Gottbetter Capital Markets, LLC) and their respective officers, directors, employees, agents, control persons and affiliates from
and against all losses, liabilities, claims, damages, costs, fees and expenses whatsoever (including, but not limited to, any and
all expenses incurred in investigating, preparing or defending against any litigation commenced or threatened) based upon or arising
out of any actual or alleged false acknowledgment, representation or warranty, or misrepresentation or omission to state a material
fact, or breach by the Purchaser of any covenant or agreement made by the Purchaser herein or in any other document delivered in
connection with this Agreement.

 

4.10Reservation
of Common Stock. As of the date hereof, the Company has reserved and the Company shall
continue to reserve and keep available at all times, free of preemptive rights, a number of shares of Common Stock equal to 100%
of the maximum number of Conversion Shares issuable pursuant to any conversion of the Notes and Warrant Shares issuable pursuant
to any exercise of the Warrants (without taking into account any limitations on the conversion of the Notes or exercise of the
Warrants set forth therein). 

 

4.11Listing
of Common Stock. The Company hereby agrees to use best efforts to maintain the listing
or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the
Company shall apply, if required, to list or quote all of the Conversion Shares and Warrant Shares on such Trading Market and promptly
secure the listing or quotation of all of the Conversion Shares and Warrant Shares on such Trading Market. The Company further
agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application
all of the Conversion Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Conversion
Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take
all action reasonably necessary to continue the listing or quotation and trading of its Common Stock on a Trading Market and will
comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading
Market.

    	31

    	 

    

  

4.12Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted
in violation of any law, ordinance or regulation of any governmental entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect.

 

4.13Restriction
on Redemption and Cash Dividends. So long as any Purchaser owns any Notes, the Company
shall not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the Company
without the prior express written consent of the Purchasers holding then outstanding Notes.

 

4.14Corporate
Existence. So long as any Note is outstanding, the Company shall not be party to any
Fundamental Transaction unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set
forth in the Warrants.

 

4.15Equal
Treatment of Purchasers. Except as contemplated by the Company and the Purchasers
prior to the final Closing Date, 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 any of the Transaction Documents unless
the same consideration is also offered to all of the parties to the Transaction Documents. 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.

 

4.16Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the
other Purchasers, represents and covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding
with it has since becoming aware of the offering of the Securities, nor will, execute any purchases or sales, including Short Sales,
of any of the Company’s securities during the period commencing with the execution of this Agreement and ending on the later
of (x) the conversion of such Purchaser’s Note(s) and (y) the Maturity Date (as defined in the Notes) of such Notes. 
Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company pursuant to the filing of a Current Report on Form 8-K as
described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the
information included in the Transaction Documents and the Schedules.  

 

4.17Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the
Securities as required under Regulation D. The Company shall take such action as the Company shall reasonably determine is necessary
in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers under applicable securities or “Blue
Sky” laws of the states of the United States.

    	32

    	 

    

  

4.18Acknowledgment
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 Conversion Shares and Warrant Shares pursuant to the Transaction Documents, are (except as otherwise provided herein) 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.

 

4.19Investor’s
Right of First Refusal. 

 

(a)For any private
capital raising transactions of Common Stock and Common Stock Equivalents by the Company which close after the date hereof and
on or prior to the date that is eight (8) months after the date of this Agreement, the Company agrees to deliver to each Purchaser,
at least three (3) days prior to the closing of such transaction, written notice describing the proposed transaction, including
the terms and conditions thereof, and providing such Purchaser an option (the “Right of First Refusal”) during
the three (3) day period following delivery of such notice to purchase the securities being offered in such transaction on the
same terms as contemplated by such transaction. If the Purchasers do not exercise the Right of First Refusal in full, the Company
may consummate the remaining portion of the transaction with any new investor(s) on the terms contemplated by such transaction.
If there is more than one Purchaser exercising its Right of First Refusal, the provisions of this Section 4.19 shall apply pro
rata among them (based on their relative amount of Units purchased).

 

(b)Notwithstanding
the above, the Right of First Refusal shall not apply to any transaction involving issuances of securities by the Company to a
company being acquired by the Company, as payment to such company for such acquisition, in connection with a merger, consolidation,
acquisition or sale of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is
not to raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company
or any other transaction that is not for the primary purpose of raising capital, or a primary underwritten offering of the Company’s
Common Stock. The Right of First Refusal also shall not apply to (a) the issuance of securities upon exercise or conversion of
the Company’s options, warrants or other convertible securities outstanding as of the date hereof, (b) the grant of additional
options or warrants, or the issuance of additional securities, under any Company stock option or restricted stock plan for the
benefit of the Company’s officers, employees, directors or consultants, or (c) the issuance of debt securities, with no equity
feature.

    	33

    	 

    

  

ARTICLE V.

MISCELLANEOUS

 

5.1Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary,
each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company
shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities
to the Purchasers. 

 

5.2Entire
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.

 

5.3Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing,
if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

5.4Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended
except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers holding at least 50.1% in
interest of the principal amount of the Notes then outstanding or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought. 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.

 

5.5Headings.
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.

 

5.6Successors
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.”

    	34

    	 

    

  

5.7No
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.

 

5.8Governing
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 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.

 

5.9Survival.
The representations and warranties contained herein shall survive the applicable Closing for a period of 12 months after the Closing
Date applicable to such Closing.

 

5.10Execution;
Omnibus Signature Page. (a) 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 electronic delivery of a data file containing an electronic
facsimile of a signature, such signature shall create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such facsimile were an original thereof. 

    	35

    	 

    

  

(b) This Agreement
is intended to be read and construed in conjunction with the Notes, the Warrants, Registration Rights Agreement, the Security Documents
and the Guaranties. Accordingly, pursuant to the terms and conditions of this Agreement, the Registration Rights Agreement, the
Security Agreement and the Guaranties, it is hereby agreed that the execution by the Purchaser of this Agreement, in the place
set forth on the Omnibus Signature Page below, shall constitute agreement to be bound by the terms and conditions hereof and the
terms and conditions of the Registration Rights Agreement, the Security Agreement and the Guaranties, with the same effect as if
each of such separate but related agreement were separately signed by such Purchaser.

 

5.11Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

5.12Replacement
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.

 

5.13Remedies.
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.

 

5.14Independent
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 hereof or thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its
rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and
it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each
Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For
reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company
through G&P. G&P does not represent any of the Purchasers and only represents the Company. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required
or requested to do so by any of the Purchasers.

    	36

    	 

    

  

5.15Liquidated
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.

 

5.16Saturdays,
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.

 

5.17Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.

 

5.18WAIVER
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)

 

    	37

    	 

    

 

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.

 

	bOLDFACE Group, inc.	Address for Notice:
	 	BOLDFACE Group, Inc.
	 	1309 Pico Blvd., Suite A
	 	Santa Monica, CA 90405 
	By:__________________________________________	Fax: (310) 421-9274
	Name: Nicole Ostoya	 
	Title: Chief Executive Officer and President	 
	 	 
	With a copy to (which shall not constitute notice):	Gottbetter & Partners, LLP
	 	488 Madison Avenue, 12th Floor
	 	New York, NY 10022
	 	Attention: Adam S. Gottbetter

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SCHEDULES AND INSTRUCTIONS FOR PURCHASERS
TO SUBSCRIBE FOR UNITS IN THE PRIVATE OFFERING OF BOLDFACE GROUP, INC. FOLLOW.]

 

    	38

    	 

    

 

 To subscribe for Units in the
private offering of BOLDFACE Group, Inc.:

  

		1.	Date and Fill in the number of Units being purchased and the subscription amount and Complete
and Sign the Signature Page of the Securities Purchase Agreement.

 

		2.	Complete and Sign the Anti-Money Laundering Information Form.

 

		3.	Initial the Accredited Investor Certification page attached to this letter.

 

		4.	Complete and Sign the Investor Profile.

 

		5.	Fax or email all forms and then send all signed original documents to:

 

	Gottbetter & Partners, LLP
	488 Madison Avenue, 12th Floor
	New York, NY 10022
	Facsimile
    Number: 	212.400.6901
	Telephone Number: 	212.400.6900
	Attention: 	Kathleen Rush	
	Email: 	klr@gottbetter.com	

 

		6.	If you are paying the Purchase Price by check, a check for the exact dollar amount of the
Purchase Price for the number of Units you are offering to purchase should be made payable to the order of “CSC Trust Company
of Delaware, as Escrow Agent for BOLDFACE Group, Inc.” and should be sent to CSC Trust Company of Delaware, 2711 Centerville
Road, One Little Falls Centre, Wilmington, DE 19808, Attention: Alan R. Halpern.

 

		7.	If you are paying the Purchase Price by wire transfer, you should send a wire transfer for
the exact dollar amount of the Purchase Price of the number of PPO Units you are offering to purchase according to the following
instructions:

 

	Bank Name:	 	PNC Bank
	 	 	300 Delaware Avenue
	 	 	Wilmington, DE 19899
	ABA Routing Number:	 	031100089
	Account Name:	 	CSC Trust Company of Delaware
	Account Number:	 	5605012373
	Reference:	 	BOLDFACE Group, Inc.; 79-1743; [insert Purchaser’s name]
	Escrow Agent Contact:	 	Alan R. Halpern

 

    	39

    	 

    

 

BOLDFACE GROUP, INC.

OMNIBUS SIGNATURE PAGE TO

SECURITIES PURCHASE AGREEMENT,

REGISTRATION RIGHTS AGREEMENT,

SECURITY AGREEMENT AND GUARANTY

 

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

 

	PURCHASER (individual)	 	 	PURCHASER (entity)
	 	 	 	 
	Signature	 	 	Name of Entity
	 	 	 	 
	 	 	 	 
	Print Name	 	 	Signature of Authorized Person
	 	 	 	 
	 	 	 	Print Name:	 
	Signature (if Joint Tenants or Tenants in Common)	 	 	 
	 	 	 	Title:	 
	 	 	 	 
	Address of Principal Residence:	 	 	Address of Executive Offices:
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Social Security Number(s):	 	 	IRS Tax Identification Number: 
	 	 	 	 
	 	 	 	 
	Telephone Number:	 	 	Telephone Number: 
	 	 	 	 
	 	 	 	 
	Facsimile Number:	 	 	Facsimile Number: 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	E-mail Address:	 	 	E-mail Address: 
	 	 	 	 

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

 

 

 

 

 

 

 

	(NOTE: To be completed by Purchaser):  	$ 	 	 	 
	 	 	(Subscription Amount)	 	(Number of Units)

 

Date (NOTE: To be completed by Purchaser):
__________________

 

    	40

    	 

    

 

ANTI MONEY LAUNDERING REQUIREMENTS

  

The USA PATRIOT Act

 

The USA PATRIOT Act is designed to detect,
deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money laundering requirements on brokerage
firms and financial institutions. Since April 24, 2002 all brokerage firms have been required to have new, comprehensive anti-money
laundering programs.

 

To help you understand these efforts, we
want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.

  

What is money laundering?

 

Money laundering is the process of disguising
illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection
with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.

 

How big is the problem and why is it
important?

 

The use of the U.S. financial system by
criminals to facilitate terrorism or other crimes could well taint our financial markets. According to the U.S. State Department,
one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year.

 

What are we required to do to eliminate
money laundering?

 

Under rules required by the USA PATRIOT
Act, our anti-money laundering program must designate a special compliance officer, set up employee training, conduct independent
audits, and establish policies and procedures to detect and report suspicious transaction and ensure compliance with such laws.
As part of our required program, we may ask you to provide various identification documents or other information. Until you provide
the information or documents we need, we may not be able to effect any transactions for you.

 

    	41

    	 

    

 

ANTI-MONEY LAUNDERING INFORMATION FORM

The following is required in accordance
with the AML provision of the USA PATRIOT ACT.

 

(Please fill out and return with requested
documentation.)

 

	INVESTOR NAME:	 	 
	 	 	 
	LEGAL ADDRESS:	 	 
	 	 	 
	SSN# or TAX ID# OF INVESTOR:	 	 

 

	FOR INVESTORS WHO ARE INDIVIDUALS: 	 	 
	 	 	 
	YEARLY INCOME:	 	 	AGE:	 

  

	NET WORTH (excluding value of primary residence):	 	 
	 	 	 
	OCCUPATION:  	 	 
	 	 	 
	ADDRESS OF EMPLOYER:	 	 
	 	 	 
	 	 	 
	INVESTMENT OBJECTIVE(S):	 	 

 

IDENTIFICATION & DOCUMENTATION
AND SOURCE OF FUNDS:

 

		1.	Please submit a copy of non-expired identification for the authorized signatory(ies) on the investment
documents, showing name, date of birth, address and signature. The address shown on the identification document MUST match the
Investor’s address shown on the Investor Signature Page.

 

	 	Current Driver’s License	or	Valid Passport	or	Identity Card

(Circle one or more)

		2.	If the Investor is a corporation, limited liability company, trust or other type of entity, please
submit the following requisite documents: (i) Articles of Incorporation, By-Laws, Certificate of Formation, Operating Agreement,
Trust or other similar documents for the type of entity; and (ii) Corporate Resolution or power of attorney or other similar document
granting authority to signatory(ies) and designating that they are permitted to make the proposed investment.

 

		3.	Please advise where the funds were derived from to make the proposed investment:

 

	Investments	Savings	Proceeds of Sale	Other ____________

(Circle one or more)

 

	Signature:	 
	Print Name:	 
	Title (if applicable):	 
	Date:	 

 

    	 

    	 

    

 

BOLDFACE GROUP, INC.

ACCREDITED INVESTOR CERTIFICATION

 

	 	 	 	For Individual Investors Only

(all Individual Investors must INITIAL where appropriate):
	 	 	 	 
	Initial	______	 	I have a net worth (including homes, furnishings and automobiles, but excluding for these purposes the value of my primary residence) in excess of $1 million either individually or through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership interest with my spouse.
	Initial	______	 	I have had an annual gross income for the past two years of at least $200,000 (or $300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year.
	Initial	______	 	I am a director or executive officer of BOLDFACE Group, Inc.
	 	 	 	 
	 	 	 	For Non-Individual Investors

(all Non-Individual Investors must INITIAL where appropriate):
	 	 	 	 
	Initial	______	 	The investor certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet at least one of the criteria for Individual Investors set forth above.
	Initial	______	 	The investor certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least $5 million and was not formed for the purpose of investing in the Company.
	Initial	______	 	The investor certifies that it is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan association, insurance company or registered investment adviser.
	Initial	______	 	The investor certifies that it is an employee benefit plan whose total assets exceed $5,000,000 as of the date of this Agreement.
	Initial	______	 	The undersigned certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet either of the criteria for Individual Investors.
	Initial	______	 	The investor certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity.
	Initial	______	 	The undersigned certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934.
	Initial	______	 	The investor certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding $5,000,000 and not formed for the specific purpose of investing in the Company.
	Initial	______	 	The investor certifies that it is a trust with total assets of at least $5,000,000, not formed for the specific purpose of investing in the Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.
	Initial	______	 	The investor certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, and which has total assets in excess of $5,000,000.
	Initial	______	 	The investor certifies that it is an insurance company as defined in §2(13) of the Securities Act of 1933, as amended, or a registered investment company.

 

    	 

    	 

    

 

	 	 	 	For Non-U.S. Person Investors

(all Investors who are not a U.S. Person must INITIAL this section):
	 	 	 	 
	Initial	______	 	The investor is not a “U.S. Person” as defined in Regulation S; and specifically the investor is not:
	 	 	 	 
	 	 	 	A. 	a natural person resident in the United States of America, including its territories and possessions (“United States”);
	 	 	 	 
	 	 	 	B. 	a partnership or corporation organized or incorporated under the laws of the United States;
	 	 	 	 
	 	 	 	C. 	an estate of which any executor or administrator is a U.S. Person;
	 	 	 	 
	 	 	 	D. 	a trust of which any trustee is a U.S. Person;
	 	 	 	 
	 	 	 	E. 	an agency or branch of a foreign entity located in the United States;
	 	 	 	 
	 	 	 	F. 	a non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person;
	 	 	 	 
	 	 	 	G.	a discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; or
	 	 	 	 
	 	 	 	H. 	a partnership or corporation: (i) organized or incorporated under the laws of any foreign jurisdiction; and (ii) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.
	 	 	 	 
	 	 	 	And, in addition:
	 	 	 	 
	 	 	 	I. 	the investor was not offered the securities in the United States;
	 	 	 	 
	 	 	 	J. 	at the time the buy-order for the securities was originated, the investor was outside the United States; and
	 	 	 	 
	 	 	 	K.	the investor is purchasing the securities for its own account and not on behalf of any U.S. Person (as defined in Regulation S) and a sale of the securities has not been pre-arranged with a purchaser in the United States.

 

    	43

    	 

    

 

BOLDFACE GROUP, INC.

Investor Profile

(Must be completed by Investor)

 

Section A - Personal Investor Information

 

	Investor Name(s):	 
	Individual executing Profile or Trustee:	 
	Social Security Numbers / Federal I.D. Number:	 
	Date of Birth:	 	 	 	Marital Status:	 	 
	Joint Party Date of Birth:	 	 	 	Investment Experience (Years):	 	 
	Annual Income:	 	 	 	Liquid Net Worth:	 	 
	Net Worth (excluding value of primary residence):	 
	Tax Bracket:	 	 	15% or below	 	 	25% - 27.5%	 	 	Over 27.5%
	 	 
	Home Street Address:	 
	Home City, State & Zip Code:	 
	Home Phone:	 	Home Fax:	 	Home Email:	 
	Employer:	 
	Employer Street Address:	 
	Employer City, State & Zip Code:	 
	Bus. Phone:	 	Bus.
    Fax:	 	Bus. Email:	 
	Type of Business:	 
	(PLACEMENT AGENT) Account Executive / Outside Broker/Dealer:
	If you are a United States citizen, please list the number and jurisdiction of issuance of any other government-issued document evidencing residence and bearing a photograph or similar safeguard (such as a driver’s license or passport), and provide a photocopy of each of the documents you have listed.
	 
	If you are NOT a United States citizen, for each jurisdiction of which you are a citizen or in which you work or reside, please list (i) your passport number and country of issuance or (ii) alien identification card number AND (iii) number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard, and provide a photocopy of each of these documents you have listed.  These photocopies must be certified by a lawyer as to authenticity.  
	 
	 
	Section B – Certificate Delivery Instructions
	 
	 	 	Please deliver certificate to the Employer Address listed in Section A.
	 	 	Please deliver certificate to the Home Address listed in Section A.
	 	 	Please deliver certificate to the following address:	 
	 
	Section C – Form of Payment – Check or Wire Transfer
	 
	 	 	Check payable to CSC Trust Company of Delaware , as Escrow Agent for BOLDFACE Group, Inc.
	 	 	Wire funds from my outside account according to the “How to subscribe for Units” Page.
	 	 	The funds for this investment are rolled over, tax deferred from __________ within the allowed 60 day window.
	 
	Please check if you are a FINRA member or affiliate of a FINRA member firm: ________
	 	 	 
	Investor Signature	 	Date
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

    	 

    	 

    

 

Exhibit A

 

Guaranty

 

[See Exhibit 10.4]

 

    	46

    	 

    

 

Exhibit B

 

Form of Notes

 

[See Exhibit 4.1]

 

    	47

    	 

    

 

Exhibit C-1

 

Form of $0.25 Warrants

 

[See Exhibit 4.2]

 

    	48

    	 

    

 

Exhibit C-2

 

Form of $0.50 Warrants

 

[See Exhibit 4.3]

 

    	49

    	 

    

 

Exhibit D

 

Security Agreement

 

[See Exhibit 10.3]

 

    	50

    	 

    

 

Exhibit E

 

Registration Rights Agreement

 

[See Exhibit 10.2]

 

    	51Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT 

 

This Registration Rights
Agreement (this “Agreement”) is made and entered into as of April 8, 2013, and effective as of December 21, 2012 between
BOLDFACE Group, Inc., a Nevada corporation (the “Company”), and the persons who have executed the signature page(s)
hereto (each, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS:

 

WHEREAS, the Company
offered, in compliance with Rule 506 of Regulation D and/or Regulation S of the Securities Act (as defined herein), to investors
in a private placement transaction (the “PPO”), units (the “Units”) of its securities, with each Unit consisting
of (i) a Note in denomination of Two Hundred Thousand Dollars ($200,000), which will be convertible into shares of the Company’s
Common Stock and (ii) the Purchaser Warrants;

 

WHEREAS, the first
closing of the PPO took place on December 21, 2012; and

 

WHEREAS, the final
closing of the PPO took place on April 8, 2013; and

 

WHEREAS, in connection
with the PPO, the Company agreed to provide certain registration rights related to the Warrant Shares and the Conversion Shares,
on the terms set forth herein.

 

NOW, THEREFORE, in
consideration of the mutual promises, representations, warranties, covenants, and conditions set forth herein, the parties mutually
agree as follows:

 

1.Certain Definitions. Capitalized
terms used and not otherwise defined herein shall have the meanings ascribed to them in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated April 8, 2013, among the Company and the Purchasers signatory thereto. As used in
this Agreement, the following terms shall have the following respective meanings:

 

“Approved
Market” means the Over-the-Counter Bulletin Board, the Nasdaq Stock Market, the New York Stock Exchange or the American
Stock Exchange.

 

“Blackout
Period” means, with respect to a registration, a period, in each case commencing on the day immediately after the Company
notifies the Purchasers that they are required, because of the occurrence of an event of the kind described in Section 4(f) hereof,
to suspend offers and sales of Registrable Securities during which the Company, in the good faith judgment of its board of directors,
determines (because of the existence of, or in anticipation of, any acquisition, financing activity, or other transaction involving
the Company, or the unavailability for reasons beyond the Company’s control of any required financial statements, disclosure
of information which is in its best interest not to publicly disclose, or any other event or condition of similar significance
to the Company) that the registration and distribution of the Registrable Securities to be covered by such Registration Statement,
if any, would be seriously detrimental to the Company and its stockholders and ending on the earlier of (1) the date upon which
the material non-public information commencing the Blackout Period is disclosed to the public or ceases to be material and (2)
such time as the Company notifies the selling Holders that the Company will no longer delay such filing of the Registration Statement,
recommence taking steps to make such Registration Statement effective, or allow sales pursuant to such Registration Statement to
resume.

 

    	 

    	 

    

 

“Business
Day” means any day of the year, other than a Saturday, Sunday, or other day on which the Commission is required or authorized
to close.

 

“Commission”
means the U. S. Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

 

“Common Stock”
means the common stock of the Company and any and all shares of capital stock or other equity securities of: (i) the Company which
are added to or exchanged or substituted for the Common Stock by reason of the declaration of any stock dividend or stock split,
the issuance of any distribution or the reclassification, readjustment, recapitalization or other such modification of the capital
structure of the Company; and (ii) any other corporation, now or hereafter organized under the laws of any state or other governmental
authority, with which the Company is merged, which results from any consolidation or reorganization to which the Company is a party,
or to which is sold all or substantially all of the shares or assets of the Company, if immediately after such merger, consolidation,
reorganization or sale, the Company or the stockholders of the Company own equity securities having in the aggregate more than
50% of the total voting power of such other corporation.

 

“Effective
Date” means the later of (i) the date set forth in the preamble to this Agreement and (ii) the date of the final closing
of the PPO.

 

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

 

“Family Member”
means (a) with respect to any individual, such individual’s spouse, any descendants (whether natural or adopted), any trust
all of the beneficial interests of which are owned by any of such individuals or by any of such individuals together with any organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, the estate of any such individual, and any corporation,
association, partnership or limited liability company all of the equity interests of which are owned by those above described individuals,
trusts or organizations and (b) with respect to any trust, the owners of the beneficial interests of such trust.

 

“Holder”
means each Purchaser or any of such Purchaser’s respective successors and Permitted Assignees who acquire rights in accordance
with this Agreement with respect to any Registrable Securities directly or indirectly from a Purchaser or from any Permitted Assignee.

 

    	2

    	 

    

 

“Majority
Holders” means at any time Holders representing a majority of the Registrable Securities.

 

“Permitted
Assignee” means (a) with respect to a partnership, its partners or former partners in accordance with their partnership
interests, (b) with respect to a corporation, its stockholders in accordance with their interest in the corporation, (c) with respect
to a limited liability company, its members or former members in accordance with their interest in the limited liability company,
(d) with respect to an individual party, any Family Member of such party, (e) an entity that is controlled by, controls, or is
under common control with a transferor, or (f) a party to this Agreement.

 

“Piggyback
Registration” means, in any registration of Common Stock as set forth in Section 3(b), the ability of holders of Registrable
Securities to include Registrable Securities in such registration.

 

“PPO”
has the meaning given it in the recitals of this Agreement.

 

The terms “register,”
“registered,” and “registration” refers to a registration effected by preparing and filing
a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration
statement.

 

“Registrable
Securities” means the Warrant Shares and Conversion Shares but excluding (i) any Registrable Securities that have been
publicly sold or may be sold immediately without registration under the Securities Act either pursuant to Rule 144 of the Securities
Act or otherwise; (ii) any Registrable Securities sold by a person in a transaction pursuant to a registration statement filed
under the Securities Act; (iii) any Registrable Securities that are at the time subject to an effective registration statement
under the Securities Act; or (iv) any shares underlying the warrant commission issued to the placement agent and sub-agents in
the PPO.

 

“Registration
Default Date” means the date that is 90 days after the date the Registration Statement is actually filed with the Commission.

 

“Registration
Default Period” means the period during which any Registration Event occurs and is continuing.

 

“Registration
Event” means the occurrence of any of the following events:

 

(a)the Company
fails to file with the Commission the Registration Statement on or before the Registration Filing Date;

 

(b)the Company
fails to use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the Commission
on or before the Registration Default Date;

 

    	3

    	 

    

 

(c)after the SEC
Effective Date, sales of Registrable Securities cannot be made pursuant to the Registration Statement for any reason (including
without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement) other than the
occurrence of an event of the kind described in Section 4(f) which gives rise to a Blackout Period and except as excused pursuant
to Section 3(e); or

 

(d)the Common Stock
generally or the Registrable Securities specifically are not listed or included for quotation on an Approved Market, or trading
of the Common Stock is suspended or halted on the Approved Market, which at the time constitutes the principal market for the Common
Stock, for more than two full, consecutive Trading Days; provided, however, a Registration Event shall not be deemed to occur if
all or substantially all trading in equity securities (including the Common Stock) is suspended or halted on the Approved Market
for any length of time.

 

“Registration
Filing Date” means the date that is 45 days after date of the final closing of the PPO.

 

“Registration
Statement” means the registration statement that the Company is required to file pursuant to this Agreement to register
the Registrable Securities.

 

“Rule 144”
means Rule 144 promulgated by the Commission under the Securities Act.

 

“Rule 145”
means Rule 145 promulgated by the Commission under the Securities Act.

 

“Rule 415”
means Rule 415 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 purpose and effect as such Rule.

 

“Securities
Act” means the Securities Act of 1933, as amended, or any similar federal statute promulgated in replacement thereof,
and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

 

“SEC Effective
Date” means the date the Registration Statement is declared effective by the Commission.

 

“Trading Day”
means (a) if the Common Stock is listed or quoted on an Approved Market, then any day during which securities are generally eligible
for trading on the Approved Market, or (b) if the Common Stock is not then listed or quoted and traded on an Approved Market, then
any business day.

 

“Units”
has the meaning given it in the recitals of this Agreement.

 

2.Term.  This Agreement
shall expire two years from the SEC Effective Date, unless terminated sooner hereunder.

 

    	4

    	 

    

 

3.Registration.

 

(a)Registration
on Form S-1. Not later than the Registration Filing Date, the Company shall use its best efforts to file with the Commission
a Registration Statement on Form S-1, or other applicable form, relating to the resale by the Holders of all of the Registrable
Securities, and the Company shall use its commercially reasonable efforts to cause such Registration Statement to be declared effective
prior to the Registration Default Date.

 

(b)Piggyback
Registration. The Holders of any shares of Common Stock removed from the Registration Statement as the result of a cutback
comment from the Commission shall be entitled to Piggyback Registration with respect to such removed shares at any time following
the SEC Effective Date with respect to a registration statement filed by the Company which would permit the inclusion of such shares.
Accordingly, if the Company shall determine to register for sale for cash any of its Common Stock, for its own account or for the
account of others (other than the Holders), other than (i) a registration relating solely to employee benefit plans or securities
issued or issuable to employees, consultants (to the extent the securities owned or to be owned by such consultants could be registered
on Form S-8) or any of their Family Members (including a registration on Form S-8) or (ii) a registration relating solely to a
Securities Act Rule 145 transaction or a registration on Form S-4 in connection with a merger, acquisition, divestiture, reorganization
or similar event, the Company shall promptly give to the Holders written notice thereof (and in no event shall such notice be given
less than 20 calendar days prior to the filing of such registration statement), and shall, subject to Section 3(c), include as
a Piggyback Registration all of the Registrable Securities specified in a written request delivered by the Holder thereof within
10 calendar days after receipt of such written notice from the Company. However, the Company may, without the consent of the Holders,
withdraw such registration statement prior to its becoming effective if the Company or such other stockholders have elected to
abandon the proposal to register the securities proposed to be registered thereby. Notwithstanding the foregoing, Piggyback Registration
will not apply to any shares which can be sold without limitation under Rule 144.

 

(c)Underwriting.
If a Piggyback Registration is for a registered public offering that is to be made by an underwriting, the Company shall so advise
the Holders of the Registrable Securities eligible for inclusion in such Registration Statement pursuant to Sections 3(b). In that
event, the right of any Holder to Piggyback Registration shall be conditioned upon such Holder’s participation in such underwriting
and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders
proposing to sell any of their Registrable Securities through such underwriting shall (together with the Company and any other
stockholders of the Company selling their securities through such underwriting) enter into an underwriting agreement in customary
form with the underwriter selected for such underwriting by the Company or the selling stockholders, as applicable. Notwithstanding
any other provision of this Section, if the underwriter or the Company determines that marketing factors require a limitation on
the number of shares of Common Stock or the amount of other securities to be underwritten, the underwriter may exclude some or
all Registrable Securities from such registration and underwriting. The Company shall so advise all Holders (except those Holders
who failed to timely elect to include their Registrable Securities through such underwriting or have indicated to the Company their
decision not to do so), and indicate to each such Holder the number of shares of Registrable Securities that may be included in
the registration and underwriting, if any. The number of shares of Registrable Securities to be included in such registration and
underwriting shall be allocated among such Holders as follows:

 

    	5

    	 

    

 

(i)If
the Piggyback Registration was initiated by the Company, the number of shares that may be included in the registration and underwriting
shall be allocated first to the Company and then, subject to obligations and commitments existing as of the date hereof, to all
selling stockholders, including the Holders, who have requested to sell in the registration on a pro rata basis according to the
number of shares requested to be included therein; and

 

(ii)If
the Piggyback Registration was initiated by the exercise of demand registration rights by a stockholder or stockholders of the
Company (other than the Holders), then the number of shares that may be included in the registration and underwriting shall be
allocated first to such selling stockholders who exercised such demand and then, subject to obligations and commitments existing
as of the date hereof, to all other selling stockholders, including the Holders, who have requested to sell in the registration
on a pro rata basis according to the number of shares requested to be included therein.

 

No Registrable Securities
excluded from the underwriting by reason of the underwriter’s marketing limitation shall be included in such registration.
If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw such Holder’s Registrable
Securities therefrom by delivering a written notice to the Company and the underwriter. The Registrable Securities so withdrawn
from such underwriting shall also be withdrawn from such registration; provided, however, that, if by the withdrawal of such Registrable
Securities, a greater number of Registrable Securities held by other Holders may be included in such registration (up to the maximum
of any limitation imposed by the underwriters), then the Company shall offer to all Holders who have included Registrable Securities
in the registration the right to include additional Registrable Securities pursuant to the terms and limitations set forth herein
in the same proportion used above in determining the underwriter limitation.

 

(d)Occurrence
of Registration Event. If a Registration Event occurs, then the Company will make payments in cash to each Holder of Registrable
Securities (a “Qualified Purchaser”), as liquidated damages for the amount of damages to the Qualified Purchaser by
reason thereof, at a rate equal to 0.5% of the purchase price per Unit paid by such Holder in the PPO for the Registrable Securities
then held by each Qualified Purchaser for each full period of 30 days of the Registration Default Period (which shall be pro rated
for any period less than 30 days); provided, however, if a Registration Event occurs (or is continuing) on a date more than one
year after the Effective Date, liquidated damages shall be paid only with respect to that portion of the Qualified Purchaser’s
Registrable Securities that cannot then be immediately resold in reliance on Rule 144. Notwithstanding the foregoing, the maximum
amount of liquidated damages that may be paid to any Qualified Purchaser pursuant to this Section 3(d) shall be an amount equal
to 6% of the purchase price per Unit paid by such Holder in the PPO for the Registrable Securities held by such Qualified Purchaser
at the time of the first occurrence of a Registration Event. Each such payment shall be due and payable within five days after
the end of each full 30-day period of the Registration Default Period until the termination of the Registration Default Period
and within five days after such termination. Such payments shall constitute the Qualified Purchaser’s exclusive remedy for
such events. If the Company fails to pay any partial liquidated damages or refund pursuant to this Section in full within seven
days after the date payable, the Company will pay interest thereon at a rate of 8% per annum (or such lesser maximum amount that
is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due
until such amounts, plus all such interest thereon, are paid in full. The Registration Default Period shall terminate upon (i)
the filing of the Registration Statement in the case of clause (a) of the definition of Registration Event, (ii) the SEC Effective
Date in the case of clause (b) of the definition of Registration Event, (iii) the ability of the Qualified Purchaser to effect
sales pursuant to the Registration Statement in the case of clause (c) of the definition of Registration Event, (iv) the listing
or inclusion and/or trading of the Common Stock on an Approved Market, as the case may be, in the case of clause (d) of the definition
of Registration Event, and (v) in the case of the events described in clauses (b) and (c) of the definition of Registration Event,
the earlier termination of the Registration Default Period. The amounts payable as liquidated damages pursuant to this Section
3(d) shall be payable in lawful money of the United States.

 

    	6

    	 

    

 

(e)Notwithstanding
the provisions of Section 3(d) above, (a) if the Commission does not declare the Registration Statement effective on or before
the Registration Default Date, or (b) if the Commission allows the Registration Statement to be declared effective at any time
before or after the Registration Default Date, subject to the withdrawal of certain Registrable Securities from the Registration
Statement, and the reason for (a) or (b) is the Commission’s determination that (x) the offering of any of the Registrable
Securities constitutes a primary offering of securities by the Company, (y) Rule 415 may not be relied upon for the registration
of the resale of any or all of the Registrable Securities, and/or (z) a Holder of any Registrable Securities must be named as an
underwriter, the Holders understand and agree that in the case of (b) the Company may reduce, on a pro rata basis, the total number
of Registrable Securities to be registered on behalf of each such Holder, and, in the case of (a) or (b), and that a Holder shall
not be entitled to any liquidated damages with respect to the Registrable Securities not registered for the reason set forth in
(a), or so reduced on a pro rata basis as set forth in (b). In any such pro rata reduction, the number of Registrable Securities
to be registered on such Registration Statement will first be reduced by the Registrable Securities represented by the Warrant
Shares (applied, in the case that some Warrant Shares may be registered, to the Holders on a pro rata basis based on the total
number of unregistered Warrant Shares held by such Holders on a fully diluted basis), and second by Registrable Securities represented
by Conversion Shares (applied, in the case that some Conversion Shares may be registered, to the Holders on a pro rata basis based
on the total number of unregistered Conversion Shares held by such Holders). In addition, any such affected Holder shall be entitled
to Piggyback Registration rights after the Registration Statement is declared effective by the Commission until the earlier of
such time as: (AA) all Registrable Securities have been registered pursuant to an effective Registration Statement, (BB) the Registrable
Securities may be resold without restriction pursuant to Rule 144 of the Securities Act, or (CC) the Holder agrees to be named
as an underwriter in any such registration statement. The Holders acknowledge and agree the provisions of this paragraph may apply
to the Registration Statement and Piggyback Registrations.

 

    	7

    	 

    

 

4.Registration Procedures for Registrable
Securities.  The Company will keep each Holder reasonably advised as to the filing and effectiveness of the Registration
Statement. At its expense with respect to the Registration Statement, the Company will:

 

(a)prepare and
file with the Commission with respect to the Registrable Securities, a Registration Statement on Form S-1, or any other form for
which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for
the sale of the Registrable Securities in accordance with the intended methods of distribution thereof, and use its commercially
reasonable efforts to cause such Registration Statement to become effective and shall remain effective for a period of one year
or for such shorter period ending on the earlier to occur of (i) the date as of which all of the Holders as selling stockholders
thereunder may sell all of the Registrable Securities registered for resale thereon without restriction pursuant to Rule 144 (or
any successor rule thereto) promulgated under the Securities Act or (ii) the date when all of the Registrable Securities registered
thereunder shall have been sold (the “Effectiveness Period”). Thereafter, the Company shall be entitled to withdraw
such Registration Statement and the Investors shall have no further right to offer or sell any of the Registrable Securities registered
for resale thereon pursuant to the respective Registration Statement (or any prospectus relating thereto);

 

(b)if the Registration
Statement is subject to review by the Commission, promptly respond to all comments and diligently pursue resolution of any comments
to the satisfaction of the Commission;

 

(c)prepare and
file with the Commission such amendments and supplements to such Registration Statement as may be necessary to keep such Registration
Statement effective during the Effectiveness Period;

 

(d)furnish, without
charge, to each Holder of Registrable Securities covered by such Registration Statement such number of copies of the prospectus
included in such Registration Statement (including each preliminary prospectus and any other prospectus filed under Rule 424 of
the Securities Act) as such Holders may reasonably request, in conformity with the requirements of the Securities Act, to the extent
required in order for the Holder to meet any prospectus delivery requirement applicable to the disposition of the Registrable Securities
owned by such Holder, but only during the Effectiveness Period;

 

    	8

    	 

    

 

(e)use its commercially
reasonable efforts to register or qualify such registration under such other applicable securities laws of such jurisdictions in
the United States as any Holder of Registrable Securities covered by such Registration Statement reasonably requests and as may
be necessary for the marketability of the Registrable Securities (such request to be made by the time the applicable Registration
Statement is deemed effective by the Commission) and do any and all other acts and things necessary to enable such Holder to consummate
the disposition in such jurisdictions of the Registrable Securities owned by such Holder; provided, that the Company shall not
be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but
for this paragraph, (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in
any such jurisdiction.

 

(f)notify each
Holder of Registrable Securities, the disposition of which requires delivery of a prospectus relating thereto under the Securities
Act, of the happening of any event (as promptly as practicable after becoming aware of such event), which comes to the Company’s
attention, that will after the occurrence of such event cause the prospectus included in such Registration Statement, if not amended
or supplemented, to contain an untrue statement of a material fact or an omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and the Company shall promptly thereafter prepare and furnish
to such Holder a supplement or amendment to such prospectus (or prepare and file appropriate reports under the Exchange Act) so
that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein
not misleading, unless suspension of the use of such prospectus otherwise is authorized herein or in the event of a Blackout Period,
in which case no supplement or amendment need be furnished (or Exchange Act filing made) until the termination of such suspension
or Blackout Period;

 

(g)comply, and
continue to comply during the Effectiveness Period, in all material respects with the Securities Act and the Exchange Act and with
all applicable rules and regulations of the Commission with respect to the disposition of all securities covered by such Registration
Statement;

 

(h)as promptly
as practicable after becoming aware of such event, notify each Holder of Registrable Securities being offered or sold pursuant
to the Registration Statement of the issuance by the Commission of any stop order or other suspension of effectiveness of the Registration
Statement;

 

    	9

    	 

    

 

(i)use its commercially
reasonable efforts to cause all the Registrable Securities covered by the Registration Statement to be quoted on the OTC Bulletin
Board or such other principal securities market on which securities of the same class or series issued by the Company are then
listed or traded;

 

(j) provide a transfer
agent and registrar, which may be a single entity, for the shares of Common Stock at all times;

 

(k)if requested
by the Holders, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable
Securities transferred by such Holders to a transferee pursuant to the Registration Statement, which certificates shall be free,
to the extent permitted by applicable law, of all restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may request;

 

(l)during the Effectiveness
Period, refrain from bidding for or purchasing any Common Stock or any right to purchase Common Stock or attempting to induce any
person to purchase any such security or right if such bid, purchase or attempt would in any way limit the right of the Holders
to sell Registrable Securities by reason of the limitations set forth in Regulation M of the Exchange Act; and

 

(m)take all other
reasonable actions necessary to expedite and facilitate the disposition by the Holders of the Registrable Securities pursuant to
the Registration Statement.

 

5.Suspension of Offers and Sales.  Each
Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section
4(f) hereof or of the commencement of a Blackout Period, such Holder shall discontinue the disposition of Registrable Securities
included in the Registration Statement until such Holder’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 4(f) hereof or notice of the end of the Blackout Period, and, if so directed by the Company, such Holder
shall deliver to the Company (at the Company’s expense) all copies (including, without limitation, any and all drafts), other
than permanent file copies, then in such Holder’s possession, of the prospectus covering such Registrable Securities current
at the time of receipt of such notice.

 

6.Registration Expenses.  The
Company shall pay all expenses in connection with any registration obligation provided herein, including, without limitation, all
registration, filing, stock exchange fees, printing expenses, all fees and expenses of complying with applicable securities laws,
and the fees and disbursements of counsel for the Company and of its independent accountants; provided, that, in any registration,
each party shall pay for its own underwriting discounts and commissions and transfer taxes. Except as provided in this Section
and Section 9, the Company shall not be responsible for the expenses of any attorney or other advisor employed by a Holder.

 

    	10

    	 

    

 

7.Assignment of Rights.  No
Holder may assign its rights under this Agreement to any party without the prior written consent of the Company; provided, however,
that any Holder may assign its rights under this Agreement without such consent to a Permitted Assignee as long as (a) such transfer
or assignment is effected in accordance with applicable securities laws; (b) such transferee or assignee agrees in writing to become
subject to the terms of this Agreement; and (c) such Holder notifies the Company in writing of such transfer or assignment, stating
the name and address of the transferee or assignee and identifying the Registrable Securities with respect to which such rights
are being transferred or assigned.

 

8.Information by Holder. Each
Holder agrees to furnish to the Company a completed selling securityholder notice and questionnaire in the form attached to this
Agreement as Annex A not later than three (3) Business Days following a request therefor from the Company. The Company’s
obligations in Section 3 with respect to each Holder shall be conditioned upon such Holder’s furnishing to the Company promptly
upon request such information regarding itself, the Registrable Securities held by it, the intended method of disposition of such
securities, and such other information as shall be required in order to comply with any applicable law or regulation in connection
with the registration of such Holder’s Registrable Securities or any qualification or compliance with respect to such Holder’s
Registrable Securities and referred to in this Agreement. The Company’s obligations in Section 3 with respect to each Holder
shall also be conditioned upon such Holder’s disposition of its Registrable Securities in accordance with applicable law.

 

9.Indemnification.

 

(a)In the event
of the offer and sale of Registrable Securities under the Securities Act, the Company shall, and hereby does, indemnify and hold
harmless, to the fullest extent permitted by law, each Holder, its directors, officers, partners, each other person who participates
as an underwriter in the offering or sale of such securities, and each other person, if any, who controls or is under common control
with such Holder or any such underwriter within the meaning of Section 15 of the Securities Act, against any losses, claims, damages
or liabilities, joint or several, and expenses to which the Holder or any such director, officer, partner or underwriter or controlling
person may become subject under the Securities Act, the Exchange Act, or any other federal or state law, insofar as such losses,
claims, damages, liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise
out of or are based upon any untrue statement of any material fact contained in any registration statement prepared and filed by
the Company under which Registrable Securities were registered under the Securities Act, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto, or any omission to state therein a material fact
required to be stated or necessary to make the statements therein in light of the circumstances in which they were made not misleading,
or any violation or alleged violation of the Securities Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state securities law by the Company in connection with this Agreement;
and the Company shall reimburse the Holder, and each such director, officer, partner, underwriter and controlling person for any
legal or any other expenses reasonably incurred by them in connection with investigating, defending or settling any such loss,
claim, damage, liability, action or proceeding; provided, that such indemnity agreement found in this Section 9(a) shall in no
event exceed the net proceeds from the PPO received by the Company; and provided further, that the Company shall not be liable
in any such case (i) to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon (a) an untrue statement in or omission from such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information
furnished to the Company by the Holder specifically for use in the preparation thereof or (b) any failure of a Holder to distribute
Registrable Securities in accordance with applicable laws, or (ii) if the person asserting any such loss, claim, damage, liability
(or action or proceeding in respect thereof) who purchased the Registrable Securities that are the subject thereof did not receive
a copy of an amended preliminary prospectus or the final prospectus (or the final prospectus as amended or supplemented) at or
prior to the written confirmation of the sale of such Registrable Securities to such person because of the failure of such Holder
or underwriter to so provide such amended preliminary or final prospectus and the untrue statement or omission of a material fact
made in such preliminary prospectus was corrected in the amended preliminary or final prospectus (or the final prospectus as amended
or supplemented). Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of
the Holders, or any such director, officer, partner, underwriter or controlling person and shall survive the transfer of such shares
by the Holder.

 

    	11

    	 

    

 

(b)As a condition
to including Registrable Securities in any registration statement filed pursuant to this Agreement, each Holder agrees to be bound
by the terms of this Section 9 and to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors
and officers, and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which the Company or any such director or officer or controlling
person may become subject under the Securities Act, the Exchange Act, or any other federal or state law, to the extent arising
out of or based upon: (x) such Holder’s failure to comply with the prospectus delivery requirements of the Securities Act,
(y) any failure of a Holder to distribute Registrable Securities in accordance with applicable laws, or (z) any untrue or alleged
untrue statement of a material fact contained in any registration statement, any prospectus, or any form of prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to make the statements therein not misleading (i) to the extent,
but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such
Holder to the Company specifically for inclusion in the registration statement or such prospectus or (ii) to the extent that (1)
such untrue statements or omissions are based upon information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed
method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for
use in the Registration Statement, such prospectus or such form of prospectus or in any amendment or supplement thereto or (2)
in the case of an occurrence of an event of the type specified in Section 4(f) hereof, the use by such Holder of an outdated or
defective prospectus after the Company has notified such Holder in writing that the prospectus is outdated or defective and prior
to the receipt by such Holder of the advice contemplated in Section 4(f). In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

 

    	12

    	 

    

 

(c)Promptly after
receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in this
Section (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the indemnifying party of the commencement of such action; provided, that the failure
of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under this
Section, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in the reasonable judgment of counsel to such indemnified party a conflict
of interest between such indemnified and indemnifying parties may exist or the indemnified party may have defenses not available
to the indemnifying party in respect of such claim, the indemnifying party shall be entitled to participate in and to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof, unless in such
indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in
respect of such claim after the assumption of the defenses thereof or the indemnifying party fails to defend such claim in a diligent
manner, other than reasonable costs of investigation. Neither an indemnified nor an indemnifying party shall be liable for any
settlement of any action or proceeding effected without its consent. No indemnifying party shall, without the consent of the indemnified
party, consent to entry of any judgment or enter into any settlement, which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.
Notwithstanding anything to the contrary set forth herein, and without limiting any of the rights set forth above, in any event
any party shall have the right to retain, at its own expense, counsel with respect to the defense of a claim.

 

    	13

    	 

    

 

(d)If an indemnifying
party does or is not permitted to assume the defense of an action pursuant to Sections 9(c) or in the case of the expense reimbursement
obligation set forth in Sections 9(a) and (b), the indemnification required by Sections 9(a) and 9(b) shall be made by periodic
payments of the amount thereof during the course of the investigation or defense, as and when bills received or expenses, losses,
damages, or liabilities are incurred.

 

(e)If the indemnification
provided for in Section 9(a) or 9(b) is held by a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense referred to herein, the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall (i) contribute to the amount paid or payable by such indemnified party as a result of such loss,
liability, claim, damage or expense as is appropriate to reflect the proportionate relative fault of the indemnifying party on
the one hand and the indemnified party on the other (determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission relates to information supplied by the indemnifying party or the indemnified party
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement
or omission), or (ii) if the allocation provided by clause (i) above is not permitted by applicable law or provides a lesser sum
to the indemnified party than the amount hereinafter calculated, not only the proportionate relative fault of the indemnifying
party and the indemnified party, but also the relative benefits received by the indemnifying party on the one hand and the indemnified
party on the other, as well as any other relevant equitable considerations. No indemnified party guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party who was
not guilty of such fraudulent misrepresentation.

 

(f)Other Indemnification.
Indemnification similar to that specified in this Section (with appropriate modifications) shall be given by the Company and each
Holder of Registrable Securities with respect to any required registration or other qualification of securities under any federal
or state law or regulation or governmental authority other than the Securities Act.

 

10.Rule 144.  With
a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the Commission that may
at any time permit the Holders to sell the Registrable Securities to the public without registration, the Company agrees: (i) to
make and keep public information available as those terms are understood in Rule 144, (ii) to file with the Commission in a timely
manner all reports and other documents required to be filed by an issuer of securities registered under the Securities Act or the
Exchange Act pursuant to Rule 144, (iii) as long as any Holder owns any Registrable Securities, to furnish in writing upon such
Holder’s request a written statement by the Company that it has complied with the reporting requirements of Rule 144 and
of the Securities Act and the Exchange Act, and to furnish to such Holder a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed by the Company as may be reasonably requested in availing such Holder
of any rule or regulation of the Commission permitting the selling of any such Registrable Securities without registration and
(iv) undertake any additional actions commercially reasonably necessary to maintain the availability of the use of Rule 144.

 

    	14

    	 

    

 

11.Corporate Existence.  For
a period of one (1) year commencing on the date hereof, and so long as any Holder owns any Registrable Securities, the Company
shall not directly or indirectly consummate any merger, reorganization, restructuring, reverse stock split, consolidation, sale
of all or substantially all of the Company’s assets or any similar transaction or related transactions (each such transaction,
an “Organizational Change”), unless, prior to the consummation of an Organizational Change, the Company obtains the
written consent of the Majority Holders.

 

12.Independent Nature of Each Purchaser’s
Obligations and Rights.  The obligations of each Purchaser under this Agreement are several and not joint with the
obligations of any other Purchaser, and each Purchaser shall not be responsible in any way for the performance of the obligations
of any other Purchaser under this Agreement. Nothing contained herein and no action taken by any Purchaser pursuant hereto, shall
be deemed to constitute such 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 this Agreement. Each Purchaser shall be entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose; provided, however, that the Majority Holders shall be able to alter the rights of each
Purchaser as provided herein.

 

13.Other Registration Rights.  The
Company shall not grant any registration rights which would require the Company to file a registration statement in connection
therewith prior to the effectiveness of the Registration Statement without the consent of the Majority Holders.

 

14.Miscellaneous.

 

(a)Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the United States of America and the
State of New York, both substantive and remedial, without regard to New York conflicts of law principles. Any judicial proceeding
brought against either of the parties to this Agreement or any dispute arising out of this Agreement or any matter related hereto
shall be brought in the courts of the State of New York, New York County, or in the United States District Court for the Southern
District of New York and, by its execution and delivery of this Agreement, each party to this Agreement accepts the jurisdiction
of such courts. The foregoing consent to jurisdiction shall not be deemed to confer rights on any person other than the parties
to this Agreement.

 

    	15

    	 

    

 

(b)Remedies.
In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate. Notwithstanding
the foregoing, the sole and exclusive remedy for a Registration Event shall be as set forth in Section 3(d).

 

(c)Successors
and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon,
the successors, Permitted Assignees, executors and administrators of the parties hereto.

 

(d)No Inconsistent
Agreements. The Company has not entered, as of the date hereof, and shall not enter, on or after the date of this Agreement,
into any agreement with respect to its securities that would have the effect of impairing the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof.

 

(e)Entire Agreement.
This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof.

 

(f)Notices,
etc. All notices or other communications which are required or permitted under this Agreement shall be in writing and sufficient
if delivered by hand, by facsimile transmission, by registered or certified mail, postage pre-paid, by electronic mail, or by courier
or overnight carrier, to the persons at the addresses set forth below (or at such other address as may be provided hereunder),
and shall be deemed to have been delivered as of the earlier of the date of actual delivery or, as of the first business day following
the date of transmission, if delivered by facsimile, five days after mailing, if delivered by registered or certified mail, or
the next business day if delivered by electronic mail or by overnight courier:

 

If to the Company to:

 

BOLDFACE Group, Inc.

1309 Pico Blvd., Suite A

Santa Monica, CA 90405 

Attention:  Nicole
Ostoya, CEO and President

Facsimile:  (310)
421-9274

 

    	16

    	 

    

  

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

 

Gottbetter & Partners, LLP 

488 Madison Avenue, 12th
Floor 

New York, NY 10022

Attention:  Adam S.
Gottbetter, Esq. 

Facsimile:  (212) 400-6901

 

If to the Purchasers:

 

To each Purchaser at
the address set forth on the signature page hereto

 

or at such other address as any party shall
have furnished to the other parties in writing.

 

(g)Delays or
Omissions.  No delay or omission to exercise any right, power or remedy accruing to any Holder, upon any breach or
default of the Company under this Agreement, shall impair any such right, power or remedy of such Holder nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereunder occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default
under this Agreement, or any waiver on the part of any Holder of any provisions or conditions of this Agreement, must be in writing
and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or
by law or otherwise afforded to any holder, shall be cumulative and not alternative.

 

(h)Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing
such counterparts, and all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

(i)Severability.  In
the case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby.

 

(j)Amendments.  The
provisions of this Agreement may be amended at any time and from time to time, and particular provisions of this Agreement may
be waived, with and only with an agreement or consent in writing signed by the Company and the Majority Holders. The Purchasers
acknowledge that by the operation of this Section, the Majority Holders may have the right and power to diminish or eliminate all
rights of the Purchasers under this Agreement.

 

[signature
pages follow]

 

    	17

    	 

    

 

This Registration Rights
Agreement is hereby executed as of the date first above written.

 

	 	BOLDFACE GROUP, INC.
	 	 
	 	By:_______________________________
	 	Name: Nicole Ostoya
	 	Title:   Chief Executive Officer and President

  

[PURCHASERS SIGN BY EXECUTING OMNIBUS
SIGNATURE PAGE 

TO THE SECURITIES PURCHASE AGREEMENT]

 

    	 

    	 

    

 

ANNEX A

 

BOLDFACE GROUP, INC.

 

Selling Securityholder Notice and Questionnaire

  

The undersigned beneficial
owner of securities of BOLDFACE Group, Inc., a Nevada corporation (the “Company”), with respect to which the
undersigned has certain registration rights (“Registrable Securities”), understands that the Company has filed
or intends to file with the Securities and Exchange Commission a registration statement (the “Registration Statement”)
for the registration and resale under Rule 415 of the Securities Act of 1933, as amended, of the Registrable Securities, in accordance
with the terms of a registration rights agreement between the Company and the undersigned, among others (the “Registration
Rights Agreement”). A copy of the Registration Rights Agreement is available from the Company upon request at the address
set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration
Rights Agreement. 

 

Certain legal consequences
arise from being named as a selling securityholder in the Registration Statement and the related prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Registration Statement and the related prospectus. 

 

NOTICE 

 

The undersigned beneficial
owner (the “Selling Securityholder”) of Registrable Securities hereby elects to include the Registrable Securities
owned by the Selling Securityholder in the Registration Statement.

 

The undersigned hereby
provides the following information to the Company and represents and warrants that such information is accurate: 

 

QUESTIONNAIRE

 

 

1. Name: 

 

	 	(a)	Full Legal Name of Selling Securityholder:
	 	 	 
	 	 	 
	 	 	 
	 	(b)	Full Legal Name of Holder of Record (if not the same as (a) above) through which Registrable Securities are held:
	 	 	 
	 	 	 
	 	 	 
	 	(c)	Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this questionnaire):
	 	 	 
	 	 	 

 

    	 

    	 

    

 

2. Address for Notices to Selling
Securityholder:

 

	 
	 
	 
	Telephone:		Fax:	
	Email:	
	Contact Person: 	 

 

3. Broker-Dealer Status:

 

		(a)	Are you a broker-dealer?

 

Yes  ̈ No  ̈

 

		(b)	If “yes” to Section 3(a), did you receive
your Registrable Securities as compensation for investment banking services to the Company?

 

Yes  ̈ No  ̈

 

		Note: 	If “no” to Section 3(b), the Commission’s
staff has indicated that you should be identified as an underwriter in the Registration Statement.

  

		(c)	Are you an affiliate of a broker-dealer?

 

Yes  ̈ No  ̈

 

		(d)	If you are an affiliate of a broker-dealer, do you
certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the
Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute
the Registrable Securities?

 

Yes  ̈ No  ̈

 

		Note: 	If “no” to Section 3(d), the Commission’s
staff has indicated that you should be identified as an underwriter in the Registration Statement.

  

    	2

    	 

    

 

4. Beneficial Ownership of Securities of
the Company Owned by the Selling Securityholder:

  

Except as set forth below
in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company.

  

		(a)	Type and Amount of securities (including any Registrable
Securities) beneficially owned1 by the Selling Securityholder:
	 	 	 
	 	 	 
	 	 	 
	 	 	 

  

5. Relationships with the Company:

 

Except as set forth below,
neither the undersigned nor (if you are a natural person) any member of your immediate family, nor (if you are not a natural person)
any of your affiliates2, officers, directors or principal equity holders (owners of 5% of more of the equity securities
of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors
or affiliates) during the past three years.

 

		
	 	State any exceptions here:
	 	 
	 	 
	 	 
	 	 

 

 

1Beneficially
Owned:  A “beneficial owner” of a security includes any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise has or shares (i) voting power, including
the power to direct the voting of such security, or (ii) investment power, including the power to dispose
of, or direct the disposition of, such security.  In addition, a person is deemed to have “beneficial ownership”
of a security of which such person has the right to acquire beneficial ownership at any time within 60 days, including, but
not limited to, any right to acquire such security: (i) through the exercise of any option, warrant or right, (ii) through
the conversion of any security or (iii) pursuant to the power to revoke, or the automatic termination of, a trust, discretionary
account or similar arrangement. 

 

It is possible that a security
may have more than one “beneficial owner,” such as a trust, with two co-trustees sharing voting power, and the settlor
or another third party having investment power, in which case each of the three would be the “beneficial owner” of
the securities in the trust.  The power to vote or direct the voting, or to invest or dispose of, or direct the investment
or disposition of, a security may be indirect and arise from legal, economic, contractual or other rights, and the determination
of beneficial ownership depends upon who ultimately possesses or shares the power to direct the voting or the disposition of the
security. 

 

The final determination of the
existence of beneficial ownership depends upon the facts of each case.  You may, if you believe the facts warrant it, disclaim
beneficial ownership of securities that might otherwise be considered “beneficially owned” by you.

 

		2	Affiliate:  An “affiliate” is a company or person that directly,
or indirectly through one or more intermediaries, controls you, or is controlled by you, or is under common control with you.

  

    	3

    	 

    

 

The undersigned agrees
to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to
the date hereof at any time prior to the effectiveness of the Registration Statement or while the Registration Statement remains
effective.

 

By signing below,
the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion
of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned
understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration
Statement and the related prospectus and any amendments or supplements thereto.

 

IN WITNESS WHEREOF,
the undersigned, by authority duly given, has caused this Selling Securityholder Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent. 

 

	BENEFICIAL OWNER (individual)	 	BENEFICIAL OWNER (entity)
	 	 	 
	 	 	 
	Signature	 	Name of Entity
	 	 	 
	 	 	 
	Print Name	 	Signature
	 	 	 
	 	 	Print Name:	
	Signature (if Joint Tenants or Tenants in Common)	 	
	 	 	Title:	

 

	Dated:	 	 

 

PLEASE E-MAIL OR FAX A COPY OF THE COMPLETED
AND EXECUTED QUESTIONNAIRE, AND RETURN THE ORIGINAL BY MAIL, TO:

 

Gottbetter & Partners, LLP 

488 Madison Avenue, 12th Floor 

New York, NY 10022 

Attention: Kathleen L. Rush 

Facsimile: (212) 400-6901 

E-mail: klr@gottbetter.com 

 

PLEASE RETURN THE COMPLETED AND EXECUTED
NOTICE AND QUESTIONNAIRE AT YOUR FIRST OPPORTUNITY.

 

    	4

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