Document:

Exhibit
10.1

 

SECURITIES
PURCHASE AGREEMENT

 

THIS SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of September 18, 2019, is entered into by and between VERIFYME,
INC., a Nevada corporation, (the “Company”) and Peak One Opportunity Fund,
L.P., a Delaware limited partnership (the “Buyer”).

 

WITNESSETH:

 

WHEREAS, the
Company and the Buyer are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securities
registration afforded, inter alia, by Rule 506 under Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933
Act”), and/or Section 4(a)(2) of the 1933 Act; and

 

WHEREAS, the
Buyer wishes to purchase from the Company, and the Company wishes to sell the Buyer, upon the terms and subject to the conditions
of this Agreement, securities consisting of the Company’s senior secured convertible debentures (the “Debentures”),
each of which are in the form of Exhibit A hereto, which will be convertible into shares of the Company’s common stock,
par value $0.001 per share (the “Common Stock”), in the aggregate principal amount of up to Six Hundred Thousand and
00/100 Dollars ($600,000.00), for an aggregate Purchase Price of up to Five Hundred Forty Thousand and 00/100 Dollars ($540,000.00),
all upon the terms and subject to the conditions of this Agreement, the Debentures, and other related documents;

 

NOW THEREFORE,
in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.            DEFINITIONS;
AGREEMENT TO PURCHASE.

 

a.       Certain
Definitions. As used herein, each of the following terms has the meaning set forth below, unless the context otherwise requires:

 

(i)       “Affiliate”
means, with respect to a specific Person referred to in the relevant provision, another Person who or which controls or is controlled
by or is under common control with such specified Person.

 

(ii)       “Certificates”
means certificates representing the Conversion Shares issuable hereunder, each duly executed on behalf of the Company and issued
hereunder.

 

(iii)       “Closing
Date” means the date on which one of the two (2) Closings are held, which are the Signing Closing Date and the Second Closing
Date.

 

(iv)       “Commitment
Fee” shall have the meaning ascribed to such term in Section 12(a).

 

    	 		 

    	 

    

 

(v)       “Commitment
Shares” shall have the meaning ascribed to such term in Section 12(a).

 

(vi)       “Common
Stock” shall have the meaning ascribed to such term in the Recitals.

 

(vii)       “Conversion
Amount” shall mean the Conversion Amount as defined in the Debentures, provided, however that for purposes of the
foregoing calculation, the full indebtedness under the Debentures shall be deemed immediately convertible, notwithstanding the
4.99% limitation on ownership set forth in the Debentures.

 

(viii)       “Conversion
Price” means the Conversion Price as defined in the Debentures.

 

(ix)       “Conversion
Shares” means the shares of Common Stock issuable upon conversion of the Debentures.

 

(x)       “DWAC
Operational” means that the Common Stock is eligible for clearing through the Depository Trust Company (“DTC”)
via the DTC’s Deposit Withdrawal Agent Commission or “DWAC” system and active and in good standing for DWAC issuance
by the Transfer Agent (as defined herein).

 

(xi)       “Dollars”
or “$” means United States Dollars.

 

(xii)       “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(xiii)       “Investments”
means Peak One Investments, LLC, the general partner of the Buyer.

 

(xiv)       “Irrevocable
Resolutions” has the meaning set forth in Section 8(i).

 

(xv)       “Market
Price of the Common Stock” means (x) the closing bid price of the Common Stock for the period indicated in the relevant provision
hereof (unless a different relevant period is specified in the relevant provision), as reported by Bloomberg, LP or, if not so
reported, as reported on the OTCQB, OTCQX or OTC Pink or (y) if the Common Stock is listed on a stock exchange, the closing price
on such exchange, as reported by Bloomberg LP.

 

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(xvi)       “Material
Adverse Effect” means a material adverse effect on the (i) business, operations or condition (financial or otherwise) or
results of operation of the Company and its Subsidiaries taken as a whole; (ii) legality, validity or enforceability of any of
the Transaction Documents; or (iii) Company’s ability to perform in any material respect on a timely basis its obligations
under the Transaction Documents. Without limiting the generality of the foregoing, the occurrence of any of the following shall
be considered a Material Adverse Effect: (i) any final money, judgment, writ or warrant of attachment, or similar process (including
an arbitral determination) in excess of One Hundred Thousand Dollars ($100,000) shall be entered or filed against the Company or
any of its Subsidiaries (including, in any event, products liability claims against the Company or its Subsidiaries), (ii) the
suspension or withdrawal of any governmental authority or permit pertaining to a material amount of the Company’s or any
Subsidiary’s products or services, (iii) the loss of and inability to replace any material insurance coverage (including,
in any case, comprehensive general liability coverage, products liability coverage or directors and officers coverage, in each
case in effect at the time of execution and delivery of this Agreement), (iv) an action by a regulatory agency or governmental
body affecting the Common Stock (including, without limitation, (1) the commencement of any regulatory investigation of which the
Company is aware, the suspension of trading of the Common Stock by the Financial Industry Regulation Authority (“FINRA”),
the SEC, the OTC Bulletin Board (“OTCBB”) or the OTC Markets Group, Inc., the failure of the Common Stock to be DTC
eligible or the placing of the Common Stock on the DTC “chill list” or (2) the engaging in any market manipulation
or other unlawful or improper trading or other activity by any Affiliate), (v) the Company’s independent registered accountants
shall resign under circumstances where a disagreement exists between the Company and its independent registered accountants, or
(vi) the Chief Executive Officer of the Company shall, for any reason (including, without limitation, termination, resignation,
retirement, death or disability) cease to act on behalf of the Company in the same role and to the same extent as his or her involvement
as of the date of execution and delivery of this Agreement.

 

(xvii)       “Person”
means any living person or any entity, such as, but not necessarily limited to, a corporation, partnership or trust.

 

(xviii)       “Purchase
Price” means the price that the Buyer pays for the Debentures at each respective Closing, which are the Signing Purchase
Price and the Second Purchase Price, as the case may be.

 

(xix)       “Registrable
Securities” shall mean the Commitment Shares, Conversion Shares, and, to the extent applicable, and any other shares of capital
stock or other securities of the Company or any successor to the Company that are issued upon exchange of Conversion Shares and/or
such Restricted Stock.

 

(xx)       “Registration
Statement” shall mean any registration statement filed or contemplated to be filed by the Company with the SEC under the
Securities Act.

 

(xxi)       “Restricted
Stock” shall mean shares of Common Stock which are not freely trading shares when issued.

 

(xxii)       “Securities”
means the Debentures, the Shares, and Commitment Shares (as defined in this Agreement).

 

(xxiii)       
“Shares” means the Conversion Shares.

 

(xxiv)       
“Second Closing Date” shall have the meaning ascribed to such term in Section 6(b).

 

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(xxv)       “Second
Debenture” means the second of the two (2) Debentures, in the principal amount of Three Hundred Thousand and 00/100 Dollars
($300,000.00), which is issued by the Company to the Buyer on the Second Closing Date.

 

(xxvi)       “Second
Purchase Price” shall be Two Hundred Seventy Thousand and 00/100 Dollars ($270,000.00)

 

(xxvii)       “Signing
Closing Date” shall have the meaning ascribed to such term in Section 6(a).

 

(xxviii)       
“Signing Debenture” means the first of the two (2) Debentures, in the principal amount of Three Hundred Thousand and
00/100 Dollars ($300,000.00), to be issued by the Company to the Buyer on the Signing Closing Date.

 

(xxix)       “Signing
Purchase Price” shall be Two Hundred Seventy Thousand and 00/100 Dollars ($270,000.00).

 

(xxx)       “Subsidiary”
shall have the meaning ascribed to such term in Section 3(b).

 

(xxxi)       
[Intentionally Omitted].

 

(xxxii)       
[Intentionally Omitted].

 

(xxxiii)       
[Intentionally Omitted].

 

(xxxiv)       
“Transaction Documents” means, collectively, this Agreement, the Debentures, the Transfer Agent Instruction Letter,
the Irrevocable Resolutions and the other agreements, documents and instruments contemplated hereby or thereby.

 

(xxxv)       “Transfer
Agent” shall have the meaning ascribed to such term in Section 4(a).

 

(xxxvi)       
“Transfer Agent Instruction Letter” shall have the meaning ascribed to such term in Section 5(a).

 

b.       Purchase
and Sale of Debentures.

 

(i)       The
Buyer agrees to purchase from the Company, and the Company agrees to sell to the Buyer, the Debentures on the terms and conditions
set forth below in this Agreement and the other Transaction Documents. The Commitment Shares shall be earned in full as an inducement
fee as of the Signing Closing Date.

 

(ii)       Subject
to the terms and conditions of this Agreement and the other Transaction Documents, the Buyer will purchase the Debentures at certain
closings (each, a “Closing”) to be held on certain respective Closing Dates.

 

c.       [Reserved]

 

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(i)       [Reserved]

 

(ii)       [Reserved]

 

2.       BUYER’S
REPRESENTATIONS, WARRANTIES, ETC.

 

The Buyer represents
and warrants to, and covenants and agrees with, the Company as follows:

 

a.       Investment
Purpose. Without limiting the Buyer’s right to sell the Shares pursuant to a Registration Statement, Buyer is purchasing
the Debentures, and will be acquiring the Conversion Shares, as principal for its own account for investment purposes only and
not with a view towards the public sale or distribution thereof and not with a view to or for sale in connection with any distribution
thereof. The Buyer is purchasing the Debentures in the ordinary course of its business.

 

b.       Accredited
Investor Status. Buyer is (i) an “accredited investor” as that term is defined in Rule 501 of the General Rules
and Regulations under the 1933 Act by reason of Rule 501(a)(3), (ii) experienced in making investments of the kind described in
this Agreement and the related documents, (iii) able, by reason of the business and financial experience of its officers (if an
entity) and professional advisors (who are not affiliated with or compensated in any way by the Company or any of its affiliates
or selling agents), to protect its own interests in connection with the transactions described in this Agreement, and the related
documents, and (iv) able to afford the entire loss of its investment in the Securities.

 

c.       Subsequent
Offers and Sales. Buyer understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state law. All subsequent offers and sales of the Securities by the Buyer shall be made
pursuant to registration of the Shares under the 1933 Act or pursuant to an exemption from registration and compliance with applicable
states’ securities laws.

 

d.       Reliance
on Exemptions. Buyer 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 upon the truth
and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire
the Securities.

 

e.       Information.
Buyer and its advisors have been furnished with all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities which have been requested by the Buyer. Buyer and its advisors have
been afforded the opportunity to ask questions of the Company and have received complete and satisfactory answers to any such inquiries.
Without limiting the generality of the foregoing, Buyer has also had the opportunity to obtain and to review the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2019.

 

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f.       Investment
Risk. Buyer understands that its investment in the securities constitutes high risk investment, its investment in the Securities
involves a high degree of risk, including the risk of loss of the Buyer’s entire investment.

 

g.       Governmental
Review. Buyer understands that no United States federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities.

 

h.       Organization;
Authorization. Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization
with full right and power to enter into and consummate the transactions contemplated by the Transaction Documents. This Agreement
and the other Transaction Documents have been duly and validly authorized, executed and delivered on behalf of the Buyer and create
a valid and binding agreement of the Buyer enforceable in accordance with its terms, subject as to enforceability to general principles
of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights
generally.

 

i.       Residency.
The state in which any offer to sell Securities hereunder was made to or accepted by the Buyer is the state shown as the Buyer’s
address contained herein, and Buyer is a resident of such state only.

 

3.       COMPANY
REPRESENTATIONS AND WARRANTIES, ETC. 

 

The Company represents
and warrants to the Buyer that:

 

a.       Concerning
the Debentures and the Shares. There are no preemptive rights of any stockholder of the Company to acquire the Debentures or
the Shares.

 

b.       Organization;
Subsidiaries; Reporting Company Status. Attached hereto as Schedule 3(b) is an organizational chart describing all of
the Company’s wholly-owned and majority-owned subsidiaries (the “Subsidiaries”) and other Affiliates, including
the relationships among the Company and such Subsidiaries, including as to each Subsidiary its jurisdiction of organization and
the percentage of ownership held by the Company, and the parent company of the Subsidiary, including the percentage of ownership
of the Company held by it. The Company and each Subsidiary is a corporation or other form of businesses entity duly organized,
validly existing and in good standing under the laws its respective jurisdiction of organization, and each of them has the requisite
corporate or other power to own its properties and to carry on its business as now being conducted. The Company and each Subsidiary
is duly qualified as a foreign corporation or other entity to do business and is in good standing in each jurisdiction where the
nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in
which the failure to so qualify would not have a Material Adverse Effect. The Common Stock is listed and traded on the OTCQB (trading
symbol: VRME). The Company has received no notice, either oral or written, from FINRA, the SEC, or any other organization, with
respect to the continued eligibility of the Common Stock for such listing, and the Company has maintained all requirements for
the continuation of such listing. The Company is an operating company in that, among other things (A) it primarily engages, wholly
or substantially, directly or indirectly through a majority owned Subsidiary or Subsidiaries, in the production or sale, or the
research or development, of a product or service other than the investment of capital, (B) it is not an individual or sole proprietorship,
(C) it is not an entity with no specific business plan or purpose and its business plan is not to engage in a merger or acquisition
with an unidentified company or companies or other entity or person, and (D) it intends to use the proceeds from the sale of the
Debentures solely for the operation of the Company’s business and uses other than personal, family, or household purposes.

 

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c.       Authorized
Shares. Schedule 3(c) sets forth all capital stock and derivative securities of the Company that are authorized for
issuance and that are issued and outstanding. All issued and outstanding shares of Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable. The Company has sufficient authorized and unissued shares of Common Stock as may be
necessary to effect the issuance of the Shares, assuming the prior issuance and exercise, exchange or conversion, as the case may
be, of all derivative securities authorized, as indicated in Schedule 3(c). The Shares have been duly authorized and, when
issued upon conversion of, or as interest on, the Debentures, the Shares will be duly and validly issued, fully paid and non-assessable
and will not subject the holder thereof to personal liability by reason of being such holder. At all times, the Company shall keep
available and reserved for issuance to the holders of the Debentures shares of Common Stock duly authorized for issuance against
the Debentures. As of the effective date of this Agreement, other than as reflected in the SEC Documents (as defined in this Agreement)
of the Company (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by
which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Securities.

 

d.       Authorization.
This Agreement, the issuance of the Debentures (including without limitation the incurrence of indebtedness thereunder), the
issuance of the Conversion Shares under the Debentures, and the other transactions contemplated by the Transaction Documents, have
been duly, validly and irrevocably authorized by the Company, and this Agreement has been duly executed and delivered by the Company.
The Company’s board of directors, in the exercise of its fiduciary duties, has irrevocably approved the entry into and performance
of the Transaction Documents, including, without limitation the sale of the Debentures and the issuance of Conversion Shares, based
upon a reasonable inquiry concerning the Company’s financing objectives and financial situation. Each of the Transaction
Documents, when executed and delivered by the Company, are and will be, valid, legal and binding agreements of the Company, enforceable
in accordance with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors’ rights generally.

 

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e.       Non-contravention.
The execution and delivery of the Transaction Documents, the issuance of the Securities and the consummation by the Company
of the other transactions contemplated by this Agreement and the Debentures (including without limitation the incurrence of indebtedness
thereunder) do not and will not conflict with or result in a breach by the Company of any of the terms or provisions of, or constitute
a default under (i) the articles of incorporation or by-laws of the Company, each as currently in effect, (ii) any indenture, mortgage,
deed of trust, or other material agreement or instrument to which the Company is a party or by which it or any of its properties
or assets are bound, including any listing agreement for the Common Stock, except as herein set forth or an event which results
in the creation of any lien, charge or encumbrance upon any assets of the Company or the triggering of any anti-dilution rights,
rights of first refusal or first offer on the part of holders of the Company’s securities, (iii) to its knowledge, any existing
applicable law, rule, or regulation or any applicable decree, judgment, or order of any court, United States federal or state regulatory
body, administrative agency, or other governmental body having jurisdiction over the Company or any of its properties or assets,
or (iv) the Company’s listing agreement for its Common Stock (if applicable), unless such conflict, breach or default would
not have a Material Adverse Effect.

 

f.       Approvals.
No authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or
stock exchange or market or the stockholders of the Company is required to be obtained by the Company for the entering into and
performing this Agreement and the other Transaction Documents (including without limitation the issuance and sale of the Securities
to the Buyer as contemplated by this Agreement) except such authorizations, approvals and consents that have been obtained, or
such authorizations, approvals and consents, the failure of which to obtain would not have a Material Adverse Effect.

 

g.       SEC
Documents; Rule 144 Status. None of the SEC Documents contained, at the time they were filed, any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein in light
of the circumstances under which they were made, not misleading. The Company has filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act
of 1934, as amended (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements
and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter
referred to herein as the “SEC Documents”). Except as disclosed to the Buyer in writing, the Company is not aware of
any event occurring on or prior to the execution and delivery of this Agreement that would require the filing of, or with respect
to which the Company intends to file, a Form 8-K after such time. The Company satisfies the requirements of Rule 144(i)(2), and
the Company shall continue to satisfy all applicable requirements of Rule 144 (or any successor thereto) for so long as any Securities
are outstanding and not registered pursuant to an effective Registration Statement filed with the SEC.

 

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h.       Absence
of Certain Changes. Since June 30, 2019, when viewed from the perspective of the Company and its Subsidiaries taken as a whole,
there has been no material adverse change and no material adverse development in the business, properties, operations, condition
(financial or otherwise), or results of operations of the Company and its Subsidiaries (including, without limitation, a change
or development which constitutes, or with the passage of time is reasonably likely to become, a Material Adverse Effect), except
as disclosed in the SEC Documents. Since June 30, 2019, except as provided in the SEC Documents, the Company has not (i) incurred
or become subject to any material liabilities (absolute or contingent) except liabilities incurred in the ordinary course of business
consistent with past practices; (ii) discharged or satisfied any material lien or encumbrance or paid any material obligation or
liability (absolute or contingent), other than current liabilities paid in the ordinary course of business consistent with past
practices; (iii) declared or made any payment or distribution of cash or other property to stockholders with respect to its capital
stock, or purchased or redeemed, or made any agreements to purchase or redeem, any shares of its capital stock; (iv) sold, assigned
or transferred any other tangible assets, or canceled any debts or claims, except in the ordinary course of business consistent
with past practices; (v) suffered any substantial losses or waived any rights of material value, whether or not in the ordinary
course of business, or suffered the loss of any material amount of existing business; (vi) made any changes in employee compensation,
except in the ordinary course of business consistent with past practices; or (vii) experienced any material problems with labor
or management in connection with the terms and conditions of their employment.

 

i.       Full
Disclosure. There is no fact known to the Company (other than general economic conditions known to the public generally or
as disclosed in the SEC Documents) that has not been disclosed in writing to the Buyer that (i) would reasonably be expected to
have a Material Adverse Effect, (ii) would reasonably be expected to materially and adversely affect the ability of the Company
to perform its obligations pursuant to the Transaction Documents, or (iii) would reasonably be expected to materially and adversely
affect the value of the rights granted to the Buyer in the Transaction Documents.

 

j.       Absence
of Litigation. Except as described in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board or body pending or, to the knowledge of the Company, threatened against or affecting the Company,
wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect or which would adversely affect the validity
or enforceability of, or the authority or ability of the Company to perform its obligations under, any of the Transaction Documents.
The Company is not a party to or subject to the provisions of, any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality which could reasonably be expected to have a Material Adverse Effect.

 

k.       Absence
of Liens. The Company’s assets are not encumbered by any liens or mortgages except as described in the SEC Documents.

 

l.       Absence
of Events of Default. No event of default (or its equivalent term), as defined in the respective agreement, indenture, mortgage,
deed of trust or other instrument, to which the Company is a party, and no event which, with the giving of notice or the passage
of time or both, would become an event of default (or its equivalent term) (as so defined in such document), has occurred and is
continuing, which would have a Material Adverse Effect.

 

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m.       No
Undisclosed Liabilities or Events. The Company has no liabilities or obligations other than those disclosed in the SEC Documents
or those incurred in the ordinary course of the Company’s business since June 30, 2019, and which individually or in the
aggregate, do not or would not have a Material Adverse Effect. No event or circumstances has occurred or exists with respect to
the Company or its properties, business, condition (financial or otherwise), or results of operations, which, under applicable
law, rule or regulation, requires public disclosure or announcement prior to the date hereof by the Company but which has not been
so publicly announced or disclosed. Except with respect to a proposal for an increase in the Company’s authorized Common
Stock, there are no proposals currently under consideration or currently anticipated to be under consideration by the Board of
Directors or the executive officers of the Company which proposal would (x) change the articles of incorporation, by-laws or any
other charter document of the Company, each as currently in effect, with or without shareholder approval, which change would reduce
or otherwise adversely affect the rights and powers of the shareholders of the Common Stock or (y) materially or substantially
change the business, assets or capital of the Company.

 

n.       No
Integrated Offering. Neither the Company nor any of its affiliates nor any Person acting on its or their behalf has, directly
or indirectly, at any time during the six month period immediately prior to the date of this Agreement made any offer or sales
of any security or solicited any offers to buy any security under circumstances that would eliminate the availability of the exemption
from registration under Rule 506 of Regulation D in connection with the offer and sale of the Securities as contemplated hereby.
Neither the Company nor any of its affiliates nor any Person acting on its or their behalf has, has directly or indirectly made
any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration
under the Securities Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be
integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder
approval provisions applicable to the Company or its securities.

 

o.       Dilution.
The number of Shares issuable upon conversion of the Debentures may increase substantially in certain circumstances, including,
but not necessarily limited to, the circumstance wherein the Market Price of the Common Stock declines prior to the conversion
of the Debentures. The Company’s executive officers and directors have studied and fully understand the nature of the securities
being sold hereby and recognize that they have a potential dilutive effect and further that the conversion of the Debentures and/or
sale of the Conversion Shares may have an adverse effect on the Market Price of the Common Stock. The Board of Directors of the
Company has concluded, in its good faith business judgment that such issuance is in the best interests of the Company. The Company
specifically acknowledges that its obligation to issue the Conversion Shares upon conversion of the Debentures is binding upon
the Company and enforceable regardless of the dilution such issuance may have on the ownership percentage of other shareholders
of the Company.

 

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p.       Regulatory
Permits. The Company has all such permits, easements, consents, licenses, franchises and other governmental and regulatory
authorizations from all appropriate federal, state, local or other public authorities (“Permits”) as are necessary
to own and lease its properties and conduct its businesses in all material respects in the manner described in the SEC Documents
and as currently being conducted. All such Permits are in full force and effect and the Company has fulfilled and performed all
of its material obligations with respect to such Permits, and no event has occurred that allows, or after notice or lapse of time
would allow, revocation or termination thereof or will result in any other material impairment of the rights of the holder of any
such Permit, subject in each case to such qualification as may be disclosed in the SEC Documents. Such Permits contain no restrictions
that would materially impair the ability of the Company to conduct businesses in the manner consistent with its past practices.
The Company has not received notice or otherwise has knowledge of any proceeding or action relating to the revocation or modification
of any such Permit.

 

q.       Residency.
The state in which any offer to sell Securities hereunder was made or accepted by the Seller is the state shown as the Seller’s
address contained herein.

 

r.       Hazardous
Materials. The Company is in compliance with all applicable Environmental Laws in all respects except where the failure to
comply does not have and could not reasonably be expected to have a Material Adverse Effect. For purposes of the foregoing:

 

“Environmental
Laws” means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,
the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances Control
Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, any other “Superfund” or “Superlien”
law or any other applicable federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, the environment or any Hazardous Material.

 

“Hazardous Material”
means and includes any hazardous, toxic or dangerous waste, substance or material, the generation, handling, storage, disposal,
treatment or emission of which is subject to any Environmental Law.

 

s.       Independent
Public Accountants.  The Company’s auditor is an independent registered public accounting firm with respect to the Company,
as required by the 1933 Act, the Exchange Act and the rules and regulations promulgated thereunder.

 

t.       Internal
Accounting Controls. Except as disclosed in the SEC Documents, the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (1) transactions are executed in accordance with management’s general or
specific authorization; (2) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain accountability for assets; (3) access to assets is permitted only
in accordance with management’s general or specific authorization; and (4) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

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u.       Brokers.
Except with respect to Maxim Group, LLC, a registered broker-dealer, no Person (other than the Buyer and its principals, employees
and agents) is entitled to receive any consideration from the Company or the Buyer arising from any finder’s agreement, brokerage
agreement or other agreement to which the Company is a party in connection with the transactions contemplated by the Transaction
Documents.

 

v.       
DWAC Operational; DRS. The Company is currently and shall remain DWAC Operational and eligible for DRS

 

4.       CERTAIN
COVENANTS AND ACKNOWLEDGMENTS.

 

a.       Transfer
Restrictions. The parties acknowledge and agree that (1) the Debentures have not been registered under the provisions of the
1933 Act and the Shares have not been registered under the 1933 Act, and may not be transferred unless (A) subsequently registered
thereunder or (B) the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration;
(2) any sale of the Securities made in reliance on Rule 144 promulgated under the 1933 Act (“Rule 144”) may be made
only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such Securities under circumstances
in which the seller, or the Person through whom the sale is made, may be deemed to be an underwriter, as that term is used in the
1933 Act, may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder,
(3) at the request of the Buyer, the Company shall, from time to time, within two (2) business days of such request, at the sole
cost and expense of the Company, either (i) deliver to its transfer agent and registrar for the Common Stock (the “Transfer
Agent”) a written letter instructing and authorizing the Transfer Agent to process transfers of the Shares at such time as
the Buyer has held the Securities for the minimum holding period permitted under Rule 144, subject to the Buyer’s providing
to the Transfer Agent certain customary representations contemporaneously with any requested transfer, or (ii) at the Buyer’s
option or if the Transfer Agent requires further confirmation of the availability of an exemption from registration, furnish to
the Buyer an opinion of the Company’s counsel in favor of the Buyer (and, at the request of the Buyer, any agent of the Buyer,
including but not limited to the Buyer’s broker or clearing firm) and the Transfer Agent, reasonably satisfactory in form,
scope and substance to the Buyer and the Transfer Agent, to the effect that a contemporaneously requested transfer of shares does
not require registration under the 1933 Act, pursuant to the 1933 Act, Rule 144 or other regulations promulgated under the 1933
Act and (4) neither the Company nor any other Person is under any obligation to register the Securities (other than pursuant to
this Agreement) under the 1933 Act or to comply with the terms and conditions of any exemption thereunder.

 

b.       Restrictive
Legend. The Buyer acknowledges and agrees that the Debentures, and, until such time as the Shares have been registered under
the 1933 Act as contemplated hereby and sold in accordance with an effective Registration Statement, certificates and other instruments
representing any of the Securities shall bear a restrictive legend in substantially the following form (and a stop-transfer order
may be placed against transfer of any such Securities):

 

    	 	12	 

    	 

    

 

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.

 

c.       
Piggy-Back Registration Rights. From and after the Signing Closing Date and until the earlier of (i) eighteen (18) months
after the Signing Closing Date or (ii) the date that the Debentures have been converted in the entirety and/or repaid in the entirety,
if the Company contemplates making an offering of Common Stock (or other equity securities convertible into or exchangeable for
Common Stock) registered for sale under the Securities Act or proposes to file a Registration Statement covering any of its securities
(other than an offering solely to implement an employee benefit plan or a transaction to
which Rule 145 of the Securities Act is applicable, or a Registration Statement on Form S-4, S-8 or any successor form thereto
or another form not available for registering the Registrable Securities for sale to the public), the Company shall at each
such time give prompt written notice to Investments and Buyer of its intention to do so and of the registration rights granted
under this Agreement; provided, however, that no such registration rights shall apply to a Registration Statement filed by the
Company within forty five (45) days of the Signing Closing Date with Maxim Group LLC acting as underwriter. Upon the written request
of Investments and/or Buyer made within fifteen (15) days after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by Investments and/or Buyer and the intended method of disposition thereof),
the Company shall, at its sole cost and expense, use its best efforts to effect the registration of all Registrable Securities
which the Company has been so requested to register Investments and/or Buyer, to the extent requisite to permit the disposition
(in accordance with the intended methods of disposition) of the Registrable Securities by Investments and/or Buyer, by inclusion
of such Registrable Securities in the Registration Statement which covers the securities which the Company proposes to register;
provided, that if the Company is unable to register the full amount of Registrable Securities in an “at the market offering”
under SEC rules and regulations due to the high percentage of the Company’s Common Stock the Registrable Securities represents
(giving effect to all other securities being registered in the Registration Statement), then the Company may reduce, on a pro rata
basis, the amount of Registrable Securities subject to the Registration Statement to a lesser amount which equals the maximum number
of Registrable Securities that the Company is permitted to register in an “at the market offering”; and provided, further,
that if, at any time after giving written notice of its intention to register any Registrable Securities and prior to the effective
date of the Registration Statement filed in connection with such registration, the Company shall determine for any reason either
not to register or to delay registration of such Registrable Securities, the Company may, at its election, give written notice
of such determination to Investments and/or the Buyer and, thereupon, (i) in the case of a determination not to register, the Company
shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its
obligation to pay the expenses of registration in connection therewith), and (ii) in the case of a determination to delay registering
such Registrable Securities, shall be permitted to delay registering any Registrable Securities, for the same period as the delay
in registering such other securities. If Buyer shall have transferred all or part of its Registrable Securities, then for purposes
of this Section, the term “Buyer” shall reference Buyer and/or such transferee(s).

 

    	 	13	 

    	 

    

 

d.       Securities
Filings. The Company undertakes and agrees to make all necessary filings (including, without limitation, a Form D) in connection
with the sale of the Securities to the Buyer required under any United States laws and regulations applicable to the Company (including
without limitation state “blue sky” laws), or by any domestic securities exchange or trading market, and to provide
a copy thereof to the Buyer promptly after such filing.

 

e.       Reporting
Status; Public Trading Market; DTC Eligibility. So long as the Buyer and/or Investments beneficially own any Securities, (i)
the Company shall timely file, prior to or on the date when due, all reports that would be required to be filed with the SEC pursuant
to Section 13 or 15(d) of the Exchange Act if the Company had securities registered under Section 12(b) or 12(g) of the Exchange
Act; (ii) the Company shall not be operated as, or report, to the SEC or any other Person, that the Company is a “shell company”
or indicate to the contrary to the SEC or any other Person; (iii) the Company shall take all other action under its control necessary
to ensure the availability of Rule 144 under the 1933 Act for the sale of Shares by the Buyer at the earliest possible date; and
(iv) the Company shall at all times while any Securities are outstanding maintain its engagement of an independent registered public
accounting firm. Except as otherwise set forth in Transaction Documents, the Company shall take all action under its control necessary
to obtain and to continue the listing and trading of its Common Stock (including, without limitation, all Registrable Securities)
on the OTC Markets, Inc., OTC Pink, OTCQB, OTCQX, Nasdaq Capital Markets, NYSE, or any other exchange (the “Principal Market”)
and will comply in all material respects with the Company’s reporting, filing and other obligations under the by-laws or
rules of the Financial Industry Regulatory Authority (“FINRA”). If, so long as the Buyer and/or Investments beneficially
own any of the Securities, the Company receives any written notice from the Principal Market, FINRA, or the SEC with respect to
either any alleged deficiency in the Company’s compliance with applicable rules and regulations (including without limitation
any comments from the SEC on any of the Company’s documents filed (or the failure to have made any such filing) under the
1933 Act or the Exchange Act) (each, a “Regulatory Notice”), then the Company shall promptly, and in any event within
two (2) business days, provide copies of the Regulatory Notice to the Buyer, and shall promptly, and in any event within ten (10)
business days of receipt of the Regulatory Notice (a “Regulatory Response”), respond in writing to the Principal Market,
FIRNA and/or SEC (as the case may be), setting forth the Company’s explanation and/or response to the issues raised in the
Regulatory Notice, with a view towards maintaining and/or regaining full compliance with the applicable rules and regulations of
the Principal Market, FIRNA and/or SEC and maintaining or regaining good standing of the Company with the Principal Market, FINRA
and/or SEC, as the case may be, the intent being to ensure that the Company maintain its reporting company status with the SEC
and that its Common Stock be and remain available for trading on the Principal Market. Further, at all times while any Securities
are outstanding, the Common Stock shall be DWAC Operational, and the Common Stock shall not be subject to any DTC “chill”
designation or similar restriction on the clearing of the Common Stock through DTC.

 

    	 	14	 

    	 

    

 

f.       Use
of Proceeds. The Company shall use the proceeds from the sale of the Debentures for working capital purposes only subject to
customary restrictions. Absent the prior written approval of a majority of the principal amount of the Debentures then outstanding,
the Company shall not use any portion of the proceeds of the sale of the Debentures to (i) repay any indebtedness or other obligation
of the Company incurred prior to the date of this Agreement outside the normal course of business, (ii) pay any dividends or redemption
amount on any of the Company’s equity or equity equivalents, (iii) pay any amounts, whether on account of debt obligations
of the Company or otherwise, except for compensation, to any officer, director or other related party of the Company or (iv) pay
deferred compensation or any compensation to any of the directors or officers of the Company in excess of the rate or amount paid
or accrued during the fiscal year ended December, 2018 (as base compensation and excluding any discretionary amounts), other than
modest increases consistent with prior practice that are approved by the Company’s Board of Directors.

 

g.       Available
Shares. Commencing on the date of execution and delivery of this Agreement, the Company shall have and maintain authorized
and reserved for issuance, free from preemptive rights, that number of shares equal to Five Hundred percent (500%) of the number
of shares of Common Stock (1) issuable based upon the conversion of the then-outstanding Debentures (including accrued interest
thereon) as may be required to satisfy the conversion rights of the Buyer pursuant to the terms and conditions of the Debenture
(for the avoidance of doubt, this shall be calculated based on the applicable conversion price that would result after the date
that is 180 calendar days after the issuance date of the respective Debenture(s) regardless of the date of calculation) (without
giving effect to the 4.99% limitation on ownership as set forth in the Debentures), provided, however that for purposes
of the foregoing calculation, the full indebtedness under the Debentures shall be deemed immediately convertible and (2) issuable
to the Buyer on future Closing Dates, based upon the lowest closing bid price per share of the Common Stock on the date before
the most recent Closing Date (as reported by Bloomberg LP) (collectively in the aggregate the “Required Reserve Amount”).
The Company shall monitor its compliance with the foregoing requirements on an ongoing basis. If at any time the Company does not
have available an amount of authorized and non-issued Shares required to be reserved pursuant to this Section, then the Company
shall, without notice or demand by the Buyer, call within thirty (30) days of such occurrence and hold within sixty (60) days of
such occurrence a special meeting of shareholders, for the sole purpose of increasing the number of shares authorized. The Board
of the Company shall recommend to shareholders to vote in favor of increasing the number of Common Stock authorized at the meeting.
The Company will use its best efforts to cause members of the Company’s management to vote all of their own shares in favor
of increasing the number of Common Stock authorized at the meeting. If the increase in authorized shares is approved by the stockholders
at the meeting, the Company shall implement the increase in authorized shares within one (1) business day following approval at
such meeting. Alternatively, to the extent permitted by applicable law, in lieu of calling and holding a meeting as described above,
the Company may, within thirty (30) days of the date when the Company does not have available an amount of authorized and non-issued
Shares required to be reserved as described above, procure the written consent of stockholders to increase the number of shares
authorized, and provide the stockholders with notice thereof as may be required under applicable law (including without limitation
Section 14(c) of the Exchange Act and Regulation 14C thereunder). Upon obtaining stockholder approval as aforesaid, the Company
shall cause the appropriate increase in its authorized shares of Common Stock within one (1) business day (or as soon thereafter
as permitted by applicable law). Company’s failure to comply with these provisions will be an Event of Default (as defined
in the Debentures).

 

    	 	15	 

    	 

    

 

h.       Reimbursement.
If (i) Buyer and/or Investments becomes a party defendant in any capacity in any action or proceeding brought by any stockholder
of the Company, in connection with or as a result of the consummation of the transactions contemplated by the Transaction Documents,
or if the Buyer and/or Investments is impleaded in any such action, proceeding or investigation by any Person, or (ii) the Buyer
and/or Investments, other than by reason of its own gross negligence, willful misconduct or breach of law (as adjudicated by a
court of law having proper jurisdiction and such adjudication is not subject to appeal), becomes a party defendant in any capacity
in any action or proceeding brought by the SEC against or involving the Company or in connection with or as a result of the consummation
of the transactions contemplated by the Transaction Documents, or if the Buyer or Investments is impleaded in any such action,
proceeding or investigation by any Person, then in any such case, the Company shall promptly reimburse the Buyer and/or Investments
for its or their reasonable legal and other expenses (including the cost of any investigation and preparation) incurred in connection
therewith. The reimbursement obligations of the Company under this paragraph shall be in addition to any liability which the Company
may otherwise have, shall extend upon the same terms and conditions to any affiliates of the Buyer and/or Investments who are actually
named in such action, proceeding or investigation, and partners, directors, agents, employees and controlling Persons (if any),
as the case may be, of the Buyer, Investments and any such Affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the Buyer, Investments and any such Affiliate and any such
Person. Except as otherwise set forth in the Transaction Documents, the Company also agrees that neither any Buyer, Investments
nor any such Affiliate, partners, directors, agents, employees or controlling Persons shall have any liability to the Company or
any Person asserting claims on behalf of or in right of the Company in connection with or as a result of the consummation of the
Transaction Documents.

 

i.       The
Company will instruct its counsel to provide the Transfer Agent and/or the Buyer, Investments or their respective brokerage and/or
clearing firm with all relevant legal opinions and other documentation requested by the Buyer or Investments in connection with
the issuance of the Conversion Shares or the Restricted Stock, or the sale thereof, to confirm the share issuance(s) such that
the Conversion Shares and/or Restricted Stock may be deposited with the applicable brokerage and/or clearing firm.

 

j.       No
Payments to Affiliates or Related Parties.  So long as any of the Debentures remain outstanding, if the Debentures are
in default, the Company shall not, absent the prior written consent of the holders of all Debentures then outstanding, make any
payments to any of the Company’s or the Subsidiaries’ respective affiliates or related parties, including without limitation
payments or prepayments of principal or interest accrued on any indebtedness or obligation in favor of affiliates or related parties. 
Notwithstanding anything to the contrary contained herein, the provisions of this Section 4(j) shall not apply to payments to the
Subsidiaries, or other businesses in which affiliates have an interest, made in the ordinary course of business and consistent
with past practice as disclosed in the SEC Documents.

 

    	 	16	 

    	 

    

 

k.       Notice
of Material Adverse Effect. The Company shall notify the Buyer (and any subsequent holder of the Debentures), as soon as practicable
and in no event later than three (3) business days of the Company’s knowledge of any Material Adverse Effect on the Company.
For purposes of the foregoing, “knowledge” means the earlier of the Company’s actual knowledge or the Company’s
constructive knowledge upon due inquiry.

 

l.       Public
Disclosure. Except to the extent required by applicable law, absent the Buyer’s prior written consent, the Company shall
not reference the name of the Buyer in any press release, securities disclosure, business plan, marketing or funding proposal.

 

m.       Nature
of Transaction; Savings Clause. It is the parties’ express understanding and agreement that the transactions contemplated
by the Transaction Documents constitute an investment and not a loan. If nonetheless such transactions are deemed to be a loan
(as adjudicated by a court of law having proper jurisdiction and such adjudication is not subject to appeal), the Company shall
not be obligated or required to pay interest at a rate that could subject Buyer to either civil or criminal liability as a result
of such rate exceeding the maximum rate that the Buyer is permitted to charge under applicable law, and the Company’s obligations
under the Transaction Documents shall not be void or voidable on the basis of the Buyer’s lack of any license or registration
as a lender with any governmental authority. It is expressly understood and agreed by the parties that neither the amounts payable
pursuant to Section 12, any redemption premium, remedy upon an Event of Default (as defined in the Debentures) or any Acceleration
Amount (as defined in the Debentures), original issue discount nor any investment returns of the Buyer on the sale of the Debentures
or the sale of any Conversion Shares (whether unrealized or realized) shall be construed as interest. If, by the terms of the Debentures,
any other Transaction Document or any other instrument, Company is at any time required or obligated to pay interest at a rate
exceeding such maximum rate, interest payable under the Debenture and/or such other Transaction Documents or other instrument shall
be computed (or recomputed) at such maximum rate, and the portion of all prior interest payments (if any) exceeding such maximum
shall be applied to payment of the outstanding principal of the Debentures.

 

n.No Integration.The
Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration
of the Securities being offered or sold hereunder under the Securities Act or cause the offering of the Securities to be integrated
with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company
or its securities.

 

o.       Corporate
Existence. The Company will, so long as the Buyer beneficially owns any of the Securities, maintain its corporate existence
and shall not sell all or substantially all of the Company’s assets.

 

    	 	17	 

    	 

    

 

5.       TRANSFER
AGENT INSTRUCTIONS.

 

a.       Transfer
Agent Instruction Letter. On or before the Signing Closing Date, the Company shall irrevocably instruct its Transfer Agent
in writing using the letter substantially in the form of Exhibit B annexed hereto, with only such modifications as the Buyer
agrees to, executed by the Company, the Buyer and the Transfer Agent (the “Transfer Agent Instruction Letter”), to
(i) reserve that number of shares of Common Stock as is required under Section 4(g) hereof, and (ii) issue Common Stock from time
to time upon conversion of the Debentures in such amounts as specified from time to time by the Buyer to the Transfer Agent in
a Notice of Conversion, in such denominations to be specified by the Buyer in connection with each conversion of the Debentures.
The Transfer Agent shall not be restricted from issuing shares from only the allotment reserved hereunder for the Conversion Amount
(as defined in the Debentures), but instead may, to the extent necessary to satisfy the amount of shares issuable upon conversion,
issue shares above and beyond the amount reserved on account of the Conversion Amount, without any additional instructions or authorization
from the Company, and the Company shall not provide the Transfer Agent with any instructions or documentation contrary to the foregoing.
As of the date of this Agreement, the Transfer Agent is West Coast Stock Transfer, Inc. The Company shall at all times while any
Debentures are outstanding engage a Transfer Agent which is a party to the Transfer Agent Instruction Letter. If for any reason
the Company’s Transfer Agent is not a signatory of the Transfer Agent Instruction Letter while any Debentures or Restricted
Stock are outstanding and held by the Buyer, then such Transfer Agent shall nonetheless be deemed bound by the Transfer Agent Instruction
Letter, and the Company shall use its best efforts to cause (i) the Transfer Agent to abide by the Transfer Agent’s obligations,
terms and agreements set forth in the Transfer Agent Instruction Letter, and will not (ii) issue any instructions to the Transfer
Agent contrary to the obligations, terms and agreements set forth in the Transfer Agent Instruction Letter. While the Debentures
are outstanding, the Company shall not terminate the Transfer Agent or otherwise change Transfer Agents without at least fifteen
(15) days prior written notice to the Buyer and with the Buyer’s prior written consent to such change, which the Buyer may
grant or withhold in its sole discretion. The Company shall continuously monitor its compliance with the share reservation requirements
and, if and to the extent necessary to increase the number of reserved shares to remain and be at least the Required Reserve Amount
to account for any decrease in the Market Price of the Common Stock, the Company shall immediately (and in any event within one
(1) business day) notify the Transfer Agent in writing of the reservation of such additional shares, provided that in the
event that the number of shares reserved for conversion of the Debentures is less than the Required Reserve Amount, the Buyer may
also directly instruct the Transfer Agent to increase the reserved shares as necessary to satisfy the minimum reserved share requirement,
and the Transfer Agent shall act accordingly, provided, further, that the Company shall within one (1) business day provide
any written confirmation, assent or documentation thereof as the Transfer Agent may request to act upon a share increase instruction
delivered by the Buyer. The Company shall provide the Buyer with a copy of all written instructions to the Company’s Transfer
Agent with respect to the reservation of shares simultaneously with the issuance of such instructions to the Transfer Agent. The
Company covenants that no instruction other than such instructions referred to in this Section 5 and stop transfer instructions
to give effect to Section 4(a) hereof prior to registration and sale of the Conversion Shares under the 1933 Act will be given
by the Company to the Transfer Agent and that the Conversion Shares shall otherwise be freely transferable on the books and records
of the Company as and to the extent provided in this Agreement and applicable law. If the Buyer provides the Company and/or the
Transfer Agent with an opinion of counsel reasonably satisfactory to the Company that registration of a resale by the Buyer of
any of the Securities in accordance with clause (1)(B) of Section 4(a) of this Agreement is not required under the 1933 Act, the
Company shall (except as provided in clause (2) of Section 4(a) of this Agreement) permit the de-legending or transfer of the Securities
and, in the case of the Conversion Shares, instruct the Company’s Transfer Agent to issue one or more certificates for Common
Stock without legend in such name and in such denominations as specified by the Buyer.

 

    	 	18	 

    	 

    

 

b.       Conversion.
(i) The Company shall permit the Buyer to exercise the right to convert the Debentures by faxing, emailing or delivering overnight
an executed and completed Notice of Conversion to the Company or the Transfer Agent. If so requested by the Buyer or the Transfer
Agent, the Company shall within one (1) business day respond with its endorsement so as to confirm the outstanding principal amount
of any Debenture submitted for conversion or shall reconcile any difference with the Buyer promptly after receiving such Notice
of Conversion.

 

(ii)       The
term “Conversion Date” means, with respect to any conversion elected by the holder of the Debentures, the date specified
in the Notice of Conversion, provided the copy of the Notice of Conversion is given either via mail or facsimile to or otherwise
delivered to the Transfer Agent and/or the Company in accordance with the provisions hereof so that it is received by the Transfer
Agent and/or the Company on or before such specified date.

 

(iii)       The
Company shall deliver (or will cause the Transfer Agent to deliver) the Conversion Shares issuable upon conversion as follows:
(1) if the Company is then DWAC Operational, via DWAC, (2) if the Common Stock is then eligible for the Depository Trust Company’s
Direct Registration System (“DRS”), if so requested by the Buyer, or (3) if the Company is not then DWAC Operational
or the Common Stock is not then eligible for DRS, in certificated form, to the Buyer at the address specified in the Notice of
Conversion (which may be the Buyer’s address for notices as contemplated by Section 10 hereof or a different address) via
express courier, in each case within two (2) business days (the “Delivery Date”) after (A) the business day on which
the Company or the Transfer Agent has received the Notice of Conversion (by facsimile, email or other delivery) or (B) the date
on which payment of interest and principal on the Debentures, which the Company has elected to pay by the issuance of Common Stock,
as contemplated by the Debentures, was due, as the case may be.

 

c.       Failure
to Timely Issue Conversion Shares or De-Legended Shares. The Company’s failure to issue and deliver Conversion Shares
to the Buyer (either by DWAC, DRS or in certificated form, as required by Section 5(b)) on or before the Delivery Date shall be
considered an Event of Default, which shall entitle the Buyer to certain remedies set forth in the Debentures and provided by applicable
law.  Similarly, the Company’s failure to issue and deliver Common Stock in unrestricted form without a restrictive
legend when permitted by applicable law and required under the Transaction Documents shall entitle the Buyer to damages for the
diminution in value (if any) of the relevant shares between the date delivery was due versus the date ultimately delivered in unrestricted
form. The Company acknowledges that its failure to timely honor a Notice of Conversion (or the occurrence of any other Event of
Default) shall cause definable financial hardship on the Buyer(s) and that the remedies set forth herein and in the Debentures
are reasonable and appropriate.

 

    	 	19	 

    	 

    

 

d.       Duties
of Company; Authorization. The Company shall inform the Transfer Agent of the reservation of shares contemplated by Section
4(g) and this Section 5, and shall keep current in its payment obligations to the Transfer Agent such that the Transfer Agent will
continue to process share transfers and the initial issuance of shares of Common Stock upon the conversion of Debentures. The Company
hereby authorizes and agrees to authorize the Transfer Agent to correspond and otherwise communicate with the Buyer or their representatives
in connection with the foregoing and other matters related to the Common Stock. Further, the Company hereby authorizes the Buyer
or its representative to provide instructions to the Transfer Agent that are consistent with the foregoing and instructs the Transfer
Agent to honor any such instructions. Should the Company fail for any reason to keep current in its payment obligations to the
Transfer Agent, the Buyer and/or Investments may pay such amounts as are necessary to compensate the Transfer Agent for performing
its duties with respect to share reservation, issuance of Conversion Shares and/or de-legending certificates representing Restricted
Stock, and all amounts so paid shall be promptly reimbursed by the Company. If not so reimbursed within thirty (30) days, such
amounts shall, at the option of the Buyer and without prior notice to or consent of the Company, be added to the principal amount
due under the Debenture(s) held by the Buyer, whereupon interest will begin to accrue on such amounts at the rate specified in
the Debentures.

 

e.       Effect
of Bankruptcy. The Buyer shall be entitled to exercise its conversion privilege with respect to the Debentures notwithstanding
the commencement of any case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”). In the event the Company
is a debtor under the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any rights to relief it may
have under 11 U.S.C. §362 in respect of the Buyer’s conversion privilege. The Company hereby waives, to the fullest
extent permitted, any rights to relief it may have under 11 U.S.C. §362 in respect of the conversion of the Debentures. The
Company agrees, without cost or expense to the Buyer, to take or to consent to any and all action necessary to effectuate relief
under 11 U.S.C. §362.

 

6.       CLOSINGS.

 

a.       Signing
Closing. Promptly upon the execution and delivery of this Agreement, the Signing Debenture and all conditions in Sections 7
and 8 herein are met (the “Signing Closing Date”), (A) the Company shall deliver to the Buyer the following: (i) the
Signing Debenture and Commitment Shares; (ii) the Transfer Agent Instruction Letter; (iii) duly executed counterparts of the Transaction
Documents; and (iv) an officer’s certificate of the Company confirming the accuracy of the Company’s representations
and warranties contained herein, and (B) the Buyer shall deliver to the Company the following: (i) the Signing Purchase Price and
(ii) duly executed counterparts of the Transaction Documents (as applicable). The Company shall immediately pay the fees due under
Section 12 of this Agreement upon receipt of the Signing Purchase Price if Buyer does not withhold such amounts from the Signing
Purchase Price pursuant to Section 12.

 

    	 	20	 

    	 

    

 

b.       Second
Closing. At any time after sixty (60) days following the Signing Closing Date, subject to the mutual agreement of the Buyer
and the Company, for the “Second Closing Date” and subject to satisfaction of the conditions set forth in Sections
7 and 8, (A) the Company shall deliver to the Buyer the following: (i) the Second Debenture; (ii) an amendment to the Transfer
Agent Instruction Letter instructing the Transfer Agent to reserve that number of shares of Common Stock as is required under Section
4(g) hereof, if necessary; and (iii) an officer’s certificate of the Company confirming, as of the Second Closing Date, the
accuracy of the Company’s representations and warranties contained herein and updating Schedules 3(b), 3(c) and 3(k)
as of the Second Closing Date, and (B) the Buyer shall deliver to the Company the Second Purchase Price.

 

c.       Additional
Investors. If, at any time after sixty (60) days following the Signing Closing Date, (i) the Company submits a request to the
Buyer with respect to the consummation of the closing of the Second Debenture and (ii) the Buyer elects not to consummate the closing
of the Second Debenture within three (3) business days of the Company’s request, then the Company may raise up to $300,000.00
from an Affiliate of the Company and/or other individual investors (but not from an entity similar to the Buyer) (the “Additional
Investors”), so long as the Additional Investors are contractually prohibited from (i) assigning such investment to any other
party as well as (ii) selling, transferring, or otherwise disposing of Common Stock issued in connection with or underlying such
investment until the Buyer no longer owns any of the Securities.

 

d.       Location
and Time of Closings. Each Closing shall be deemed to occur on the related Closing Date at the office of the Buyer’s
counsel and shall take place no later than 5:00 P.M., east coast time, on such day or such other time as is mutually agreed upon
by the Company and the Buyer.

 

7.       CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.

 

The Company’s
obligation to sell the Debentures to the Buyer pursuant to this Agreement on each Closing Date is conditioned upon:

 

a.       Purchase
Price. Delivery to the Company of good funds as payment in full of the respective Purchase Price for the Debentures at each
Closing in accordance with this Agreement;

 

b.       Representations
and Warranties; Covenants.  The accuracy on the Closing Date of the representations and warranties of the Buyer contained in
this Agreement, each as if made on such date, and the performance by the Buyer on or before such date of all covenants and agreements
of the Buyer required to be performed on or before such date; and

 

c.       Laws
and Regulations; Consents and Approvals. There shall not be in effect any law, rule or regulation prohibiting or restricting
the transactions contemplated hereby, or requiring any consent or approval which shall not have been obtained.

 

    	 	21	 

    	 

    

 

8.       CONDITIONS
TO THE BUYER’S OBLIGATION TO PURCHASE.

 

The Buyer’s obligation
to purchase the Debentures at each Closing is conditioned upon:

 

a.       Transaction
Documents. The execution and delivery of this Agreement by the Company;

 

b.       Debenture(s).
Delivery by the Company to the Buyer of the Debentures to be purchased in accordance with this Agreement;

 

c.       Section
4(a)(2) Exemption. The Debentures and the Conversion Shares shall be exempt from registration under the Securities Act of 1933
(as amended), pursuant to Section 4(a)(2) thereof;

 

d.       
DWAC Status. The Common Stock shall be DWAC Operational;

 

e.       Representations
and Warranties; Covenants. The accuracy in all material respects on the Closing Date of the representations and warranties
of the Company contained in this Agreement, each as if made on such date, and the performance by the Company on or before such
date of all covenants and agreements of the Company required to be performed on or before such date;

 

f.       Good-faith
Opinion. It should be Buyer’s reasonable belief that (i) no Event of Default under the terms of any outstanding indebtedness
of the Company shall have occurred or would likely occur with the passage of time and (ii) no material adverse change in the financial
condition or business operations of the Company shall have occurred;

 

g.       Legal
Proceedings. There shall be no litigation, criminal or civil, regulatory impairment or other legal and/or administrative proceedings
challenging or seeking to limit the Company’s ability to issue the Securities or the Common Stock;

 

h.       [Reserved];

 

i.       Corporate
Resolutions. Delivery by the Company to the Buyer a copy of resolutions of the Company’s board of directors, approving
and authorizing the execution, delivery and performance of the Transaction Documents and the transactions contemplated thereby
in the form attached hereto as Exhibit C (the “Irrevocable Resolutions”);

 

j.       Officer’s
Certificate. Delivery by the Company to the Buyer of a certificate of the Chief Executive Officer of the Company in the form
attached hereto as Exhibit D;

 

k.       Search
Results. Delivery by the Company to the Buyer of copies of UCC search reports, issued by the Secretary of State of the state
of incorporation of the Company and each Subsidiary, dated such a date as is reasonably acceptable to Buyer, listing all effective
financing statements which name the Company or Subsidiary (as applicable), under its present name and any previous names, as debtor,
together with copies of such financing statements;

 

    	 	22	 

    	 

    

 

l.       Certificate
of Good Standing. Delivery by the Company to the Buyer of a copy of a certificate of good standing with respect to the Company,
issued by the Secretary of State of the state of incorporation of the Company, dated such a date as is reasonably acceptable to
Buyer, evidencing the good standing thereof;

 

m.       Laws
and Regulations; Consents and Approvals. There shall not be in effect any law, rule or regulation prohibiting or restricting
the transactions contemplated hereby, or requiring any consent or approval which shall not have been obtained; and

 

n.       Adverse
Changes. From and after the date hereof to and including each Closing Date, (i) the trading of the Common Stock shall not have
been suspended by the SEC, FINRA, or any other governmental or self-regulatory organization, and trading in securities generally
on the Principal Market shall not have been suspended or limited, nor shall minimum prices been established for securities traded
on the Principal Market; (ii) there shall not have occurred any outbreak or escalation of hostilities involving the United States
or any material adverse change in any financial market that in either case in the reasonable judgment of the Buyer makes it impracticable
or inadvisable to purchase the Debentures.

 

9.       GOVERNING
LAW; MISCELLANEOUS. 

 

a.       MANDATORY
FORUM SELECTION. Any dispute arising under, relating to, or in connection with the Agreement or related to any matter which
is the subject of or incidental to the Agreement (whether or not such claim is based upon breach of contract or tort) shall be
subject to the exclusive jurisdiction and venue of the state COURTS located in MIAMI-DADE County, FLORIDA and/or federal courts
located in MIAMI-DADE County, FLORIDA.  This provision is intended to be a “mandatory” forum selection clause
and governed by and interpreted consistentLY with FLORIDA law.

 

b.       Governing
Law. Except in the case of the Mandatory Forum Selection clause above, this Agreement shall be delivered and accepted in and
shall be deemed to be contracts made under and governed by the internal laws of the State of Nevada, and for all purposes shall
be construed in accordance with the laws of the State of Nevada, without giving effect to the choice of law provisions. To the
extent determined by the applicable court described above, the Company shall reimburse the Buyer for any reasonable legal fees
and disbursements incurred by the Buyer in enforcement of or protection of any of its rights under any of the Transaction Documents.

 

c.       Waivers.
Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof.

 

d.       Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties
hereto.

 

    	 	23	 

    	 

    

 

e.       Construction.
All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.

 

f.       Facsimiles;
E-mails. A facsimile or email transmission of this signed Agreement or a Notice of Conversion under the Debentures shall be
legal and binding on all parties hereto. Such electronic signatures shall be the equivalent of original signatures.

 

g.       Counterparts.
This Agreement may be signed in one or more counterparts, each of which shall be deemed an original.

 

h.       Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

i.       Enforceability.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.

 

j.       Amendment.
This Agreement may be amended only by the written consent of a majority in interest of the holders of the Debentures and an instrument
in writing signed by the Company.

 

k.       Entire
Agreement. This Agreement, together with the other Transaction Documents, supersedes all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof.

 

l.       No
Strict Construction. This Agreement shall be construed as if both Parties had equal say in its drafting, and thus shall not
be construed against the drafter.

 

m.       Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

10.       NOTICES.

 

Any notice required
or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the
earliest of:

 

a.       the
date delivered, if delivered by personal delivery as against written receipt therefor or by facsimile or email transmission,

 

b.       the
third (3rd) business day after deposit, postage prepaid, in the United States Postal Service by registered or certified
mail, or

 

    	 	24	 

    	 

    

 

c.       the
first (1st) business day after deposit with a recognized courier service (e.g. FedEx, UPS, DHL, US Postal Service) for
delivery by next-day express courier, with delivery costs and fees prepaid,

 

in each case, addressed
to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate
by ten (10) days’ advance written notice similarly given to each of the other parties hereto):

 

 

	COMPANY:    	
        VerifyMe, Inc.

        75 S. Clinton Ave., Suite 510

        Rochester, NY 14604

        Attention: Patrick White, Chief Executive
        Officer

        Email: ap@verifyme.com

         

	
         

         
	
        With copies to (which shall not constitute
        notice):

         

        Harter Secrest & Emery LLP

        1600 Bausch & Lomb Place

        Rochester, NY 14604

        Attention: Alex R. McClean

        Email: amcclean@hselaw.com

         

	BUYER:	
        Peak One Opportunity Fund, L.P.

        333 South Hibiscus Drive

        Miami Beach, FL 33139

        Attention: Jason Goldstein

        Email: jgoldstein@peakoneinvestments.com

         

         

	 	
        With copies to (which shall not constitute
        notice):

         

	 	
        Anthony L.G., PLLC

        625 N. Flagler Drive, Suite 600

        West Palm Beach, FL 33401

        Attention: Chad Friend, Esq., LL.M.

        Email: CFriend@AnthonyPLLC.com

         

11.       SURVIVAL
OF REPRESENTATIONS AND WARRANTIES. The Company’s representations and warranties herein shall survive for so long as any
Debentures are outstanding, and shall inure to the benefit of the Buyer, its successors and assigns.

 

    	 	25	 

    	 

    

 

12.       FEES;
EXPENSES.

 

a.       Commitment
Fee. A non-accountable fee (the “Commitment Fee”) of Five Thousand and 00/100 Dollars ($5,000.00) on the Signing
Closing Date, shall be withheld from the purchase price of the respective debenture to cover the Buyer’s accounting fees,
legal fees, and other transactional costs incurred in connection with the transactions contemplated by this Agreement. The Commitment
Fee shall be paid on the respective closing dates if Buyer does not withhold such amounts from the respective purchase price pursuant
to Section 12(b). In addition, at the Signing Closing Date, the Company shall issue to Investments as a commitment fee, 500,000
shares of the Company’s common stock (the “Commitment Shares”).

 

b.       Disbursements.
In furtherance of the foregoing, the Company hereby authorizes the Buyer to deduct the cash portion of the Commitment Fee from
the purchase price of each Debenture and transmit same to the respective payee.

 

[Signature Page Follows]

 

    	 	26	 

    	 

    

 

IN WITNESS WHEREOF,
this Agreement has been duly executed by the Buyer and the Company as of the date first set forth above.

 

	 	COMPANY:

 

	 	VERIFYME, INC.

 

 

	 	By:   /s/ Patrick White
	 	Name: Patrick White

Title: Chief Executive Officer

	 	 	 
	 	 	 
	 	BUYER: 

 

	 	PEAK ONE OPPORTUNITY FUND, L.P.

 

	 	By:	
         Peak One Investments, LLC,

        General
Partner

         

         

         

        By: /s/ Jason Goldstein

        Name: Jason Goldstein

        Title: Managing
Member

 

 

 

 

 

[Signature Page to Securities Purchase
Agreement]

 

    	 		 

    	 

    

 

SCHEDULE 3(b)

 

 

 

 

 

COMPANY ORGANIZATION CHART

 

 

	
        Subsidiary / Affiliate 

        Name and Relationship
	Jurisdiction of Incorporation	Percentage of Ownership
	None	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

    	 		 

    	 

    

 

SCHEDULE 3(c)

 

 

 

COMPANY CAPITALIZATION TABLE

COMMON STOCK AND COMMON STOCK EQUIVALENTS

ISSUED, OUTSTANDING AND RESERVED

 

	DESCRIPTION	AMOUNT
	Authorized Capital Stock	750,000,000
	Authorized Common Stock	675,000,000
	Issued Common Stock	110,339,039
	Outstanding Common Stock	109,988,499
	Treasury Stock	350,540
	Common Stock Previously Reserved	65,860,859
	Authorized, but unissued Common Stock	498,800,102
	 	 
	Authorized Preferred Stock	75,000,000
	Issued Preferred Stock (Series B Convertible Preferred Stock)	0.85
	 	 
	Reserved for Awards under Equity Incentive Plans	16,562,500
	Reserved for Options	20,113,529
	Reserved for Convertible Debt	N/A
	Reserved for Warrants	21,962,608
	Reserved for Other Purposes (Series B Convertible Preferred Stock)	7,222,222
	 	 
	TOTAL COMMON STOCK AND COMMON STOCK EQUIVALENTS OUTSTANDING	176,199,898

 

    	 		 

    	 

    

 

EXHIBITS

 

	Exhibit A	FORM OF DEBENTURE
	 	 
	Exhibit B	FORM OF TRANSFER AGENT INSTRUCTION LETTER
	 	 
	Exhibit C	FORM OF RESOLUTIONS OF THE BOARD OF DIRECTORS
	 	 
	Exhibit D	FORM OF OFFICER’S CERTIFICATE

 

    	 		 

    	 

    

  

EXHIBIT B

 

VERIFYME, INC.

 

IRREVOCABLE TRANSFER AGENT INSTRUCTION
LETTER

 

(see attached)

 

    	 		 

    	 

    

 

VERIFYME, INC.

 

IRREVOCABLE TRANSFER AGENT INSTRUCTION
LETTER

 

 

September 18, 2019

 

West Coast Stock Transfer, Inc.

721 N. Vulcan Ave., Suite 205

Encinitas, CA 92024

 

Re: Irrevocable Instructions for Peak One
Opportunity Fund, LP and Peak One Investments, LLC

 

Ladies and Gentlemen:

 

VERIFYME, INC., a Nevada corporation (the
"Company") and Peak One Opportunity Fund, L.P. (together with its successors and assigns, the "Investor") have
entered into a securities purchase agreement dated as of September 18, 2019 (the "Agreement") providing for the issuance
of the senior secured convertible debentures, convertible into the Company’s common stock, par value $0.001 per share (“Common
Stock”) in the principal amount of up to $600,000.00 (collectively, the "Debentures"). Notwithstanding anything
herein, the instructions to the Transfer Agent (as defined herein) contained herein shall also apply to the issuance of, and removal
of restrictive legend from, any shares of the Company’s common stock issued to the Investor and/or Peak One Investments,
LLC (“Investments”) with respect to the Commitment Shares (as defined in the Agreement) or otherwise.

 

A copy of the form of the Debentures is
attached hereto. The shares of Common Stock to be issued upon conversion of the Debentures are to be registered in the name(s)
of the registered holder(s) of the Debentures submitted for conversion, or its assignees, as requested by the Investor.

 

West Coast Stock Transfer, Inc. (“West
Coast Stock Transfer, Inc.,” the “Transfer Agent” or “you”) are hereby irrevocably authorized and
instructed to reserve a sufficient number of shares of Common Stock of the Company to satisfy the Company’s share reservation
requirement of 500% of the Debentures under the Agreement (initially, 30,000,000 shares of Common Stock which should be held in
reserve for the Investor and Investments pursuant to the subject Debentures as of this date) for issuance upon conversion of any
of the Debentures referenced herein in accordance with the terms thereof (without giving effect to the 4.99% limitation on ownership,
each as set forth in the Debentures). The amount of Common Stock so reserved may be increased, from time to time, by written instructions
of the Company or the Investor. The amount of Common Stock so reserved may not be decreased without the prior written consent of
the Investor (unless such decrease in reserved shares is due to an issuance of reserved shares pursuant to the conversion of Debentures).
You will adjust the number of reserved shares accordingly, within one (1) business day of receipt of any such instructions, so
as long as there are sufficient available authorized shares.

 

    	 		 

    	 

    

 

The ability to convert the Debentures in
a timely manner is a material obligation of the Company pursuant to the Debentures. Your firm is hereby irrevocably authorized
and instructed to issue shares of Common Stock of the Company (without any restrictive legend) to the Investor at the request of
the Investor without any further action or confirmation by the Company, in which case the issuance shall be deducted against the
reserve or, if there are not enough shares held in reserve, from available authorized shares of the Company, either (i) electronically
by crediting the account of the Investor’s broker with the Depository Trust Company through its Deposit Withdrawal Agent
Commission system, provided that the Company has been made FAST/DRS eligible by DTCC (DWAC), or (ii) if requested by the Investor
or if a legal opinion is not provided to the Transfer Agent as described below, in certificated form without any legend which would
restrict the transfer of the shares, and you should remove all stop-transfer instructions relating to such shares: (A) upon your
receipt from the Investor dated within two (2) business days from the date of the issuance or transfer request, of: (i) a notice
of conversion under any of the Debentures (each a "Notice of Conversion") executed by the Investor and/or Investments;
and (ii) an opinion of counsel of the Investor or the Company, in form, substance and scope customary for opinions of counsel in
comparable transactions (and reasonably satisfactory to the Transfer Agent), to the effect that the shares of Common Stock of the
Company issued to the Investor and/or Investments pursuant to the Notice of Conversion are not "restricted securities"
and should be issued to the Investor without any restrictive legend; and (B) the number of shares to be issued is less than 4.99%
of the total issued Common Stock of the Company. If an opinion from counsel is not provided, you are instructed and authorized
to issue shares to the Investor as restricted and the associated certificate(s) should include the customary restrictive legend.
You will issue the Common Stock upon conversion within two (2) business days of receipt of a Notice of Conversion and any other
documents and information you reasonably request. The Transfer Agent must issue the shares of Common Stock to the Investor and/or
Investments, pursuant to this agreement, despite any threatened or ongoing dispute between the Company and Investor (and/or Investments),
unless there is a valid court order prohibiting such issuance.

 

The Company affirms that it has by all
appropriate corporate action irrevocably resolved to issue all required Common Stock to the investor and hereby requests that your
firm act immediately, without delay and without the need for any action or confirmation by the Company with respect to the reservation
of shares and the issuance of Common Stock pursuant to any Notice of Conversion received from the Investor and/or Investments.
You agree that the Company’s irrevocable resolutions and this irrevocable letter of instructions constitute sufficient documentation
to evidence the Company’s authorization to complete the activities contemplated hereby and that no other Company documentation
or confirmation shall be necessary or requested from the Company.

 

    	 		 

    	 

    

 

The Investor and the Company understand
that West Coast Stock Transfer, Inc. shall not be required to perform any issuances or transfers of shares if (a) the Company or
request violates, or is in material violation of, any terms of the Transfer Agent Agreement, (b) such an issuance or transfer of
shares is, in the opinion of the Transfer Agent’s legal counsel, as demonstrated by a written legal opinion addressed to
the Company and the Investor, in violation of any state or federal securities law or regulation or (c) the issuance or transfer
of shares is prohibited or stopped as required or directed by a valid court order. If the Company informs you that there is a court
order stopping issuances, then the Company agrees to provide West Coast Stock Transfer, Inc. with a copy of such court order immediately,
and a legal opinion from counsel within three (3) business days addressing the matter and, once such court order and legal opinion
are received, you will not be obligated to perform any issuances related to the Debentures and this agreement. If the Company has
an outstanding balance of fees owed to West Coast Stock Transfer, Inc. for any reason, the Investor understands West Coast Stock
Transfer, Inc. will not be obligated to issue Common Stock to the Investor unless the Company or Investor first pays all fees owed
to West Coast Stock Transfer, Inc., provided that if the Investor and/or Investments pays the fees of West Coast Stock Transfer,
Inc. for the specific issuance of Common Stock to the Investor and/or Investments under a given Notice of Conversion, then West
Coast Stock Transfer, Inc. will issue such shares notwithstanding any unpaid fees owed it by the Company for other purposes. The
Company authorizes West Coast Stock Transfer, Inc. to inform the Investor of the amount and nature of any outstanding transfer
agency fee balances owed by the Company if the Investor requests such information.

 

You are hereby authorized and directed
to promptly disclose to the Investor without any additional confirmation from the Company, after Investor’s request from
time to time, the total number of shares of Common Stock issued and outstanding, the total number of shares of Common Stock in
the float, and the total number of shares of Common Stock that are authorized but unissued and unreserved.

 

The Company shall indemnify you and your
officers, directors, principals, partners, agents and representatives, and hold each of them harmless from and against any and
all loss, liability, damage, claim or expense (including the reasonable fees and disbursements of its attorneys) incurred by or
asserted against you or any of them arising out of or in connection the instructions set forth herein, the performance of your
duties hereunder and otherwise in respect hereof, including the costs and expenses of defending yourself or themselves against
any claim or liability hereunder, except that the Company shall not be liable hereunder as to matters in respect of which it is
determined that you have acted with gross negligence or in bad faith. You shall have no liability to the Company in respect to
any action taken or any failure to act in respect of this if such action was taken or omitted to be taken in good faith, and you
shall be entitled to rely in this regard on the advice of counsel.

 

The Board of Directors of the Company has
approved the foregoing (irrevocable instructions) and does hereby extend the Company’s irrevocable agreement to indemnify
your firm and any successor transfer agent for all loss, liability or expense in carrying out the authority and direction herein
contained on the terms herein set forth.

The Investor is intended to be, and is,
a beneficiary hereof, and no amendment or modification to the instructions set forth herein may be made without the consent of
the Investor. The Transfer Agent agrees that in the event of its resignation, then the Transfer Agent will provide at least fifteen
(15) days prior written notice to the Company and the Investor. The Company shall not terminate the Transfer Agent as the Company’s
transfer agent, and the Transfer Agent shall not accept any such termination by the Company, without a signed consent from the
Investor. The Transfer Agent also agrees that if the Company requests the Transfer Agent provide records pertaining to the register
of Common Stock to any third party in what the Transfer Agent has reason to believe is in contemplation of replacing the Transfer
Agent with another party, then the Transfer Agent shall notify the Investor within two (2) business days of the Transfer Agent’s
receipt of such request.

 

    	 		 

    	 

    

 

The Company agrees that in the event it
seeks to replace or terminate the Transfer Agent, the Company shall (i) provide at least fifteen (15) days prior written notice
to the Transfer Agent and the Investor, (ii) obtain a signed written consent from the Investor, and (iii) shall cause the replacement
transfer agent to be bound by the terms and conditions of these irrevocable instructions at least ten (10) days prior to the proposed
effective date of the transition to the replacement transfer agent. The Transfer Agent shall not transfer any records or documentation
pertaining to the Common Stock to any purported successor transfer agent without the Investor’s prior written consent. Any
replacement transfer agent (whether approved by the Investor or appointed by the Company without the Investor’s prior consent
in breach of the foregoing provisions) shall automatically be bound by this Letter Agreement as if a party hereto, and any such
replacement transfer agent shall confirm in writing to the Investor within two (2) business days that it is bound by the terms
and conditions of these irrevocable instructions.

 

 

 

 

[Signature Page Follows]

 

    	 		 

    	 

    

 

Very truly yours,

 

 

VERIFYME, INC.

 

 

By: _____________________________

Name:   Patrick White

Title:     Chief Executive Officer

 

 

Acknowledged and Agreed:

 

WEST COAST STOCK TRANSFER, INC.

 

 

By: ________________________________

Name: _____________________________

Title: ______________________________

 

 

PEAK ONE OPPORTUNITY FUND, L.P.

 

	
        By: Peak One Investments, LLC,

        its General Partner

         

         

        By: ___________________________________

        Name: Jason Goldstein

        Title: Managing MemberExhibit
10.2

 

SECURITIES
PURCHASE AGREEMENT

 

THIS SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of September 18, 2019, is entered into by and between VERIFYME,
INC., a Nevada corporation, (the “Company”) and TFK INVESTMENTS, LLC,
a Nevada limited liability company (the “Buyer”).

 

WITNESSETH:

 

WHEREAS, the
Company and the Buyer are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securities
registration afforded, inter alia, by Rule 506 under Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933
Act”), and/or Section 4(a)(2) of the 1933 Act; and

 

WHEREAS, the
Buyer wishes to purchase from the Company, and the Company wishes to sell the Buyer, upon the terms and subject to the conditions
of this Agreement, securities consisting of the Company’s senior secured convertible debentures (the “Debentures”),
each of which are in the form of Exhibit A hereto, which will be convertible into shares of the Company’s common stock,
par value $0.001 per share (the “Common Stock”), in the aggregate principal amount of up to Six Hundred Thousand and
00/100 Dollars ($600,000.00), for an aggregate Purchase Price of up to Five Hundred Forty Thousand and 00/100 Dollars ($540,000.00),
all upon the terms and subject to the conditions of this Agreement, the Debentures, and other related documents;

 

NOW THEREFORE,
in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

		1.	DEFINITIONS; AGREEMENT TO PURCHASE.

 

a.            Certain
Definitions. As used herein, each of the following terms has the meaning set forth below, unless the context otherwise requires:

 

(i)           “Affiliate”
means, with respect to a specific Person referred to in the relevant provision, another Person who or which controls or is controlled
by or is under common control with such specified Person.

 

(ii)          “Certificates”
means certificates representing the Conversion Shares issuable hereunder, each duly executed on behalf of the Company and issued
hereunder.

 

(iii)         “Closing
Date” means the date on which one of the two (2) Closings are held, which are the Signing Closing Date and the Second Closing
Date.

 

(iv)         “Commitment
Fee” shall have the meaning ascribed to such term in Section 12(a).

 

    	 	 	 

    	 	 

    

 

(v)          “Commitment
Shares” shall have the meaning ascribed to such term in Section 12(a).

 

(vi)         “Common
Stock” shall have the meaning ascribed to such term in the Recitals.

 

(vii)        “Conversion
Amount” shall mean the Conversion Amount as defined in the Debentures, provided, however that for purposes of the
foregoing calculation, the full indebtedness under the Debentures shall be deemed immediately convertible, notwithstanding the
4.99% limitation on ownership set forth in the Debentures.

 

(viii)       “Conversion
Price” means the Conversion Price as defined in the Debentures.

 

(ix)         “Conversion
Shares” means the shares of Common Stock issuable upon conversion of the Debentures.

 

(x)          “DWAC
Operational” means that the Common Stock is eligible for clearing through the Depository Trust Company (“DTC”)
via the DTC’s Deposit Withdrawal Agent Commission or “DWAC” system and active and in good standing for DWAC issuance
by the Transfer Agent (as defined herein).

 

(xi)         “Dollars”
or “$” means United States Dollars.

 

(xii)        “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(xiii)       [Intentionally
Omitted].

 

(xiv)       “Irrevocable
Resolutions” has the meaning set forth in Section 8(i).

 

(xv)        “Market
Price of the Common Stock” means (x) the closing bid price of the Common Stock for the period indicated in the relevant provision
hereof (unless a different relevant period is specified in the relevant provision), as reported by Bloomberg, LP or, if not so
reported, as reported on the OTCQB, OTCQX or OTC Pink or (y) if the Common Stock is listed on a stock exchange, the closing price
on such exchange, as reported by Bloomberg LP.

 

    	 	2 	 

    	 	 

    

 

(xvi)       “Material
Adverse Effect” means a material adverse effect on the (i) business, operations or condition (financial or otherwise) or
results of operation of the Company and its Subsidiaries taken as a whole; (ii) legality, validity or enforceability of any of
the Transaction Documents; or (iii) Company’s ability to perform in any material respect on a timely basis its obligations
under the Transaction Documents. Without limiting the generality of the foregoing, the occurrence of any of the following shall
be considered a Material Adverse Effect: (i) any final money, judgment, writ or warrant of attachment, or similar process (including
an arbitral determination) in excess of One Hundred Thousand Dollars ($100,000) shall be entered or filed against the Company or
any of its Subsidiaries (including, in any event, products liability claims against the Company or its Subsidiaries), (ii) the
suspension or withdrawal of any governmental authority or permit pertaining to a material amount of the Company’s or any
Subsidiary’s products or services, (iii) the loss of and inability to replace any material insurance coverage (including,
in any case, comprehensive general liability coverage, products liability coverage or directors and officers coverage, in each
case in effect at the time of execution and delivery of this Agreement), (iv) an action by a regulatory agency or governmental
body affecting the Common Stock (including, without limitation, (1) the commencement of any regulatory investigation of which the
Company is aware, the suspension of trading of the Common Stock by the Financial Industry Regulation Authority (“FINRA”),
the SEC, the OTC Bulletin Board (“OTCBB”) or the OTC Markets Group, Inc., the failure of the Common Stock to be DTC
eligible or the placing of the Common Stock on the DTC “chill list” or (2) the engaging in any market manipulation
or other unlawful or improper trading or other activity by any Affiliate), (v) the Company’s independent registered accountants
shall resign under circumstances where a disagreement exists between the Company and its independent registered accountants, or
(vi) the Chief Executive Officer of the Company shall, for any reason (including, without limitation, termination, resignation,
retirement, death or disability) cease to act on behalf of the Company in the same role and to the same extent as his or her involvement
as of the date of execution and delivery of this Agreement.

 

(xvii)      “Person”
means any living person or any entity, such as, but not necessarily limited to, a corporation, partnership or trust.

 

(xviii)     “Purchase
Price” means the price that the Buyer pays for the Debentures at each respective Closing, which are the Signing Purchase
Price and the Second Purchase Price, as the case may be.

 

(xix)        “Registrable
Securities” shall mean the Commitment Shares, Conversion Shares, and, to the extent applicable, and any other shares of capital
stock or other securities of the Company or any successor to the Company that are issued upon exchange of Conversion Shares and/or
such Restricted Stock.

 

(xx)         “Registration
Statement” shall mean any registration statement filed or contemplated to be filed by the Company with the SEC under the
Securities Act.

 

(xxi)        “Restricted
Stock” shall mean shares of Common Stock which are not freely trading shares when issued.

 

(xxii)       “Securities”
means the Debentures, the Shares, and Commitment Shares (as defined in this Agreement).

 

(xxiii)   
  “Shares” means the Conversion Shares.

 

(xxiv)     “Second Closing Date” shall have the meaning ascribed to such term in Section 6(b).

 

    	 	3 	 

    	 	 

    

 

(xxv)      “Second
Debenture” means the second of the two (2) Debentures, in the principal amount of Three Hundred Thousand and 00/100 Dollars
($300,000.00), which is issued by the Company to the Buyer on the Second Closing Date.

 

(xxvi)     “Second
Purchase Price” shall be Two Hundred Seventy Thousand and 00/100 Dollars ($270,000.00)

 

(xxvii)    “Signing
Closing Date” shall have the meaning ascribed to such term in Section 6(a).

 

(xxviii) 
 “Signing Debenture” means the first of the two (2) Debentures, in the principal amount of Three Hundred Thousand and
00/100 Dollars ($300,000.00), to be issued by the Company to the Buyer on the Signing Closing Date.

 

(xxix)      “Signing
Purchase Price” shall be Two Hundred Seventy Thousand and 00/100 Dollars ($270,000.00).

 

(xxx)       “Subsidiary”
shall have the meaning ascribed to such term in Section 3(b).

 

(xxxi)   
  [Intentionally Omitted].

 

(xxxii)     [Intentionally Omitted].

 

(xxxiii)    [Intentionally Omitted].

 

(xxxiv)    “Transaction Documents” means, collectively, this Agreement, the Debentures, the Transfer Agent Instruction Letter,
the Irrevocable Resolutions and the other agreements, documents and instruments contemplated hereby or thereby.

 

(xxxv)     “Transfer
Agent” shall have the meaning ascribed to such term in Section 4(a).

 

(xxxvi)    “Transfer Agent Instruction Letter” shall have the meaning ascribed to such term in Section 5(a).

 

b.        Purchase
and Sale of Debentures.

 

(i)       The
Buyer agrees to purchase from the Company, and the Company agrees to sell to the Buyer, the Debentures on the terms and conditions
set forth below in this Agreement and the other Transaction Documents. The Commitment Shares shall be earned in full as an inducement
fee as of the Signing Closing Date.

 

(ii)       Subject
to the terms and conditions of this Agreement and the other Transaction Documents, the Buyer will purchase the Debentures at certain
closings (each, a “Closing”) to be held on certain respective Closing Dates.

 

c.        [Reserved]

 

    	 	4 	 

    	 	 

    

 

(i)        [Reserved]

 

(ii)       [Reserved]

 

		2.	BUYER’S REPRESENTATIONS, WARRANTIES, ETC.

 

The Buyer represents
and warrants to, and covenants and agrees with, the Company as follows:

 

a.       Investment
Purpose. Without limiting the Buyer’s right to sell the Shares pursuant to a Registration Statement, Buyer is purchasing
the Debentures, and will be acquiring the Conversion Shares, as principal for its own account for investment purposes only and
not with a view towards the public sale or distribution thereof and not with a view to or for sale in connection with any distribution
thereof. The Buyer is purchasing the Debentures in the ordinary course of its business.

 

b.       Accredited
Investor Status. Buyer is (i) an “accredited investor” as that term is defined in Rule 501 of the General Rules
and Regulations under the 1933 Act by reason of Rule 501(a)(3), (ii) experienced in making investments of the kind described in
this Agreement and the related documents, (iii) able, by reason of the business and financial experience of its officers (if an
entity) and professional advisors (who are not affiliated with or compensated in any way by the Company or any of its affiliates
or selling agents), to protect its own interests in connection with the transactions described in this Agreement, and the related
documents, and (iv) able to afford the entire loss of its investment in the Securities.

 

c.       Subsequent
Offers and Sales. Buyer understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state law. All subsequent offers and sales of the Securities by the Buyer shall be made
pursuant to registration of the Shares under the 1933 Act or pursuant to an exemption from registration and compliance with applicable
states’ securities laws.

 

d.       Reliance
on Exemptions. Buyer 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 upon the truth
and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire
the Securities.

 

e.       Information.
Buyer and its advisors have been furnished with all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities which have been requested by the Buyer. Buyer and its advisors have
been afforded the opportunity to ask questions of the Company and have received complete and satisfactory answers to any such inquiries.
Without limiting the generality of the foregoing, Buyer has also had the opportunity to obtain and to review the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2019.

 

    	 	5 	 

    	 	 

    

 

f.       Investment
Risk. Buyer understands that its investment in the securities constitutes high risk investment, its investment in the Securities
involves a high degree of risk, including the risk of loss of the Buyer’s entire investment.

 

g.       Governmental
Review. Buyer understands that no United States federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities.

 

h.       Organization;
Authorization. Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization
with full right and power to enter into and consummate the transactions contemplated by the Transaction Documents. This Agreement
and the other Transaction Documents have been duly and validly authorized, executed and delivered on behalf of the Buyer and create
a valid and binding agreement of the Buyer enforceable in accordance with its terms, subject as to enforceability to general principles
of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights
generally.

 

i.       Residency.
The state in which any offer to sell Securities hereunder was made to or accepted by the Buyer is the state shown as the Buyer’s
address contained herein, and Buyer is a resident of such state only.

 

		3.	COMPANY REPRESENTATIONS AND WARRANTIES, ETC. 

 

The Company represents
and warrants to the Buyer that:

 

a.       Concerning
the Debentures and the Shares. There are no preemptive rights of any stockholder of the Company to acquire the Debentures or
the Shares.

 

b.       Organization;
Subsidiaries; Reporting Company Status. Attached hereto as Schedule 3(b) is an organizational chart describing all of
the Company’s wholly-owned and majority-owned subsidiaries (the “Subsidiaries”) and other Affiliates, including
the relationships among the Company and such Subsidiaries, including as to each Subsidiary its jurisdiction of organization and
the percentage of ownership held by the Company, and the parent company of the Subsidiary, including the percentage of ownership
of the Company held by it. The Company and each Subsidiary is a corporation or other form of businesses entity duly organized,
validly existing and in good standing under the laws its respective jurisdiction of organization, and each of them has the requisite
corporate or other power to own its properties and to carry on its business as now being conducted. The Company and each Subsidiary
is duly qualified as a foreign corporation or other entity to do business and is in good standing in each jurisdiction where the
nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in
which the failure to so qualify would not have a Material Adverse Effect. The Common Stock is listed and traded on the OTCQB (trading
symbol: VRME). The Company has received no notice, either oral or written, from FINRA, the SEC, or any other organization, with
respect to the continued eligibility of the Common Stock for such listing, and the Company has maintained all requirements for
the continuation of such listing. The Company is an operating company in that, among other things (A) it primarily engages, wholly
or substantially, directly or indirectly through a majority owned Subsidiary or Subsidiaries, in the production or sale, or the
research or development, of a product or service other than the investment of capital, (B) it is not an individual or sole proprietorship,
(C) it is not an entity with no specific business plan or purpose and its business plan is not to engage in a merger or acquisition
with an unidentified company or companies or other entity or person, and (D) it intends to use the proceeds from the sale of the
Debentures solely for the operation of the Company’s business and uses other than personal, family, or household purposes.

 

    	 	6 	 

    	 	 

    

 

c.       Authorized
Shares. Schedule 3(c) sets forth all capital stock and derivative securities of the Company that are authorized for
issuance and that are issued and outstanding. All issued and outstanding shares of Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable. The Company has sufficient authorized and unissued shares of Common Stock as may be
necessary to effect the issuance of the Shares, assuming the prior issuance and exercise, exchange or conversion, as the case may
be, of all derivative securities authorized, as indicated in Schedule 3(c). The Shares have been duly authorized and, when
issued upon conversion of, or as interest on, the Debentures, the Shares will be duly and validly issued, fully paid and non-assessable
and will not subject the holder thereof to personal liability by reason of being such holder. At all times, the Company shall keep
available and reserved for issuance to the holders of the Debentures shares of Common Stock duly authorized for issuance against
the Debentures. As of the effective date of this Agreement, other than as reflected in the SEC Documents (as defined in this Agreement)
of the Company (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by
which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Securities.

 

d.       Authorization.
This Agreement, the issuance of the Debentures (including without limitation the incurrence of indebtedness thereunder), the
issuance of the Conversion Shares under the Debentures, and the other transactions contemplated by the Transaction Documents, have
been duly, validly and irrevocably authorized by the Company, and this Agreement has been duly executed and delivered by the Company.
The Company’s board of directors, in the exercise of its fiduciary duties, has irrevocably approved the entry into and performance
of the Transaction Documents, including, without limitation the sale of the Debentures and the issuance of Conversion Shares, based
upon a reasonable inquiry concerning the Company’s financing objectives and financial situation. Each of the Transaction
Documents, when executed and delivered by the Company, are and will be, valid, legal and binding agreements of the Company, enforceable
in accordance with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors’ rights generally.

 

    	 	7 	 

    	 	 

    

 

e.       Non-contravention.
The execution and delivery of the Transaction Documents, the issuance of the Securities and the consummation by the Company
of the other transactions contemplated by this Agreement and the Debentures (including without limitation the incurrence of indebtedness
thereunder) do not and will not conflict with or result in a breach by the Company of any of the terms or provisions of, or constitute
a default under (i) the articles of incorporation or by-laws of the Company, each as currently in effect, (ii) any indenture, mortgage,
deed of trust, or other material agreement or instrument to which the Company is a party or by which it or any of its properties
or assets are bound, including any listing agreement for the Common Stock, except as herein set forth or an event which results
in the creation of any lien, charge or encumbrance upon any assets of the Company or the triggering of any anti-dilution rights,
rights of first refusal or first offer on the part of holders of the Company’s securities, (iii) to its knowledge, any existing
applicable law, rule, or regulation or any applicable decree, judgment, or order of any court, United States federal or state regulatory
body, administrative agency, or other governmental body having jurisdiction over the Company or any of its properties or assets,
or (iv) the Company’s listing agreement for its Common Stock (if applicable), unless such conflict, breach or default would
not have a Material Adverse Effect.

 

f.       Approvals.
No authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or
stock exchange or market or the stockholders of the Company is required to be obtained by the Company for the entering into and
performing this Agreement and the other Transaction Documents (including without limitation the issuance and sale of the Securities
to the Buyer as contemplated by this Agreement) except such authorizations, approvals and consents that have been obtained, or
such authorizations, approvals and consents, the failure of which to obtain would not have a Material Adverse Effect.

 

g.       SEC
Documents; Rule 144 Status. None of the SEC Documents contained, at the time they were filed, any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein in light
of the circumstances under which they were made, not misleading. The Company has filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act
of 1934, as amended (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements
and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter
referred to herein as the “SEC Documents”). Except as disclosed to the Buyer in writing, the Company is not aware of
any event occurring on or prior to the execution and delivery of this Agreement that would require the filing of, or with respect
to which the Company intends to file, a Form 8-K after such time. The Company satisfies the requirements of Rule 144(i)(2), and
the Company shall continue to satisfy all applicable requirements of Rule 144 (or any successor thereto) for so long as any Securities
are outstanding and not registered pursuant to an effective Registration Statement filed with the SEC.

 

    	 	8 	 

    	 	 

    

 

h.       Absence
of Certain Changes. Since June 30, 2019, when viewed from the perspective of the Company and its Subsidiaries taken as a whole,
there has been no material adverse change and no material adverse development in the business, properties, operations, condition
(financial or otherwise), or results of operations of the Company and its Subsidiaries (including, without limitation, a change
or development which constitutes, or with the passage of time is reasonably likely to become, a Material Adverse Effect), except
as disclosed in the SEC Documents. Since June 30, 2019, except as provided in the SEC Documents, the Company has not (i) incurred
or become subject to any material liabilities (absolute or contingent) except liabilities incurred in the ordinary course of business
consistent with past practices; (ii) discharged or satisfied any material lien or encumbrance or paid any material obligation or
liability (absolute or contingent), other than current liabilities paid in the ordinary course of business consistent with past
practices; (iii) declared or made any payment or distribution of cash or other property to stockholders with respect to its capital
stock, or purchased or redeemed, or made any agreements to purchase or redeem, any shares of its capital stock; (iv) sold, assigned
or transferred any other tangible assets, or canceled any debts or claims, except in the ordinary course of business consistent
with past practices; (v) suffered any substantial losses or waived any rights of material value, whether or not in the ordinary
course of business, or suffered the loss of any material amount of existing business; (vi) made any changes in employee compensation,
except in the ordinary course of business consistent with past practices; or (vii) experienced any material problems with labor
or management in connection with the terms and conditions of their employment.

 

i.       Full
Disclosure. There is no fact known to the Company (other than general economic conditions known to the public generally or
as disclosed in the SEC Documents) that has not been disclosed in writing to the Buyer that (i) would reasonably be expected to
have a Material Adverse Effect, (ii) would reasonably be expected to materially and adversely affect the ability of the Company
to perform its obligations pursuant to the Transaction Documents, or (iii) would reasonably be expected to materially and adversely
affect the value of the rights granted to the Buyer in the Transaction Documents.

 

j.       Absence
of Litigation. Except as described in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board or body pending or, to the knowledge of the Company, threatened against or affecting the Company,
wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect or which would adversely affect the validity
or enforceability of, or the authority or ability of the Company to perform its obligations under, any of the Transaction Documents.
The Company is not a party to or subject to the provisions of, any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality which could reasonably be expected to have a Material Adverse Effect.

 

k.       Absence
of Liens. The Company’s assets are not encumbered by any liens or mortgages except as described in the SEC Documents.

 

l.       Absence
of Events of Default. No event of default (or its equivalent term), as defined in the respective agreement, indenture, mortgage,
deed of trust or other instrument, to which the Company is a party, and no event which, with the giving of notice or the passage
of time or both, would become an event of default (or its equivalent term) (as so defined in such document), has occurred and is
continuing, which would have a Material Adverse Effect.

 

    	 	9 	 

    	 	 

    

 

m.       No
Undisclosed Liabilities or Events. The Company has no liabilities or obligations other than those disclosed in the SEC Documents
or those incurred in the ordinary course of the Company’s business since June 30, 2019, and which individually or in the
aggregate, do not or would not have a Material Adverse Effect. No event or circumstances has occurred or exists with respect to
the Company or its properties, business, condition (financial or otherwise), or results of operations, which, under applicable
law, rule or regulation, requires public disclosure or announcement prior to the date hereof by the Company but which has not been
so publicly announced or disclosed. Except with respect to a proposal for an increase in the Company’s authorized Common
Stock, there are no proposals currently under consideration or currently anticipated to be under consideration by the Board of
Directors or the executive officers of the Company which proposal would (x) change the articles of incorporation, by-laws or any
other charter document of the Company, each as currently in effect, with or without shareholder approval, which change would reduce
or otherwise adversely affect the rights and powers of the shareholders of the Common Stock or (y) materially or substantially
change the business, assets or capital of the Company.

 

n.       No
Integrated Offering. Neither the Company nor any of its affiliates nor any Person acting on its or their behalf has, directly
or indirectly, at any time during the six month period immediately prior to the date of this Agreement made any offer or sales
of any security or solicited any offers to buy any security under circumstances that would eliminate the availability of the exemption
from registration under Rule 506 of Regulation D in connection with the offer and sale of the Securities as contemplated hereby.
Neither the Company nor any of its affiliates nor any Person acting on its or their behalf has, has directly or indirectly made
any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration
under the Securities Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be
integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder
approval provisions applicable to the Company or its securities.

 

o.       Dilution.
The number of Shares issuable upon conversion of the Debentures may increase substantially in certain circumstances, including,
but not necessarily limited to, the circumstance wherein the Market Price of the Common Stock declines prior to the conversion
of the Debentures. The Company’s executive officers and directors have studied and fully understand the nature of the securities
being sold hereby and recognize that they have a potential dilutive effect and further that the conversion of the Debentures and/or
sale of the Conversion Shares may have an adverse effect on the Market Price of the Common Stock. The Board of Directors of the
Company has concluded, in its good faith business judgment that such issuance is in the best interests of the Company. The Company
specifically acknowledges that its obligation to issue the Conversion Shares upon conversion of the Debentures is binding upon
the Company and enforceable regardless of the dilution such issuance may have on the ownership percentage of other shareholders
of the Company.

 

    	 	10 	 

    	 	 

    

 

p.       Regulatory
Permits. The Company has all such permits, easements, consents, licenses, franchises and other governmental and regulatory
authorizations from all appropriate federal, state, local or other public authorities (“Permits”) as are necessary
to own and lease its properties and conduct its businesses in all material respects in the manner described in the SEC Documents
and as currently being conducted. All such Permits are in full force and effect and the Company has fulfilled and performed all
of its material obligations with respect to such Permits, and no event has occurred that allows, or after notice or lapse of time
would allow, revocation or termination thereof or will result in any other material impairment of the rights of the holder of any
such Permit, subject in each case to such qualification as may be disclosed in the SEC Documents. Such Permits contain no restrictions
that would materially impair the ability of the Company to conduct businesses in the manner consistent with its past practices.
The Company has not received notice or otherwise has knowledge of any proceeding or action relating to the revocation or modification
of any such Permit.

 

q.       Residency.
The state in which any offer to sell Securities hereunder was made or accepted by the Seller is the state shown as the Seller’s
address contained herein.

 

r.       Hazardous
Materials. The Company is in compliance with all applicable Environmental Laws in all respects except where the failure to
comply does not have and could not reasonably be expected to have a Material Adverse Effect. For purposes of the foregoing:

 

“Environmental
Laws” means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,
the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances Control
Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, any other “Superfund” or “Superlien”
law or any other applicable federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, the environment or any Hazardous Material.

 

“Hazardous Material”
means and includes any hazardous, toxic or dangerous waste, substance or material, the generation, handling, storage, disposal,
treatment or emission of which is subject to any Environmental Law.

 

s.       Independent
Public Accountants.  The Company’s auditor is an independent registered public accounting firm with respect to the Company,
as required by the 1933 Act, the Exchange Act and the rules and regulations promulgated thereunder.

 

t.       Internal
Accounting Controls. Except as disclosed in the SEC Documents, the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (1) transactions are executed in accordance with management’s general or
specific authorization; (2) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain accountability for assets; (3) access to assets is permitted only
in accordance with management’s general or specific authorization; and (4) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

    	 	11 	 

    	 	 

    

 

u.       Brokers.
Except with respect to Maxim Group, LLC, a registered broker-dealer, no Person (other than the Buyer and its principals, employees
and agents) is entitled to receive any consideration from the Company or the Buyer arising from any finder’s agreement, brokerage
agreement or other agreement to which the Company is a party in connection with the transactions contemplated by the Transaction
Documents.

 

v.       
DWAC Operational; DRS. The Company is currently and shall remain DWAC Operational and eligible for DRS

 

		4.	CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

 

a.       Transfer
Restrictions. The parties acknowledge and agree that (1) the Debentures have not been registered under the provisions of the
1933 Act and the Shares have not been registered under the 1933 Act, and may not be transferred unless (A) subsequently registered
thereunder or (B) the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration;
(2) any sale of the Securities made in reliance on Rule 144 promulgated under the 1933 Act (“Rule 144”) may be made
only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such Securities under circumstances
in which the seller, or the Person through whom the sale is made, may be deemed to be an underwriter, as that term is used in the
1933 Act, may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder,
(3) at the request of the Buyer, the Company shall, from time to time, within two (2) business days of such request, at the sole
cost and expense of the Company, either (i) deliver to its transfer agent and registrar for the Common Stock (the “Transfer
Agent”) a written letter instructing and authorizing the Transfer Agent to process transfers of the Shares at such time as
the Buyer has held the Securities for the minimum holding period permitted under Rule 144, subject to the Buyer’s providing
to the Transfer Agent certain customary representations contemporaneously with any requested transfer, or (ii) at the Buyer’s
option or if the Transfer Agent requires further confirmation of the availability of an exemption from registration, furnish to
the Buyer an opinion of the Company’s counsel in favor of the Buyer (and, at the request of the Buyer, any agent of the Buyer,
including but not limited to the Buyer’s broker or clearing firm) and the Transfer Agent, reasonably satisfactory in form,
scope and substance to the Buyer and the Transfer Agent, to the effect that a contemporaneously requested transfer of shares does
not require registration under the 1933 Act, pursuant to the 1933 Act, Rule 144 or other regulations promulgated under the 1933
Act and (4) neither the Company nor any other Person is under any obligation to register the Securities (other than pursuant to
this Agreement) under the 1933 Act or to comply with the terms and conditions of any exemption thereunder.

 

b.       Restrictive
Legend. The Buyer acknowledges and agrees that the Debentures, and, until such time as the Shares have been registered under
the 1933 Act as contemplated hereby and sold in accordance with an effective Registration Statement, certificates and other instruments
representing any of the Securities shall bear a restrictive legend in substantially the following form (and a stop-transfer order
may be placed against transfer of any such Securities):

 

    	 	12 	 

    	 	 

    

 

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.

 

c.       
Piggy-Back Registration Rights. From and after the Signing Closing Date and until the earlier of (i) eighteen (18) months
after the Signing Closing Date or (ii) the date that the Debentures have been converted in the entirety and/or repaid in the entirety,
if the Company contemplates making an offering of Common Stock (or other equity securities convertible into or exchangeable for
Common Stock) registered for sale under the Securities Act or proposes to file a Registration Statement covering any of its securities
(other than an offering solely to implement an employee benefit plan or a transaction to
which Rule 145 of the Securities Act is applicable, or a Registration Statement on Form S-4, S-8 or any successor form thereto
or another form not available for registering the Registrable Securities for sale to the public), the Company shall at each
such time give prompt written notice to Buyer of its intention to do so and of the registration rights granted under this Agreement;
provided, however, that no such registration rights shall apply to a Registration Statement filed by the Company within forty five
(45) days of the Signing Closing Date with Maxim Group LLC acting as underwriter. Upon the written request of Buyer made within
fifteen (15) days after the receipt of any such notice (which request shall specify the Registrable Securities intended to be disposed
of by Buyer and the intended method of disposition thereof), the Company shall, at its sole cost and expense, use its best efforts
to effect the registration of all Registrable Securities which the Company has been so requested to register Buyer, to the extent
requisite to permit the disposition (in accordance with the intended methods of disposition) of the Registrable Securities by Buyer,
by inclusion of such Registrable Securities in the Registration Statement which covers the securities which the Company proposes
to register; provided, that if the Company is unable to register the full amount of Registrable Securities in an “at the
market offering” under SEC rules and regulations due to the high percentage of the Company’s Common Stock the Registrable
Securities represents (giving effect to all other securities being registered in the Registration Statement), then the Company
may reduce, on a pro rata basis, the amount of Registrable Securities subject to the Registration Statement to a lesser amount
which equals the maximum number of Registrable Securities that the Company is permitted to register in an “at the market
offering”; and provided, further, that if, at any time after giving written notice of its intention to register any Registrable
Securities and prior to the effective date of the Registration Statement filed in connection with such registration, the Company
shall determine for any reason either not to register or to delay registration of such Registrable Securities, the Company may,
at its election, give written notice of such determination to the Buyer and, thereupon, (i) in the case of a determination not
to register, the Company shall be relieved of its obligation to register any Registrable Securities in connection with such registration
(but not from its obligation to pay the expenses of registration in connection therewith), and (ii) in the case of a determination
to delay registering such Registrable Securities, shall be permitted to delay registering any Registrable Securities, for the same
period as the delay in registering such other securities. If Buyer shall have transferred all or part of its Registrable Securities,
then for purposes of this Section, the term “Buyer” shall reference Buyer and/or such transferee(s).

 

    	 	13 	 

    	 	 

    

 

d.       Securities
Filings. The Company undertakes and agrees to make all necessary filings (including, without limitation, a Form D) in connection
with the sale of the Securities to the Buyer required under any United States laws and regulations applicable to the Company (including
without limitation state “blue sky” laws), or by any domestic securities exchange or trading market, and to provide
a copy thereof to the Buyer promptly after such filing.

 

e.       Reporting
Status; Public Trading Market; DTC Eligibility. So long as the Buyer beneficially own any Securities, (i) the Company shall
timely file, prior to or on the date when due, all reports that would be required to be filed with the SEC pursuant to Section
13 or 15(d) of the Exchange Act if the Company had securities registered under Section 12(b) or 12(g) of the Exchange Act; (ii)
the Company shall not be operated as, or report, to the SEC or any other Person, that the Company is a “shell company”
or indicate to the contrary to the SEC or any other Person; (iii) the Company shall take all other action under its control necessary
to ensure the availability of Rule 144 under the 1933 Act for the sale of Shares by the Buyer at the earliest possible date; and
(iv) the Company shall at all times while any Securities are outstanding maintain its engagement of an independent registered public
accounting firm. Except as otherwise set forth in Transaction Documents, the Company shall take all action under its control necessary
to obtain and to continue the listing and trading of its Common Stock (including, without limitation, all Registrable Securities)
on the OTC Markets, Inc., OTC Pink, OTCQB, OTCQX, Nasdaq Capital Markets, NYSE, or any other exchange (the “Principal Market”)
and will comply in all material respects with the Company’s reporting, filing and other obligations under the by-laws or
rules of the Financial Industry Regulatory Authority (“FINRA”). If, so long as the Buyer beneficially own any of the
Securities, the Company receives any written notice from the Principal Market, FINRA, or the SEC with respect to either any alleged
deficiency in the Company’s compliance with applicable rules and regulations (including without limitation any comments from
the SEC on any of the Company’s documents filed (or the failure to have made any such filing) under the 1933 Act or the Exchange
Act) (each, a “Regulatory Notice”), then the Company shall promptly, and in any event within two (2) business days,
provide copies of the Regulatory Notice to the Buyer, and shall promptly, and in any event within ten (10) business days of receipt
of the Regulatory Notice (a “Regulatory Response”), respond in writing to the Principal Market, FIRNA and/or SEC (as
the case may be), setting forth the Company’s explanation and/or response to the issues raised in the Regulatory Notice,
with a view towards maintaining and/or regaining full compliance with the applicable rules and regulations of the Principal Market,
FIRNA and/or SEC and maintaining or regaining good standing of the Company with the Principal Market, FINRA and/or SEC, as the
case may be, the intent being to ensure that the Company maintain its reporting company status with the SEC and that its Common
Stock be and remain available for trading on the Principal Market. Further, at all times while any Securities are outstanding,
the Common Stock shall be DWAC Operational, and the Common Stock shall not be subject to any DTC “chill” designation
or similar restriction on the clearing of the Common Stock through DTC.

 

    	 	14 	 

    	 	 

    

 

f.       Use
of Proceeds. The Company shall use the proceeds from the sale of the Debentures for working capital purposes only subject to
customary restrictions. Absent the prior written approval of a majority of the principal amount of the Debentures then outstanding,
the Company shall not use any portion of the proceeds of the sale of the Debentures to (i) repay any indebtedness or other obligation
of the Company incurred prior to the date of this Agreement outside the normal course of business, (ii) pay any dividends or redemption
amount on any of the Company’s equity or equity equivalents, (iii) pay any amounts, whether on account of debt obligations
of the Company or otherwise, except for compensation, to any officer, director or other related party of the Company or (iv) pay
deferred compensation or any compensation to any of the directors or officers of the Company in excess of the rate or amount paid
or accrued during the fiscal year ended December, 2018 (as base compensation and excluding any discretionary amounts), other than
modest increases consistent with prior practice that are approved by the Company’s Board of Directors.

 

g.       Available
Shares. Commencing on the date of execution and delivery of this Agreement, the Company shall have and maintain authorized
and reserved for issuance, free from preemptive rights, that number of shares equal to Five Hundred percent (500%) of the number
of shares of Common Stock (1) issuable based upon the conversion of the then-outstanding Debentures (including accrued interest
thereon) as may be required to satisfy the conversion rights of the Buyer pursuant to the terms and conditions of the Debenture
(for the avoidance of doubt, this shall be calculated based on the applicable conversion price that would result after the date
that is 180 calendar days after the issuance date of the respective Debenture(s) regardless of the date of calculation) (without
giving effect to the 4.99% limitation on ownership as set forth in the Debentures), provided, however that for purposes
of the foregoing calculation, the full indebtedness under the Debentures shall be deemed immediately convertible and (2) issuable
to the Buyer on future Closing Dates, based upon the lowest closing bid price per share of the Common Stock on the date before
the most recent Closing Date (as reported by Bloomberg LP) (collectively in the aggregate the “Required Reserve Amount”).
The Company shall monitor its compliance with the foregoing requirements on an ongoing basis. If at any time the Company does not
have available an amount of authorized and non-issued Shares required to be reserved pursuant to this Section, then the Company
shall, without notice or demand by the Buyer, call within thirty (30) days of such occurrence and hold within sixty (60) days of
such occurrence a special meeting of shareholders, for the sole purpose of increasing the number of shares authorized. The Board
of the Company shall recommend to shareholders to vote in favor of increasing the number of Common Stock authorized at the meeting.
The Company will use its best efforts to cause members of the Company’s management to vote all of their own shares in favor
of increasing the number of Common Stock authorized at the meeting. If the increase in authorized shares is approved by the stockholders
at the meeting, the Company shall implement the increase in authorized shares within one (1) business day following approval at
such meeting. Alternatively, to the extent permitted by applicable law, in lieu of calling and holding a meeting as described above,
the Company may, within thirty (30) days of the date when the Company does not have available an amount of authorized and non-issued
Shares required to be reserved as described above, procure the written consent of stockholders to increase the number of shares
authorized, and provide the stockholders with notice thereof as may be required under applicable law (including without limitation
Section 14(c) of the Exchange Act and Regulation 14C thereunder). Upon obtaining stockholder approval as aforesaid, the Company
shall cause the appropriate increase in its authorized shares of Common Stock within one (1) business day (or as soon thereafter
as permitted by applicable law). Company’s failure to comply with these provisions will be an Event of Default (as defined
in the Debentures).

 

    	 	15 	 

    	 	 

    

 

h.       Reimbursement.
If (i) Buyer becomes a party defendant in any capacity in any action or proceeding brought by any stockholder of the Company,
in connection with or as a result of the consummation of the transactions contemplated by the Transaction Documents, or if the
Buyer is impleaded in any such action, proceeding or investigation by any Person, or (ii) the Buyer, other than by reason of its
own gross negligence, willful misconduct or breach of law (as adjudicated by a court of law having proper jurisdiction and such
adjudication is not subject to appeal), becomes a party defendant in any capacity in any action or proceeding brought by the SEC
against or involving the Company or in connection with or as a result of the consummation of the transactions contemplated by the
Transaction Documents, or if the Buyer is impleaded in any such action, proceeding or investigation by any Person, then in any
such case, the Company shall promptly reimburse the Buyer for its or their reasonable legal and other expenses (including the cost
of any investigation and preparation) incurred in connection therewith. The reimbursement obligations of the Company under this
paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and conditions
to any affiliates of the Buyer who are actually named in such action, proceeding or investigation, and partners, directors, agents,
employees and controlling Persons (if any), as the case may be, of the Buyer and any such Affiliate, and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company, the Buyer, and any such
Affiliate and any such Person. Except as otherwise set forth in the Transaction Documents, the Company also agrees that neither
any Buyer nor any such Affiliate, partners, directors, agents, employees or controlling Persons shall have any liability to the
Company or any Person asserting claims on behalf of or in right of the Company in connection with or as a result of the consummation
of the Transaction Documents.

 

i.       The
Company will instruct its counsel to provide the Transfer Agent and/or the Buyer, or their respective brokerage and/or clearing
firm with all relevant legal opinions and other documentation requested by the Buyer in connection with the issuance of the Conversion
Shares or the Restricted Stock, or the sale thereof, to confirm the share issuance(s) such that the Conversion Shares and/or Restricted
Stock may be deposited with the applicable brokerage and/or clearing firm.

 

j.       No
Payments to Affiliates or Related Parties.  So long as any of the Debentures remain outstanding, if the Debentures are
in default, the Company shall not, absent the prior written consent of the holders of all Debentures then outstanding, make any
payments to any of the Company’s or the Subsidiaries’ respective affiliates or related parties, including without limitation
payments or prepayments of principal or interest accrued on any indebtedness or obligation in favor of affiliates or related parties. 
Notwithstanding anything to the contrary contained herein, the provisions of this Section 4(j) shall not apply to payments to the
Subsidiaries, or other businesses in which affiliates have an interest, made in the ordinary course of business and consistent
with past practice as disclosed in the SEC Documents.

 

    	 	16 	 

    	 	 

    

 

k.       Notice
of Material Adverse Effect. The Company shall notify the Buyer (and any subsequent holder of the Debentures), as soon as practicable
and in no event later than three (3) business days of the Company’s knowledge of any Material Adverse Effect on the Company.
For purposes of the foregoing, “knowledge” means the earlier of the Company’s actual knowledge or the Company’s
constructive knowledge upon due inquiry.

 

l.       Public
Disclosure. Except to the extent required by applicable law, absent the Buyer’s prior written consent, the Company shall
not reference the name of the Buyer in any press release, securities disclosure, business plan, marketing or funding proposal.

 

m.       Nature
of Transaction; Savings Clause. It is the parties’ express understanding and agreement that the transactions contemplated
by the Transaction Documents constitute an investment and not a loan. If nonetheless such transactions are deemed to be a loan
(as adjudicated by a court of law having proper jurisdiction and such adjudication is not subject to appeal), the Company shall
not be obligated or required to pay interest at a rate that could subject Buyer to either civil or criminal liability as a result
of such rate exceeding the maximum rate that the Buyer is permitted to charge under applicable law, and the Company’s obligations
under the Transaction Documents shall not be void or voidable on the basis of the Buyer’s lack of any license or registration
as a lender with any governmental authority. It is expressly understood and agreed by the parties that neither the amounts payable
pursuant to Section 12, any redemption premium, remedy upon an Event of Default (as defined in the Debentures) or any Acceleration
Amount (as defined in the Debentures), original issue discount nor any investment returns of the Buyer on the sale of the Debentures
or the sale of any Conversion Shares (whether unrealized or realized) shall be construed as interest. If, by the terms of the Debentures,
any other Transaction Document or any other instrument, Company is at any time required or obligated to pay interest at a rate
exceeding such maximum rate, interest payable under the Debenture and/or such other Transaction Documents or other instrument shall
be computed (or recomputed) at such maximum rate, and the portion of all prior interest payments (if any) exceeding such maximum
shall be applied to payment of the outstanding principal of the Debentures.

 

n.No Integration.The
Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration
of the Securities being offered or sold hereunder under the Securities Act or cause the offering of the Securities to be integrated
with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company
or its securities.

 

o.       Corporate
Existence. The Company will, so long as the Buyer beneficially owns any of the Securities, maintain its corporate existence
and shall not sell all or substantially all of the Company’s assets.

 

    	 	17 	 

    	 	 

    

 

		5.	TRANSFER AGENT INSTRUCTIONS.

 

a.       Transfer
Agent Instruction Letter. On or before the Signing Closing Date, the Company shall irrevocably instruct its Transfer Agent
in writing using the letter substantially in the form of Exhibit B annexed hereto, with only such modifications as the Buyer
agrees to, executed by the Company, the Buyer and the Transfer Agent (the “Transfer Agent Instruction Letter”), to
(i) reserve that number of shares of Common Stock as is required under Section 4(g) hereof, and (ii) issue Common Stock from time
to time upon conversion of the Debentures in such amounts as specified from time to time by the Buyer to the Transfer Agent in
a Notice of Conversion, in such denominations to be specified by the Buyer in connection with each conversion of the Debentures.
The Transfer Agent shall not be restricted from issuing shares from only the allotment reserved hereunder for the Conversion Amount
(as defined in the Debentures), but instead may, to the extent necessary to satisfy the amount of shares issuable upon conversion,
issue shares above and beyond the amount reserved on account of the Conversion Amount, without any additional instructions or authorization
from the Company, and the Company shall not provide the Transfer Agent with any instructions or documentation contrary to the foregoing.
As of the date of this Agreement, the Transfer Agent is West Coast Stock Transfer, Inc. The Company shall at all times while any
Debentures are outstanding engage a Transfer Agent which is a party to the Transfer Agent Instruction Letter. If for any reason
the Company’s Transfer Agent is not a signatory of the Transfer Agent Instruction Letter while any Debentures or Restricted
Stock are outstanding and held by the Buyer, then such Transfer Agent shall nonetheless be deemed bound by the Transfer Agent Instruction
Letter, and the Company shall use its best efforts to cause (i) the Transfer Agent to abide by the Transfer Agent’s obligations,
terms and agreements set forth in the Transfer Agent Instruction Letter, and will not (ii) issue any instructions to the Transfer
Agent contrary to the obligations, terms and agreements set forth in the Transfer Agent Instruction Letter. While the Debentures
are outstanding, the Company shall not terminate the Transfer Agent or otherwise change Transfer Agents without at least fifteen
(15) days prior written notice to the Buyer and with the Buyer’s prior written consent to such change, which the Buyer may
grant or withhold in its sole discretion. The Company shall continuously monitor its compliance with the share reservation requirements
and, if and to the extent necessary to increase the number of reserved shares to remain and be at least the Required Reserve Amount
to account for any decrease in the Market Price of the Common Stock, the Company shall immediately (and in any event within one
(1) business day) notify the Transfer Agent in writing of the reservation of such additional shares, provided that in the
event that the number of shares reserved for conversion of the Debentures is less than the Required Reserve Amount, the Buyer may
also directly instruct the Transfer Agent to increase the reserved shares as necessary to satisfy the minimum reserved share requirement,
and the Transfer Agent shall act accordingly, provided, further, that the Company shall within one (1) business day provide
any written confirmation, assent or documentation thereof as the Transfer Agent may request to act upon a share increase instruction
delivered by the Buyer. The Company shall provide the Buyer with a copy of all written instructions to the Company’s Transfer
Agent with respect to the reservation of shares simultaneously with the issuance of such instructions to the Transfer Agent. The
Company covenants that no instruction other than such instructions referred to in this Section 5 and stop transfer instructions
to give effect to Section 4(a) hereof prior to registration and sale of the Conversion Shares under the 1933 Act will be given
by the Company to the Transfer Agent and that the Conversion Shares shall otherwise be freely transferable on the books and records
of the Company as and to the extent provided in this Agreement and applicable law. If the Buyer provides the Company and/or the
Transfer Agent with an opinion of counsel reasonably satisfactory to the Company that registration of a resale by the Buyer of
any of the Securities in accordance with clause (1)(B) of Section 4(a) of this Agreement is not required under the 1933 Act, the
Company shall (except as provided in clause (2) of Section 4(a) of this Agreement) permit the de-legending or transfer of the Securities
and, in the case of the Conversion Shares, instruct the Company’s Transfer Agent to issue one or more certificates for Common
Stock without legend in such name and in such denominations as specified by the Buyer.

 

    	 	18 	 

    	 	 

    

 

b.       Conversion.
(i) The Company shall permit the Buyer to exercise the right to convert the Debentures by faxing, emailing or delivering overnight
an executed and completed Notice of Conversion to the Company or the Transfer Agent. If so requested by the Buyer or the Transfer
Agent, the Company shall within one (1) business day respond with its endorsement so as to confirm the outstanding principal amount
of any Debenture submitted for conversion or shall reconcile any difference with the Buyer promptly after receiving such Notice
of Conversion.

 

(ii)       The
term “Conversion Date” means, with respect to any conversion elected by the holder of the Debentures, the date specified
in the Notice of Conversion, provided the copy of the Notice of Conversion is given either via mail or facsimile to or otherwise
delivered to the Transfer Agent and/or the Company in accordance with the provisions hereof so that it is received by the Transfer
Agent and/or the Company on or before such specified date.

 

(iii)      The
Company shall deliver (or will cause the Transfer Agent to deliver) the Conversion Shares issuable upon conversion as follows:
(1) if the Company is then DWAC Operational, via DWAC, (2) if the Common Stock is then eligible for the Depository Trust Company’s
Direct Registration System (“DRS”), if so requested by the Buyer, or (3) if the Company is not then DWAC Operational
or the Common Stock is not then eligible for DRS, in certificated form, to the Buyer at the address specified in the Notice of
Conversion (which may be the Buyer’s address for notices as contemplated by Section 10 hereof or a different address) via
express courier, in each case within two (2) business days (the “Delivery Date”) after (A) the business day on which
the Company or the Transfer Agent has received the Notice of Conversion (by facsimile, email or other delivery) or (B) the date
on which payment of interest and principal on the Debentures, which the Company has elected to pay by the issuance of Common Stock,
as contemplated by the Debentures, was due, as the case may be.

 

c.       Failure
to Timely Issue Conversion Shares or De-Legended Shares. The Company’s failure to issue and deliver Conversion Shares
to the Buyer (either by DWAC, DRS or in certificated form, as required by Section 5(b)) on or before the Delivery Date shall be
considered an Event of Default, which shall entitle the Buyer to certain remedies set forth in the Debentures and provided by applicable
law.  Similarly, the Company’s failure to issue and deliver Common Stock in unrestricted form without a restrictive
legend when permitted by applicable law and required under the Transaction Documents shall entitle the Buyer to damages for the
diminution in value (if any) of the relevant shares between the date delivery was due versus the date ultimately delivered in unrestricted
form. The Company acknowledges that its failure to timely honor a Notice of Conversion (or the occurrence of any other Event of
Default) shall cause definable financial hardship on the Buyer(s) and that the remedies set forth herein and in the Debentures
are reasonable and appropriate.

 

    	 	19 	 

    	 	 

    

 

d.       Duties
of Company; Authorization. The Company shall inform the Transfer Agent of the reservation of shares contemplated by Section
4(g) and this Section 5, and shall keep current in its payment obligations to the Transfer Agent such that the Transfer Agent will
continue to process share transfers and the initial issuance of shares of Common Stock upon the conversion of Debentures. The Company
hereby authorizes and agrees to authorize the Transfer Agent to correspond and otherwise communicate with the Buyer or their representatives
in connection with the foregoing and other matters related to the Common Stock. Further, the Company hereby authorizes the Buyer
or its representative to provide instructions to the Transfer Agent that are consistent with the foregoing and instructs the Transfer
Agent to honor any such instructions. Should the Company fail for any reason to keep current in its payment obligations to the
Transfer Agent, the Buyer may pay such amounts as are necessary to compensate the Transfer Agent for performing its duties with
respect to share reservation, issuance of Conversion Shares and/or de-legending certificates representing Restricted Stock, and
all amounts so paid shall be promptly reimbursed by the Company. If not so reimbursed within thirty (30) days, such amounts shall,
at the option of the Buyer and without prior notice to or consent of the Company, be added to the principal amount due under the
Debenture(s) held by the Buyer, whereupon interest will begin to accrue on such amounts at the rate specified in the Debentures.

 

e.       Effect
of Bankruptcy. The Buyer shall be entitled to exercise its conversion privilege with respect to the Debentures notwithstanding
the commencement of any case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”). In the event the Company
is a debtor under the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any rights to relief it may
have under 11 U.S.C. §362 in respect of the Buyer’s conversion privilege. The Company hereby waives, to the fullest
extent permitted, any rights to relief it may have under 11 U.S.C. §362 in respect of the conversion of the Debentures. The
Company agrees, without cost or expense to the Buyer, to take or to consent to any and all action necessary to effectuate relief
under 11 U.S.C. §362.

 

		6.	CLOSINGS. 

 

a.       Signing
Closing. Promptly upon the execution and delivery of this Agreement, the Signing Debenture and all conditions in Sections 7
and 8 herein are met (the “Signing Closing Date”), (A) the Company shall deliver to the Buyer the following: (i) the
Signing Debenture and Commitment Shares; (ii) the Transfer Agent Instruction Letter; (iii) duly executed counterparts of the Transaction
Documents; and (iv) an officer’s certificate of the Company confirming the accuracy of the Company’s representations
and warranties contained herein, and (B) the Buyer shall deliver to the Company the following: (i) the Signing Purchase Price and
(ii) duly executed counterparts of the Transaction Documents (as applicable). The Company shall immediately pay the fees due under
Section 12 of this Agreement upon receipt of the Signing Purchase Price if Buyer does not withhold such amounts from the Signing
Purchase Price pursuant to Section 12.

 

    	 	20 	 

    	 	 

    

 

b.       Second
Closing. At any time after sixty (60) days following the Signing Closing Date, subject to the mutual agreement of the Buyer
and the Company, for the “Second Closing Date” and subject to satisfaction of the conditions set forth in Sections
7 and 8, (A) the Company shall deliver to the Buyer the following: (i) the Second Debenture; (ii) an amendment to the Transfer
Agent Instruction Letter instructing the Transfer Agent to reserve that number of shares of Common Stock as is required under Section
4(g) hereof, if necessary; and (iii) an officer’s certificate of the Company confirming, as of the Second Closing Date, the
accuracy of the Company’s representations and warranties contained herein and updating Schedules 3(b), 3(c) and 3(k)
as of the Second Closing Date, and (B) the Buyer shall deliver to the Company the Second Purchase Price.

 

c.       Additional
Investors. If, at any time after sixty (60) days following the Signing Closing Date, (i) the Company submits a request to the
Buyer with respect to the consummation of the closing of the Second Debenture and (ii) the Buyer elects not to consummate the closing
of the Second Debenture within three (3) business days of the Company’s request, then the Company may raise up to $300,000.00
from an Affiliate of the Company and/or other individual investors (but not from an entity similar to the Buyer) (the “Additional
Investors”), so long as the Additional Investors are contractually prohibited from (i) assigning such investment to any other
party as well as (ii) selling, transferring, or otherwise disposing of Common Stock issued in connection with or underlying such
investment until the Buyer no longer owns any of the Securities.

 

d.       Location
and Time of Closings. Each Closing shall be deemed to occur on the related Closing Date at the office of the Buyer’s
counsel and shall take place no later than 5:00 P.M., east coast time, on such day or such other time as is mutually agreed upon
by the Company and the Buyer.

 

		7.	CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

 

The Company’s
obligation to sell the Debentures to the Buyer pursuant to this Agreement on each Closing Date is conditioned upon:

 

a.       Purchase
Price. Delivery to the Company of good funds as payment in full of the respective Purchase Price for the Debentures at each
Closing in accordance with this Agreement;

 

b.       Representations
and Warranties; Covenants.  The accuracy on the Closing Date of the representations and warranties of the Buyer contained in
this Agreement, each as if made on such date, and the performance by the Buyer on or before such date of all covenants and agreements
of the Buyer required to be performed on or before such date; and

 

c.       Laws
and Regulations; Consents and Approvals. There shall not be in effect any law, rule or regulation prohibiting or restricting
the transactions contemplated hereby, or requiring any consent or approval which shall not have been obtained.

 

    	 	21 	 

    	 	 

    

 

		8.	CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.

 

The Buyer’s obligation
to purchase the Debentures at each Closing is conditioned upon:

 

a.       Transaction
Documents. The execution and delivery of this Agreement by the Company;

 

b.       Debenture(s).
Delivery by the Company to the Buyer of the Debentures to be purchased in accordance with this Agreement;

 

c.       Section
4(a)(2) Exemption. The Debentures and the Conversion Shares shall be exempt from registration under the Securities Act of 1933
(as amended), pursuant to Section 4(a)(2) thereof;

 

d.       
DWAC Status. The Common Stock shall be DWAC Operational;

 

e.       Representations
and Warranties; Covenants. The accuracy in all material respects on the Closing Date of the representations and warranties
of the Company contained in this Agreement, each as if made on such date, and the performance by the Company on or before such
date of all covenants and agreements of the Company required to be performed on or before such date;

 

f.       Good-faith
Opinion. It should be Buyer’s reasonable belief that (i) no Event of Default under the terms of any outstanding indebtedness
of the Company shall have occurred or would likely occur with the passage of time and (ii) no material adverse change in the financial
condition or business operations of the Company shall have occurred;

 

g.       Legal
Proceedings. There shall be no litigation, criminal or civil, regulatory impairment or other legal and/or administrative proceedings
challenging or seeking to limit the Company’s ability to issue the Securities or the Common Stock;

 

h.       [Reserved];

 

i.       Corporate
Resolutions. Delivery by the Company to the Buyer a copy of resolutions of the Company’s board of directors, approving
and authorizing the execution, delivery and performance of the Transaction Documents and the transactions contemplated thereby
in the form attached hereto as Exhibit C (the “Irrevocable Resolutions”);

 

j.       Officer’s
Certificate. Delivery by the Company to the Buyer of a certificate of the Chief Executive Officer of the Company in the form
attached hereto as Exhibit D;

 

k.       Search
Results. Delivery by the Company to the Buyer of copies of UCC search reports, issued by the Secretary of State of the state
of incorporation of the Company and each Subsidiary, dated such a date as is reasonably acceptable to Buyer, listing all effective
financing statements which name the Company or Subsidiary (as applicable), under its present name and any previous names, as debtor,
together with copies of such financing statements;

 

    	 	22 	 

    	 	 

    

 

l.       Certificate
of Good Standing. Delivery by the Company to the Buyer of a copy of a certificate of good standing with respect to the Company,
issued by the Secretary of State of the state of incorporation of the Company, dated such a date as is reasonably acceptable to
Buyer, evidencing the good standing thereof;

 

m.       Laws
and Regulations; Consents and Approvals. There shall not be in effect any law, rule or regulation prohibiting or restricting
the transactions contemplated hereby, or requiring any consent or approval which shall not have been obtained; and

 

n.       Adverse
Changes. From and after the date hereof to and including each Closing Date, (i) the trading of the Common Stock shall not have
been suspended by the SEC, FINRA, or any other governmental or self-regulatory organization, and trading in securities generally
on the Principal Market shall not have been suspended or limited, nor shall minimum prices been established for securities traded
on the Principal Market; (ii) there shall not have occurred any outbreak or escalation of hostilities involving the United States
or any material adverse change in any financial market that in either case in the reasonable judgment of the Buyer makes it impracticable
or inadvisable to purchase the Debentures.

 

		9.	GOVERNING LAW; MISCELLANEOUS. 

 

a.       MANDATORY
FORUM SELECTION. Any dispute arising under, relating to, or in connection with the Agreement or related to any matter which
is the subject of or incidental to the Agreement (whether or not such claim is based upon breach of contract or tort) shall be
subject to the exclusive jurisdiction and venue of the state COURTS located in PALM BEACH County, FLORIDA and/or federal courts
located in PALM BEACH County, FLORIDA.  This provision is intended to be a “mandatory” forum selection clause
and governed by and interpreted consistentLY with FLORIDA law.

 

b.       Governing
Law. Except in the case of the Mandatory Forum Selection clause above, this Agreement shall be delivered and accepted in and
shall be deemed to be contracts made under and governed by the internal laws of the State of Nevada, and for all purposes shall
be construed in accordance with the laws of the State of Nevada, without giving effect to the choice of law provisions. To the
extent determined by the applicable court described above, the Company shall reimburse the Buyer for any reasonable legal fees
and disbursements incurred by the Buyer in enforcement of or protection of any of its rights under any of the Transaction Documents.

 

c.       Waivers.
Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof.

 

d.       Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties
hereto.

 

    	 	23 	 

    	 	 

    

 

e.       Construction.
All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.

 

f.       Facsimiles;
E-mails. A facsimile or email transmission of this signed Agreement or a Notice of Conversion under the Debentures shall be
legal and binding on all parties hereto. Such electronic signatures shall be the equivalent of original signatures.

 

g.       Counterparts.
This Agreement may be signed in one or more counterparts, each of which shall be deemed an original.

 

h.       Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

i.       Enforceability.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.

 

j.       Amendment.
This Agreement may be amended only by the written consent of a majority in interest of the holders of the Debentures and an instrument
in writing signed by the Company.

 

k.       Entire
Agreement. This Agreement, together with the other Transaction Documents, supersedes all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof.

 

l.       No
Strict Construction. This Agreement shall be construed as if both Parties had equal say in its drafting, and thus shall not
be construed against the drafter.

 

m.       Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

		10.	NOTICES.

 

Any notice required
or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the
earliest of:

 

a.       the
date delivered, if delivered by personal delivery as against written receipt therefor or by facsimile or email transmission,

 

b.       the
third (3rd) business day after deposit, postage prepaid, in the United States Postal Service by registered or certified
mail, or

 

    	 	24 	 

    	 	 

    

 

c.       the
first (1st) business day after deposit with a recognized courier service (e.g. FedEx, UPS, DHL, US Postal Service) for
delivery by next-day express courier, with delivery costs and fees prepaid,

 

in each case, addressed
to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate
by ten (10) days’ advance written notice similarly given to each of the other parties hereto):

 

 

	COMPANY:    	
        VerifyMe, Inc.

        75 S. Clinton Ave., Suite 510

        Rochester, NY 14604

        Attention: Patrick White, Chief Executive
        Officer

        Email: ap@verifyme.com

         

	
         

         
	
        With copies to (which shall not constitute
        notice):

         

        Harter Secrest & Emery LLP

        1600 Bausch & Lomb Place

        Rochester, NY 14604

        Attention: Alex R. McClean

        Email: amcclean@hselaw.com

         

	BUYER:	
        TFK INVESTMENTS, LLC

        1500 NW 10th Ave., Suite 101

        Boca Raton, FL 33486

        Attention: Chad Friend

        Email: Chad@TFKInvestments.com

         

11.       SURVIVAL
OF REPRESENTATIONS AND WARRANTIES. The Company’s representations and warranties herein shall survive for so long as any
Debentures are outstanding, and shall inure to the benefit of the Buyer, its successors and assigns.

 

12.       FEES;
EXPENSES.

 

a.       Commitment
Fee. A non-accountable fee (the “Commitment Fee”) of Five Thousand and 00/100 Dollars ($5,000.00) on the Signing
Closing Date, shall be withheld from the purchase price of the respective debenture to cover the Buyer’s accounting fees,
legal fees, and other transactional costs incurred in connection with the transactions contemplated by this Agreement. The Commitment
Fee shall be paid on the respective closing dates if Buyer does not withhold such amounts from the respective purchase price pursuant
to Section 12(b). In addition, at the Signing Closing Date, the Company shall issue to the Buyer as a commitment fee, 500,000 shares
of the Company’s common stock (the “Commitment Shares”).

 

    	 	25 	 

    	 	 

    

 

b.       Disbursements.
In furtherance of the foregoing, the Company hereby authorizes the Buyer to deduct the cash portion of the Commitment Fee from
the purchase price of the Debenture.

 

[Signature Page Follows]
 

    	 	26 	 

    	 	 

    
 

IN WITNESS WHEREOF,
this Agreement has been duly executed by the Buyer and the Company as of the date first set forth above.

 

	 	
        COMPANY:

         

	 	
        VERIFYME,
        INC.

         

         

	 	By:   /s/ Patrick White
	 	
        Name:    Patrick White

        Title:      Chief Executive Officer

	 	 
	 	 
	 	
        BUYER: 

         

	 	
        TFK INVESTMENTS, LLC

         

         

	 	By:   /s/ Chad Friend
	 	
        Name:    Chad Friend

        Title:     Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Securities Purchase
Agreement]

 

    	 		 

    	 	 

    

 

SCHEDULE 3(b)

 

 

 

 

 

COMPANY ORGANIZATION CHART

 

 

	
        Subsidiary / Affiliate 

        Name and Relationship
	Jurisdiction of Incorporation	Percentage of Ownership
	None	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

    	 		 

    	 	 

    

 

SCHEDULE 3(c)

 

 

COMPANY CAPITALIZATION TABLE

COMMON STOCK AND COMMON STOCK EQUIVALENTS

ISSUED, OUTSTANDING AND RESERVED

 

	DESCRIPTION	AMOUNT
	Authorized Capital Stock	750,000,000
	Authorized Common Stock	675,000,000
	Issued Common Stock	110,339,039
	Outstanding Common Stock	109,988,499
	Treasury Stock	350,540
	Common Stock Previously Reserved	65,860,859
	Authorized, but unissued Common Stock	498,800,102
	 	 
	Authorized Preferred Stock	75,000,000
	Issued Preferred Stock (Series B Convertible 

Preferred Stock)	0.85
	 	 
	Reserved for Awards under Equity Incentive Plans	16,562,500
	Reserved for Options	20,113,529
	Reserved for Convertible Debt	N/A
	Reserved for Warrants	21,962,608
	Reserved for Other Purposes (Series B Convertible 

Preferred Stock)	7,222,222
	 	 
	TOTAL COMMON STOCK AND COMMON 

STOCK EQUIVALENTS OUTSTANDING	176,199,898

 

    	 		 

    	 	 

    

 

EXHIBITS

 

	Exhibit A	FORM OF DEBENTURE 
	 	 
	Exhibit B	FORM OF TRANSFER AGENT INSTRUCTION LETTER
	 	 
	Exhibit C	FORM OF RESOLUTIONS OF THE BOARD OF DIRECTORS
	 	 
	Exhibit D	FORM OF OFFICER’S CERTIFICATE

 

    	 		 

    	 	 

    

  

EXHIBIT B

 

VERIFYME, INC.

 

IRREVOCABLE TRANSFER AGENT INSTRUCTION
LETTER

 

(see attached)

 

    	 		 

    	 	 

    

  

VERIFYME, INC.

 

IRREVOCABLE TRANSFER AGENT INSTRUCTION
LETTER

 

 

September 18, 2019

 

West Coast Stock Transfer, Inc.

721 N. Vulcan Ave., Suite 205

Encinitas, CA 92024

 

Re: Irrevocable Instructions for TFK Investments,
LLC

 

Ladies and Gentlemen:

 

VERIFYME, INC., a Nevada corporation (the
"Company") and TFK Investments, LLC (together with its successors and assigns, the "Investor") have entered
into a securities purchase agreement dated as of September 18, 2019 (the "Agreement") providing for the issuance of the
senior secured convertible debentures, convertible into the Company’s common stock, par value $0.001 per share (“Common
Stock”) in the principal amount of up to $600,000.00 (collectively, the "Debentures"). Notwithstanding anything
herein, the instructions to the Transfer Agent (as defined herein) contained herein shall also apply to the issuance of, and removal
of restrictive legend from, any shares of the Company’s common stock issued to the Investor with respect to the Commitment
Shares (as defined in the Agreement) or otherwise.

 

A copy of the form of the Debentures is
attached hereto. The shares of Common Stock to be issued upon conversion of the Debentures are to be registered in the name(s)
of the registered holder(s) of the Debentures submitted for conversion, or its assignees, as requested by the Investor.

 

West Coast Stock Transfer, Inc. (“West
Coast Stock Transfer, Inc.,” the “Transfer Agent” or “you”) are hereby irrevocably authorized and
instructed to reserve a sufficient number of shares of Common Stock of the Company to satisfy the Company’s share reservation
requirement of 500% of the Debentures under the Agreement (initially, 30,000,000 shares of Common Stock which should be held in
reserve for the Investor pursuant to the subject Debentures as of this date) for issuance upon conversion of any of the Debentures
referenced herein in accordance with the terms thereof (without giving effect to the 4.99% limitation on ownership, each as set
forth in the Debentures). The amount of Common Stock so reserved may be increased, from time to time, by written instructions of
the Company or the Investor. The amount of Common Stock so reserved may not be decreased without the prior written consent of the
Investor (unless such decrease in reserved shares is due to an issuance of reserved shares pursuant to the conversion of Debentures).
You will adjust the number of reserved shares accordingly, within one (1) business day of receipt of any such instructions, so
as long as there are sufficient available authorized shares.

 

    	 		 

    	 	 

    

 

The ability to convert the Debentures in
a timely manner is a material obligation of the Company pursuant to the Debentures. Your firm is hereby irrevocably authorized
and instructed to issue shares of Common Stock of the Company (without any restrictive legend) to the Investor at the request of
the Investor without any further action or confirmation by the Company, in which case the issuance shall be deducted against the
reserve or, if there are not enough shares held in reserve, from available authorized shares of the Company, either (i) electronically
by crediting the account of the Investor’s broker with the Depository Trust Company through its Deposit Withdrawal Agent
Commission system, provided that the Company has been made FAST/DRS eligible by DTCC (DWAC), or (ii) if requested by the Investor
or if a legal opinion is not provided to the Transfer Agent as described below, in certificated form without any legend which would
restrict the transfer of the shares, and you should remove all stop-transfer instructions relating to such shares: (A) upon your
receipt from the Investor dated within two (2) business days from the date of the issuance or transfer request, of: (i) a notice
of conversion under any of the Debentures (each a "Notice of Conversion") executed by the Investor; and (ii) an opinion
of counsel of the Investor or the Company, in form, substance and scope customary for opinions of counsel in comparable transactions
(and reasonably satisfactory to the Transfer Agent), to the effect that the shares of Common Stock of the Company issued to the
Investor pursuant to the Notice of Conversion are not "restricted securities" and should be issued to the Investor without
any restrictive legend; and (B) the number of shares to be issued is less than 4.99% of the total issued Common Stock of the Company.
If an opinion from counsel is not provided, you are instructed and authorized to issue shares to the Investor as restricted and
the associated certificate(s) should include the customary restrictive legend. You will issue the Common Stock upon conversion
within two (2) business days of receipt of a Notice of Conversion and any other documents and information you reasonably request.
The Transfer Agent must issue the shares of Common Stock to the Investor, pursuant to this agreement, despite any threatened or
ongoing dispute between the Company and Investor, unless there is a valid court order prohibiting such issuance.

 

The Company affirms that it has by all
appropriate corporate action irrevocably resolved to issue all required Common Stock to the investor and hereby requests that your
firm act immediately, without delay and without the need for any action or confirmation by the Company with respect to the reservation
of shares and the issuance of Common Stock pursuant to any Notice of Conversion received from the Investor. You agree that the
Company’s irrevocable resolutions and this irrevocable letter of instructions constitute sufficient documentation to evidence
the Company’s authorization to complete the activities contemplated hereby and that no other Company documentation or confirmation
shall be necessary or requested from the Company.

 

The Investor and the Company understand
that West Coast Stock Transfer, Inc. shall not be required to perform any issuances or transfers of shares if (a) the Company or
request violates, or is in material violation of, any terms of the Transfer Agent Agreement, (b) such an issuance or transfer of
shares is, in the opinion of the Transfer Agent’s legal counsel, as demonstrated by a written legal opinion addressed to
the Company and the Investor, in violation of any state or federal securities law or regulation or (c) the issuance or transfer
of shares is prohibited or stopped as required or directed by a valid court order. If the Company informs you that there is a court
order stopping issuances, then the Company agrees to provide West Coast Stock Transfer, Inc. with a copy of such court order immediately,
and a legal opinion from counsel within three (3) business days addressing the matter and, once such court order and legal opinion
are received, you will not be obligated to perform any issuances related to the Debentures and this agreement. If the Company has
an outstanding balance of fees owed to West Coast Stock Transfer, Inc. for any reason, the Investor understands West Coast Stock
Transfer, Inc. will not be obligated to issue Common Stock to the Investor unless the Company or Investor first pays all fees owed
to West Coast Stock Transfer, Inc., provided that if the Investor pays the fees of West Coast Stock Transfer, Inc. for the specific
issuance of Common Stock to the Investor under a given Notice of Conversion, then West Coast Stock Transfer, Inc. will issue such
shares notwithstanding any unpaid fees owed it by the Company for other purposes. The Company authorizes West Coast Stock Transfer,
Inc. to inform the Investor of the amount and nature of any outstanding transfer agency fee balances owed by the Company if the
Investor requests such information.

 

    	 		 

    	 	 

    

 

You are hereby authorized and directed
to promptly disclose to the Investor without any additional confirmation from the Company, after Investor’s request from
time to time, the total number of shares of Common Stock issued and outstanding, the total number of shares of Common Stock in
the float, and the total number of shares of Common Stock that are authorized but unissued and unreserved.

 

The Company shall indemnify you and your
officers, directors, principals, partners, agents and representatives, and hold each of them harmless from and against any and
all loss, liability, damage, claim or expense (including the reasonable fees and disbursements of its attorneys) incurred by or
asserted against you or any of them arising out of or in connection the instructions set forth herein, the performance of your
duties hereunder and otherwise in respect hereof, including the costs and expenses of defending yourself or themselves against
any claim or liability hereunder, except that the Company shall not be liable hereunder as to matters in respect of which it is
determined that you have acted with gross negligence or in bad faith. You shall have no liability to the Company in respect to
any action taken or any failure to act in respect of this if such action was taken or omitted to be taken in good faith, and you
shall be entitled to rely in this regard on the advice of counsel.

 

The Board of Directors of the Company has
approved the foregoing (irrevocable instructions) and does hereby extend the Company’s irrevocable agreement to indemnify
your firm and any successor transfer agent for all loss, liability or expense in carrying out the authority and direction herein
contained on the terms herein set forth.

The Investor is intended to be, and is,
a beneficiary hereof, and no amendment or modification to the instructions set forth herein may be made without the consent of
the Investor. The Transfer Agent agrees that in the event of its resignation, then the Transfer Agent will provide at least fifteen
(15) days prior written notice to the Company and the Investor. The Company shall not terminate the Transfer Agent as the Company’s
transfer agent, and the Transfer Agent shall not accept any such termination by the Company, without a signed consent from the
Investor. The Transfer Agent also agrees that if the Company requests the Transfer Agent provide records pertaining to the register
of Common Stock to any third party in what the Transfer Agent has reason to believe is in contemplation of replacing the Transfer
Agent with another party, then the Transfer Agent shall notify the Investor within two (2) business days of the Transfer Agent’s
receipt of such request.

 

    	 		 

    	 	 

    

 

The Company agrees that in the event it
seeks to replace or terminate the Transfer Agent, the Company shall (i) provide at least fifteen (15) days prior written notice
to the Transfer Agent and the Investor, (ii) obtain a signed written consent from the Investor, and (iii) shall cause the replacement
transfer agent to be bound by the terms and conditions of these irrevocable instructions at least ten (10) days prior to the proposed
effective date of the transition to the replacement transfer agent. The Transfer Agent shall not transfer any records or documentation
pertaining to the Common Stock to any purported successor transfer agent without the Investor’s prior written consent. Any
replacement transfer agent (whether approved by the Investor or appointed by the Company without the Investor’s prior consent
in breach of the foregoing provisions) shall automatically be bound by this Letter Agreement as if a party hereto, and any such
replacement transfer agent shall confirm in writing to the Investor within two (2) business days that it is bound by the terms
and conditions of these irrevocable instructions.

 

 

 

 

[Signature Page Follows]

 

    	 		 

    	 	 

    

 

Very truly yours,

 

 

	VERIFYME, INC.
	 	 	 
	 	 	 
	By: 	 	 
	Name:  	Patrick White	 
	Title:	Chief Executive Officer	 
	 	 	 
	 	 	 
	Acknowledged and Agreed:
	 	 	 
	WEST COAST STOCK TRANSFER, INC.
	 	 	 
	 	 	 
	By: 	 	 
	Name: 	 	 
	Title:  	 	 
	 	 	 
	 	 	 
	TFK INVESTMENTS, LLC
	 	 	 
	 	 	 
	By:  	 	 
	Name:	 	 
	Title:

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