Document:

Exhibit
10.1

 

EXECUTION
COPY

 

EXCHANGE
AGREEMENT

 

THIS
EXCHANGE AGREEMENT (the "Agreement") is dated this seventh day of April, 2015, by and among INTERCLOUD
SYSTEMS, INC., a Delaware corporation (the "Company") and the investor set forth on the signature
pages hereto (the "Holder"). Capitalized terms not defined herein shall have the meaning as set forth
in the Warrants (as defined below).

 

WHEREAS,
the Holder and certain other investors (the "Buyers") beneficially own and hold certain Warrants to Purchase
Common Stock, issued by the Company on October 8, 2014 (the "October Warrants");

 

WHEREAS,
the Holder also beneficially owns and holds (x) certain Warrants to Purchase Common Stock, issued by the Company to the Holder
on April 15, 2014 (the "Existing April Warrants") exercisable into such aggregate number of shares of
common stock of the Company, par value $0.001 per share (the "Common Stock") as set forth on the signature
page of the Holder hereto and (y) certain Warrants to Purchase Common Stock, issued by the Company to the Holder on July 1, 2014
(the "Existing July Warrants", and together with the Existing April Warrants, the "Existing Other
Warrants") exercisable into such aggregate number of shares of Common Stock as set forth on the signature page of the
Holder hereto;

 

WHEREAS,
the Holder desires to exchange, and the Company desires to issue, on the terms and conditions set forth in this Agreement: (a)
the October Warrants of the Holder (the "Existing October Warrants", and together with the Existing Other Warrants,
the "Existing Warrants"), exercisable into such aggregate number of shares of Common Stock as set forth
on the signature page of the Holder hereto, for (i) such aggregate number of shares of Common Stock (the "Exchange Shares"),
as set forth and memorialized on Exhibit A hereto (such aggregate number, the "Exchange Share Amount")
and (ii) the right to receive the Make-Whole Amount (as defined below), if any, (b) the Existing April Warrants for an identical
number of Warrants to Purchase Common Stock in the form attached hereto as Exhibit B-1 (the "Exchange April
Warrant", as exercised, the "Exchange April Warrant Shares") and (c) the Existing July
Warrants for an identical number of Warrants to Purchase Common Stock in the form attached hereto as Exhibit 13-2
(the "Exchange July Warrant", as exercised, the "Exchange July Warrant Shares"). The
Exchange April Warrant and the Exchange July Warrant are collectively referred to herein as the "Exchange Warrants"),
the Exchange April Warrant Shares and the Exchange July Warrant Shares are collectively referred to herein as the "Exchange
Warrant Shares") and the Exchange Shares, the Exchange Warrants and the Exchange Warrant Shares are collectively
referred to herein as the "Securities"; and

 

WHEREAS,
the reliance upon the representations made by the Holder and the Company in this Agreement, the transactions contemplated by this
Agreement are such that the offer and exchange of securities by the Company under this Agreement will be exempt from registration
under applicable United States securities laws as a result of this  exchange offer being undertaken pursuant to Section
3(a)(9) of the Securities Act of 1933, as amended (the "Securities Act").

 

    	 

    	 

    

 

NOW,
THEREFORE, in consideration of the terms and conditions contained herein, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Company and the Holder hereby agree as follows:

 

Section
1. Exchange. Subject to and upon the terms and conditions set forth in this Agreement, the Company and the Holder hereby
agree to exchange (a) the Existing October Warrant for (i) the Exchange Shares and (ii) the right to receive the Make-Whole Amount,
if any, and (b) the Existing Other Warrants for the Exchange Warrants (collectively, the "Exchange"). For the
avoidance of doubt, the parties acknowledge and agree that, other than the exercise price of the Existing Other Warrants (which
exercise price shall be $5.00 (as adjusted for stock splits, stock dividends, recapitalizations and similar events) in the Exchange
Warrants), each of the Existing Other Warrants and each of the related Exchange Warrants shall be identical in all material respects,
including, without limitation, number of shares of Common Stock issuable upon exercise thereof.

 

1.1
Closing. On the Closing Date (as defined below), the Company will issue and deliver (or cause to be issued and delivered)
certificates evidencing the issuance of the Exchange Shares and the Exchange Warrants to the Holder (the "Exchange
Certificates"), or in the name of a custodian or nominee of the Holder, or as otherwise requested by the Holder
in writing. The Holder shall deliver or cause to be delivered to the Company (or its designee) the Existing Warrants as soon as
commercially practicable following the Closing Date. Immediately following the issuance of the Exchange Shares and the Exchange
Warrants and delivery of the Exchange Certificates to the Holder (or its designee) (such time, the "Delivery Time"),
the Existing Warrants shall be cancelled. The closing of the Exchange shall occur on such date as the parties may mutually agree
in writing (the "Closing Date"), subject to the provisions of Section 4 and Section 5 herein.

 

1.2
Section 3(a)(9). Assuming the accuracy of the representations and warranties of each of the Company and the Holder set
forth in Sections 2 and 3 of this Agreement, the parties acknowledge and agree that the purpose of such representations and warranties
is, among other things, to ensure that the Exchange qualifies as an exchange of securities under Section 3(a)(9) of the Securities
Act.

 

1.3
Make-Whole Amount. On July 1, 2015 (or such other date as the Company and the Holder shall mutually agree) the Company
shall pay to the Holder (or its designee) a cash amount (the "Make-Whole Amount"), by wire transfer in
U.S. dollars and immediately available funds, if any, equal to the greater of (a) zero (0) and (b) the difference of (1) $5,175,000
less (ii) the product of (x) the Exchange Share Amount and (y) the quotient of (A) the sum of each of the thirty lowest VWAP of
the Common Stock during the period commencing on, and including, April 8, 2015 and ending, and including, June 30, 2015 (the "Measuring
Period"), divided by (B) thirty (30) (all such determinations to be appropriately adjusted for any stock split,
stock dividend, stock combination or other similar transaction during any such Measuring Period); provided that the parties may,
by mutual agreement, reduce such Measuring Period to any such shorter period as the parties shall mutually agree, mutatis mutandis.

 

    	2

    	 

    

 

1.4
Legends. The Holder understands that, after the Closing Date, the Exchange Shares and the Exchange Warrants will have been
issued (or will be issued in the case of the Exchange Warrant Shares) pursuant to an exemption from registration or qualification
under the Securities Act and applicable state securities laws, and except as set forth below, the Securities shall bear any legend
as required by the "blue sky" laws of any state and a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such stock certificates):

 

[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.

 

    	3

    	 

    

 

1.5
Removal of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section
1.4 above or any other legend (i) while a registration statement covering the resale of such Securities is effective under the
Securities Act, (ii) following any sale of such Securities pursuant to Rule 144 of the Securities Act ("Rule 144")
(assuming the transferor is not an affiliate of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred
without limitation under Rule 144 (provided that the Holder provides the Company with reasonable assurances that such Securities
are eligible for sale, assignment or transfer under Rule 144 which shall not include an opinion of the Holder's counsel), (iv)
in connection with a sale, assignment or other transfer (other than under Rule 144), provided that the Holder provides the Company
with an opinion of counsel to the Holder, in a generally acceptable form, to the effect that such sale, assignment or transfer
of the Securities may be made without registration under the applicable requirements of the Securities Act or (v) if such legend
is not required under applicable requirements of the Securities Act (including, without limitation, controlling judicial interpretations
and pronouncements issued by the Securities and Exchange Commission). If a legend is not required pursuant to the foregoing, the
Company shall no later than three (3) Trading Days (or such earlier date as required pursuant to the Exchange Act or other applicable
law, rule or regulation for the settlement of a trade initiated on the date the Holder delivers such legended certificate representing
such Securities to the Company) following the delivery by the Holder to the Company or the transfer agent (with notice to the
Company) of a legended certificate representing such Securities (endorsed or with stock powers attached, signatures guaranteed,
and otherwise in form necessary to affect the reissuance and/or transfer, if applicable), together with any other deliveries from
the Holder as may be required above in this Section 1.4, as directed by the Holder, either: (A) provided that the Company's transfer
agent is participating in the DTC Fast Automated Securities Transfer Program and such Securities are Exchange Shares or Exchange
Warrant Shares, credit the aggregate number of shares of Common Stock to which the Holder shall be entitled to the Holder's or
its designee's balance account with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company's transfer agent
is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier)
to the Holder, a certificate representing such Securities that is free from all restrictive and other legends, registered in the
name of the Holder or its designee (the date by which such credit is so required to be made to the balance account of the Holder's
or the Holder's designee with DTC or such certificate is required to be delivered to the Holder pursuant to the foregoing is referred
to herein as the "Required Delivery Date", and the date such shares of Common Stock are actually delivered
without restrictive legend to the Holder or the Holder's designee with DTC, as applicable, the "Share Delivery Date").
The Company shall be responsible for any transfer agent fees or DTC fees with respect to any issuance of Securities or the removal
of any legends with respect to any Securities in accordance herewith.

 

    	4

    	 

    

 

1.6
Failure to Timely Deliver; Buy-In. If the Company fails, for any reason or for no reason, to issue and deliver (or cause
to be delivered) to the Holder (or its designee) by the Required Delivery Date, if the Transfer Agent is not participating in
the DTC Fast Automated Securities Transfer Program, a certificate for the number of Exchange Shares or Exchange Warrant Shares
(as the case may be) to which the Holder is entitled and register such Exchange Shares or Exchange Warrant Shares (as the case
may be) on the Company's share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer
Program, to credit the balance account of the Holder or the Holder's designee with DTC for such number of Exchange Shares or Exchange
Warrant Shares (as the case may be) submitted for legend removal by the Holder pursuant to Section 1.4 above (a "Delivery
Failure"), and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares
of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock submitted for legend removal by the
Holder pursuant to Section 1.4 above that the Holder anticipated receiving from the Company (a "Buy-In"), then
the Company shall, within three (3) Trading Days after the Holder's request and in the Holder's discretion, either (i) pay cash
to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any) for the shares of Common Stock so purchased) (the "Buy-In Price"), at which point the
Company's obligation to so deliver such certificate or credit the Holder's balance account shall terminate and such shares shall
be cancelled, or (ii) promptly honor its obligation to so deliver to the Holder a certificate or certificates or credit the balance
account of the Holder or the Holder's designee with DTC representing such number of shares of Common Stock that would have been
so delivered if the Company timely complied with its obligations hereunder and pay cash to the Holder in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A) such number of shares of Exchange Shares or Exchange Warrant Shares
(as the case may be) that the Company was required to deliver to the Holder by the Required Delivery Date multiplied by (B) the
lowest Closing Sale Price (as defined in the Warrants) of the Common Stock on any Trading Day during the period commencing on
the date of the delivery by the Holder to the Company of the applicable Exchange Shares or Exchange Warrant Shares (as the case
may be) and ending on the date of such delivery and payment under this clause (ii). Nothing shall limit the Holder's right to
pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates representing shares
of Common Stock (or to electronically deliver such shares of Common Stock) as required pursuant to the terms hereof.

 

Section
2. Representations and Warranties of the Company. The Company represents and warrants to the Holder that:

 

2.1
Organization and Qualification. The Company and each of the subsidiaries of the Company (the "Subsidiaries")
is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction
of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry
on its business as currently conducted. Neither the Company, nor any Subsidiary is in violation or default of any of the provisions
of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company
and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result
in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement or any documents executed in connection
herewith (the "Transaction Documents"), (ii) a material adverse effect on the results of operations, assets,
business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material
adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a "Material Adverse Effect") and no proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

    	5

    	 

    

 

2.2
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company, the Board of Directors or the Company's stockholders
in connection herewith or therewith other than in connection with the Required Approvals (as defined below). This Agreement and
each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company
and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

2.3
Issuance of Securities. The issuance of the Exchange Shares is duly authorized and, upon issuance in accordance with the
terms hereof, each of the Securities shall be validly issued, fully paid and nonassessable and free from all preemptive or similar
rights, taxes, liens, charges and other encumbrances with respect to the issue thereof, with the holders being entitled to all
rights accorded to a holder of Common Stock. The issuance of the Exchange Warrant is duly authorized and, upon issuance in accordance
with the terms hereof ,shall be validly issued, fully paid and non-assessable and free from all taxes, liens, charges and other
encumbrances with respect to the issue thereof. Upon issuance in accordance with the Exchange Warrants, the Exchange Warrant Shares
will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens, charges and
other encumbrances with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common
Stock. Assuming the truth and accuracy of each of the representations and warranties of the Holder contained in Section 3 of this
Agreement, the issuance by the Company of each of the Securities is exempt from registration under the Securities Act.

 

    	6

    	 

    

 

2.4
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents
to which it is a party, the issuance of the Securities and the consummation by it of the transactions contemplated hereby and
thereby do not and will not: (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or articles
of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result in the creation of any options, contracts, agreements,
liens, security interests, or other encumbrances ("Liens") upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company
or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to
which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect.

 

2.5
Acknowledgment Regarding the Exchange.The Company acknowledges and agrees that the Holder is acting solely in the capacity
of an arm's length third party with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges
the Holder is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby, and any advice given by the Holder or any of its representatives or agents
in connection with this Agreement is merely incidental to the Exchange.

 

2.6
No Commission; No Other Consideration. The Company has not paid or given, and has not agreed to pay or give, directly or
indirectly, any commission or other remuneration for soliciting the Exchange. The Securities are being issued exclusively for
the exchange of the Existing Warrants and no other consideration has or will be paid for the Securities.

 

    	7

    	 

    

 

2.7
3(a)(9) Representation. The Company has not, nor has any person acting on its behalf, directly or indirectly made
any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the Exchange
and the issuance of the Securities pursuant to this Agreement to be integrated with prior offerings by the Company for purposes
of the Securities Act which would prevent the Company from delivering the Securities to the Holder pursuant to Section 3(a)(9)
of the Securities Act, nor will the Company take any action or steps that would cause the Exchange, issuance and delivery of the
Securities to be integrated with other offerings to the effect that the delivery of the Securities to the Holder would be seen
not to be exempt pursuant to Section 3(a)(9) of the Securities Act.

 

2.8
No Third-Party Advisors. Other than legal counsel, the Company has not engaged any third parties to assist in the solicitation
with respect to the Exchange.

 

2.9
SEC Reports: Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
of the Exchange Act, for the two years preceding the date hereof (or such shorter period as the Company was required by law or
regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference
therein, being collectively referred to herein as the "SEC Reports") on a timely basis or has received
a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As
of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods involved ("GAAP"), except
as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

    	8

    	 

    

 

2.10
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth in the SEC Reports. Except as set
forth in the SEC Reports, the Company owns, directly or indirectly, all of the capital stock or other equity interests of each
Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

2.11
Filings, Consents and Approvals. Other than as set forth on Schedule 2.11, the Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents, other than: (i) the notice and/or application(s) to each applicable Trading Market for the issuance
and the listing of the Exchange Shares and the Exchange Warrant Shares for trading thereon in the time and manner required thereby,
and (ii) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities
laws (collectively, the "Required Approvals").

 

2.12
Capitalization. The capitalization of the Company is as set forth in the SEC Reports. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. There are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.
The issuance of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person
(other than the Holder) and will not result in a right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none
of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance of the
Securities. There are no stockholders agreements or other similar agreements with respect to the Company's capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders.

 

2.13
Shell Company Status. The Company is not currently, and within the past three years has not been, an issuer identified
in Rule 144(i)(1) under the Securities Act.

 

    	9

    	 

    

 

2.14
DTC Eligibility. The Company, through the Transfer Agent, currently participates in the DTC Fast Automated Securities Transfer
(FAST) Program and the Common Stock can be transferred electronically to third parties via the DTC Fast Automated Securities Transfer
(FAST) Program.

 

2.15
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date
hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in
a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required
to be reflected in the Company's financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii)
the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its
capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment
of information. Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance,
occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its
Subsidiaries or their respective businesses, properties, operations, assets or financial condition, that would be required to
be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not
been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

 

2.16
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge
of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by
any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an "Action") which (i) adversely affects or challenges the legality, validity or enforceability
of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably
be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof,
is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws
or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or
any Subsidiary under the Exchange Act or the Securities Act.

 

    	10

    	 

    

 

2.17
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company's or its Subsidiaries'
employees is a member of a union that relates to such employee's relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company
or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company
or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are
in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

2.18
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation
of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any
of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree
or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance
or regulation of any governmental authority, including, without limitation, all foreign, federal, state and local laws relating
to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters,
except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

2.19
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described
in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material
Adverse Effect ("Material Permits"), and neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit.

 

    	11

    	 

    

 

2.20
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company and
the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries
and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance
with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company
and the Subsidiaries are in compliance.

 

2.21
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective
businesses and which the failure to so have could have a Material Adverse Effect (collectively, the "Intellectual Property
Rights"). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be
abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the
date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has
any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have
or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The
Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all
of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

2.22
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries
are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription
Amount. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.

 

    	12

    	 

    

 

2.23
Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of
the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is
presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental
of real or personal property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner,
in each case in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement
for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any
stock option plan of the Company.

 

2.24
Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and
regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The
Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission's rules and forms. The Company's certifying officers have evaluated
the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered
by the most recently filed periodic report under the Exchange Act (such date, the "Evaluation Date"). The
Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since
the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the
Exchange Act) that have materially affected, or is reasonably likely to materially affect, the internal control over financial
reporting of the Company and its Subsidiaries.

 

    	13

    	 

    

 

2.25
Certain Fees. No brokerage or finder's fees or commissions are or will be payable by the Company or any Subsidiaries
to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect
to the transactions contemplated by the Transaction Documents.

 

2.26
Investment Company. The Company is not, and is not an Affiliate of, and immediately after the Exchange, will not be or
be an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not become an "investment company" subject to registration
under the Investment Company Act of 1940, as amended.

 

2.27
Registration Rights. Other than as disclosed in the SEC Reports, no Person has any right to cause the Company to effect
the registration under the Securities Act of any securities of the Company or any Subsidiaries.

 

2.28
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or I2(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. Except as set forth in the SEC Reports, the Company has not, in the 12 months preceding the date
hereof, received notice from The Nasdaq Market LLC any other exchange or quotation service on which the Company's securities are
traded (the "Trading Market") on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth
in the SEC Reports, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.

 

2.29
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company's certificate of incorporation (or similar charter
documents) or the laws of its state of incorporation that is or could become applicable to the Purchaser as a result of the Purchaser
and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without limitation,
as a result of the Company's issuance of the Securities pursuant to the Exchange.

 

    	14

    	 

    

 

2.30
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Holder or its agents
or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company
understands and confirms that the Holder will rely on the foregoing representation in effecting transactions in securities of
the Company. All of the disclosure furnished by or on behalf of the Company to the Holder regarding the Company and its Subsidiaries,
their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is
true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press
releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company
acknowledges and agrees that the Holder makes no nor has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3 hereof.

 

2.31
No Integrated Offering. Assuming the accuracy of the Holder's representations and warranties set forth in Section 3, neither
the Company, nor any of its Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under circumstances that would cause the Exchange to be integrated
with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities
under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities
of the Company are listed or designated.

 

2.32
Solvency. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt). Except as set forth in the SEC Reports, the Company
has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under
the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports set forth as
of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company
or any Subsidiary has commitments. For the purposes of this Agreement, "Indebtedness" means (x) any liabilities for
borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same,
are, or should be, reflected in the Company's consolidated balance sheet (or the notes thereto), except guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Except as
set forth in the SEC Reports, neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

    	15

    	 

    

 

2.33
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and
local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the
payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of
the Company or of any Subsidiary know of no basis for any such claim.

 

2.34
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary,
any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made
by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material
respect any provision of FCPA.

 

2.35
Accountants. The Company's accounting firm is BDO USA, LLP. To the knowledge and belief of the Company, such accounting
firm: (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect
to the financial statements to be included in the Company's Annual Report for the fiscal year ending December 31, 2014.

 

2.36
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company's
ability to perform any of its obligations under any of the Transaction Documents,

 

    	16

    	 

    

 

2.37
Acknowledgment Regarding Holder's Exchange of Warrants. The Company acknowledges and agrees that the Holder is acting solely
in the capacity of an arm's length party with respect to the Transaction Documents and the transactions contemplated thereby.

 

2.38
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly
or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of
the Company to facilitate the issuance or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company.

 

2.39
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department ("OFAC").

 

2.40
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the "BHCA") and to regulation by the Board of Governors of the Federal
Reserve System (the "Federal Reserve"). Neither the Company nor any of its Subsidiaries or Affiliates
owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities
or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the
Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management
or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

2.41
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "Money
Laundering Laws"), and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company or any Subsidiary, threatened.

 

    	17

    	 

    

 

Section
3. Representations and Warranties of the Holder. The Holder represents and warrants to the Company that:

 

3.1
Ownership of the Existing Warrants. The Holder is the legal and beneficial owner of the Existing Warrants. The Holder paid
for the Existing Warrants, and has continuously held the Existing Warrants since its issuance or purchase. The Holder, individually
or through an affiliate, owns the Existing Warrants outright and free and clear of any options, contracts, agreements, liens,
security interests, or other encumbrances.

 

3.2
No Public Sale or Distribution. The Holder is acquiring the Securities in the ordinary course of business for its own account
and not with a view toward, or for resale in connection with, the public sale or distribution thereof; provided, however, that
by making the representations herein, the Holder does not agree to hold any of the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in accordance with an exemption from the registration requirements
of the Securities Act and applicable state securities laws. The Holder does not presently have any agreement or understanding,
directly or indirectly, with any person to distribute, or transfer any interest or grant participation rights in, the Existing
October Warrants or the Securities.

 

3.3
Accredited Holder and Affiliate Status. The Holder is an "accredited investor" as that term is defined in Rule
501 of Regulation D under the Securities Act. The Holder is not, and has not been, for a period of at least three months prior
to the date of this Agreement (a) an officer or director of the Company, (b) an "affiliate" of the Company (as defined
in Rule 144) (an "Affiliate") or (c) a "beneficial owner" of more than 10% of the common stock (as
defined for purposes of Rule 13d-3 of the Exchange Act).

 

3.4
Reliance on Exemptions. The Holder understands that the Exchange is being made in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and the Holder's compliance with, the representations, warranties, agreements, acknowledgments and
understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of
the Holder to complete the Exchange and to acquire the Securities.

 

3.5
Information. The Holder has been furnished with all materials relating to the business, finances and operations of the
Company and materials relating to the Exchange which have been requested by the Holder. The Holder has been afforded the opportunity
to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by the Holder or
its representatives shall modify, amend or affect the Holder's right to rely on the Company's representations and warranties contained
herein. The Holder acknowledges that all of the documents filed by the Company with the SEC under Sections 13(a), 14(a) or 15(d)
of the Exchange Act that have been posted on the SEC's EDGAR site are available to the Holder, and the Holder has not relied on
any statement of the Company not contained in such documents in connection with the Holder's decision to enter into this Agreement
and the Exchange.

 

    	18

    	 

    

 

3.6
Risk. The Holder understands that its investment in the Securities involves a high degree of risk. The Holder is able to
bear the risk of an investment in the Securities including, without limitation, the risk of total loss of its investment. The
Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision
with respect to the Exchange. There is no assurance that the Securities will continue to be quoted, traded or listed for trading
or quotation on the Nasdaq Capital Market or on any other organized market or quotation system.

 

3.7
No Governmental Review. The Holder 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 in connection with the Exchange or the fairness or
suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the Securities.

 

3.8
Organization; Authorization. The Holder is duly organized, validly existing and in good standing under the laws of its
state of formation and has the requisite organizational power and authority to enter into and perform its obligations under this
Agreement.

 

3.9
Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Holder
and shall constitute the legal, valid and binding obligations of the Holder enforceable against the Holder in accordance with
its terms. The execution, delivery and performance of this Agreement by the Holder and the consummation by the Holder of the transactions
contemplated hereby (including, without limitation, the irrevocable surrender of the Existing October Warrants) will not result
in a violation of the organizational documents of the Holder.

 

3.10
Prior Investment Experience. The Holder acknowledges that it has prior investment experience, including investment in securities
of the type being exchange, including the Existing Warrants or the Securities, and has read all of the documents furnished or
made available by the Company to it and is able to evaluate the merits and risks of such an investment on its behalf, and that
it recognizes the highly speculative nature of this investment.

 

3.11
Tax Consequences. The Holder acknowledges that the Company has made no representation regarding the potential or actual
tax consequences for the Holder which will result from entering into the Agreement and from consummation of the Exchange. The
Holder acknowledges that it bears complete responsibility for obtaining adequate tax advice regarding the Agreement and the Exchange.

 

    	19

    	 

    

 

3.12
No Registration, Review or Approval. The Holder acknowledges, understands and agrees that the Securities are being exchanged
hereunder pursuant to an exchange offer exemption under Section 3(a)(9) of the Securities Act.

 

Section
4. Conditions Precedent to Obligations of the Company. The obligation of the Company to consummate the transactions contemplated
by this Agreement is subject to the satisfaction of each of the following conditions, provided that these conditions are for the
Company's sole benefit and may be waived by the Company at any time in its sole discretion by providing the Holder with prior
written notice thereof:

 

4.1
No Prohibition. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports
to enjoin or restrain any of the transactions contemplated by this Agreement; and

 

4.2
Representations. The accuracy in all material respects when made and on the applicable Closing Date of the representations
and warranties of the Holder contained herein (unless as of a specific date therein);

 

Section
5. Conditions Precedent to Obligations of the Holder. The obligation of the Holder to consummate the transactions contemplated
by this Agreement is subject to the satisfaction of each of the following conditions, provided that these conditions are for the
Holder's sole benefit and may be waived by the Holder at any time in its sole discretion by providing the Company with prior written
notice thereof:

 

5.1
On or prior to the Closing Date the Company shall have issued (or cause to be issued) to the Holder (or its designee) the Exchange
Shares and the Exchange Warrants and delivered the Exchange Certificate to the Holder (or its designee);

 

5.2
no order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to enjoin or restrain
any of the transactions contemplated by this Agreement;

 

5.3
the accuracy in all material respects (except for such representations and warranties qualified by materiality or material adverse
effect, which shall be true and correct in all respects) when made and on the applicable Closing Date of the representations and
warranties of the Company contained herein (unless as of a specific date therein, which shall be true and correct as of such specific
date);

 

5.4
all obligations, covenants and agreements of the Company required to be performed at or prior to the applicable Closing Date shall
have been performed; and 

 

    	20

    	 

    

 

5.5
from the date hereof to the relevant Closing Date, trading in the Company's common stock shall not have been suspended by the
SEC or any trading market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg
L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are
reported by such service, or on any trading market, nor shall a banking moratorium have been declared either by the United States
or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national
or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in
each case, in the reasonable judgment of the Holder makes it impracticable or inadvisable to purchase the Securities at the closing.

 

Section
6. Covenants.

 

6.1
Disclosure of Transaction. The Company shall, on or before 5:30 p.m., New York City Time, on the fourth business day after
the date of this Agreement, issue a press release and/or Current Report on Form 8-K (collectively, the "Press Release")
disclosing all material terms of the transactions contemplated hereby. From and after the issuance of the Press Release, the
Holder shall not be in possession of any material, nonpublic information received from the Company or any of its respective officers,
directors, employees or agents, that is not disclosed in the Press Release. The Company shall not, and shall cause its officers,
directors, employees and agents, not to, provide the Holder with any material, nonpublic information regarding the Company from
and after the filing of the Press Release without the express written consent of the Holder. The Company shall not disclose the
name of the Holder in any filing, announcement, release or otherwise, unless such disclosure is required by law or regulation.

 

6.2
No Integration. None of the Company, its Subsidiaries, any of their affiliates, or any Person acting on their behalf
shall, directly or indirectly, make any offers or sales of any security (as defined in the Securities Act) or solicit any offers
to buy any security or take any other actions, under circumstances that would require registration of any of the Securities under
the Securities Act or cause this offering of the Securities to be integrated with such offering or any prior offerings by the
Company for purposes of the Securities Act or any applicable shareholder approval provisions, including, without limitation, under
the rules and regulations of the principal exchange on which the Common Stock is then traded (the "Principal Market")
and/or any exchange or automated quotation system on which any of the securities of the Company are listed or designated.

 

6.3
Listing. The Company shall promptly secure the listing or designation for quotation (as applicable) of all of the Exchange
Shares and Exchange Warrant Shares upon each national securities exchange and automated quotation system, if any, upon
which the Common Stock is then listed or designated for quotation (as applicable) (subject to official notice of issuance) and
shall maintain such listing of all the Exchange Shares and Exchange Warrant Shares from time to time issuable under the terms
hereof. The Company shall maintain the Common Stock's authorization for quotation on the Principal Market. Neither the Company
nor any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension
of the Common Stock on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligations
under this Section 6.3.

 

    	21

    	 

    

 

6.4
Holding Period. For the purposes of Rule 144, the Company acknowledges that the holding period of (i) the Exchange Shares
may be tacked onto the holding period of the Existing October Warrant and (ii) the Exchange Warrants (and upon exercise of the
Exchange Warrants, the Exchange Warrant Shares (if acquired using a Cashless Exercise (as defined in the Exchange Warrants)))
may be tacked onto the holding period of the Existing Other Warrants, and the Company agrees not to take a position contrary to
this Section 6.4. The Company agrees to take all actions, including, without limitation, the issuance by its legal counsel of
any necessary legal opinions, necessary to issue the Exchange Shares and the Exchanged Warrant Shares that are freely tradable
on the Principal Market without restriction and not containing any restrictive legend without the need for any action by the Holder.

 

6.5
Form D and Blue Sky. The Company shall make all filings and reports relating to the Exchange required under applicable
securities or "Blue Sky" laws of the states of the United States following the date hereof, if any.

 

6.6
Most Favored Nation. The Company hereby represents and warrants as of the date hereof and covenants and agrees from and
after the date hereof that none of the terms offered to any Person with respect to any consent, release, amendment, settlement
or waiver relating to the terms, conditions and transactions contemplated hereby (each a "Settlement Document"),
is or will be more favorable to such Person than those of the Holder and this Agreement. If, and whenever on or after the date
hereof, the Company enters into a Settlement Document, then (i) the Company shall provide notice thereof to the Holder immediately
following the occurrence thereof and (ii) the terms and conditions of this Agreement shall be, without any further action by the
Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder
shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Settlement Document,
provided that upon written notice to the Company at any time the Holder may elect not to accept the benefit of any such amended
or modified term or condition, in which event the term or condition contained in this Agreement shall apply to the Holder as it
was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect
to the Holder. The provisions of this Section 6.6 shall apply similarly and equally to each Settlement Document.

 

    	22

    	 

    

 

Section
7. Registration Rights Agreement. The Holder hereby agrees that upon issuance of the Exchange Shares and the Exchange Warrants
and delivery of the Exchange Certificates to the Holder, that certain Registration Rights Agreement, dated as of October 8, 2014,
between the Company and the Buyers, shall, without any further action by the parties, be terminated and be of no further force
or effect.

 

Section
8. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be construed under the laws of the state of
New York, without regard to principles of conflicts of law or choice of law that would permit or require the application of the
laws of another jurisdiction. The Company and the Holder each hereby agrees that all actions or proceedings arising directly or
indirectly from or in connection with this Agreement shall be litigated only in the Supreme Court of the State of New York or
the United States District Court for the Southern District of New York located in New York County, New York. The Company and the
Holder each consents to the exclusive jurisdiction and venue of the foregoing courts and consents that any process or notice of
motion or other application to either of said courts or a judge thereof may be served inside or outside the State of New York
or the Southern District of New York by generally recognized overnight courier or certified or registered mail, return receipt
requested, directed to such party at its or his address set forth below (and service so made shall be deemed "personal service")
or by personal service or in such other manner as may be permissible under the rules of said courts. THE COMPANY AND THE HOLDER
EACH HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

 

Section
9. Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile signature.

 

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

 

Section
11. Severability. 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 in that jurisdiction or
the validity or enforceability of any provision of this Agreement in any other jurisdiction.

 

    	23

    	 

    

 

Section
12. Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Holder,
the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement
and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein
and therein and, except as specifically set forth herein or therein, neither the Company nor the Holder makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Holder. No provision hereof may be waived other than by an instrument in writing
signed by the party against whom enforcement is sought.

 

Section
13. Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b)
upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept
on file by the sending party); or (c) one calendar day (excluding Saturdays, Sundays, and national banking holidays) after deposit
with an overnight courier service, in each case properly addressed to the party to receive the same.

 

The
addresses and facsimile numbers for such communications shall be:

 

If
to the Company:

 

InterCloud
Systems, Inc.

1030
Broad Street, Suite 102

Shrewsbury,
NJ, 07702

Attn:
Daniel Sullivan

 

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

 

Pryor
Cashman LLP 7 Times Square

New
York, NY 10036-6569

Attn:
M. Ali Panjwani

 

If
to the Holder:

 

to
the address set forth on the signature pages hereto

 

or
to such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified
by written notice given to each other party five (5) days prior to the effectiveness of such change.

 

Section
14. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and assigns, including any purchasers of the Securities. The Holder may assign some or all of their rights hereunder
without the consent of the Company, in which event such assignee shall be deemed to be the Holder hereunder with respect to such
assigned rights.

 

    	24

    	 

    

 

Section
15. No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

Section
16. Survival of Representations. The representations and warranties of the Company and the Holder contained in Sections
2 and 3, respectively, will survive the closing of the transactions contemplated by this Agreement.

 

Section
17. 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 any 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.

 

Section
18. Independent Nature of Holder's Obligations and Exchange Warrants. The obligations of the Holder under this Agreement
or the other Transaction Documents are several and not joint with the obligations of any other Person (each, an "Other
Person"), and the Holder shall not be responsible in any way for the performance of the obligations of any Other
Person under any other Transaction Document or similar agreement of any Other Person (the "Other Documents").
Nothing contained herein or in any Other Document or any other Transaction Document, and no action taken by the Holder pursuant
hereto, shall be deemed to constitute the Holder and such Other Persons as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holder and Other Person are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by this Agreement, any Other Documents or any other Transaction
Document and the Company acknowledges that neither the Holder nor any Other Person are acting in concert or as a group with respect
to such obligations or the transactions contemplated by this Agreement, any Other Document and any other Transaction Document.
The Company and the Holder confirm that the Holder has independently participated in the negotiation of the transactions contemplated
hereby with the advice of its own counsel and advisors. The Holder shall be entitled to independently protect and enforce its
rights, including, without limitation, the rights arising out of this Agreement, any Other Document or out of any other Transaction
Documents, and it shall not be necessary for any Other Person to be joined as an additional party in any proceeding for such purpose.

 

[Signature
Page Follows]

 

    	25

    	 

    

 

IN
WITNESS WHEREOF, the parties have executed this Exchange Agreement as of the date first written above.

 

	 	INTERCLOUD
SYSTEMS, INC.
	 	 	 
	 	By:	/s/
    Timothy A. Larkin
	 	Name:	Timothy A. Larkin
	 	Title:	CFO
	 	 	 
	 	HOLDER:

 

	 	31
    Group, LLC

  

	 	By:	/s/
    Joshua Sason
	 	Name:	Joshua Sason,
	 	Title:	Managing Member

 

Aggregate
number of shares of Common Stock issuable upon exercise of the Existing Warrants as of April 2nd, 2015 (without regard
to any limitation on exercise set forth therein:

 

	Existing April Warrant:	 	 	125,000	 
	 	 	 	 	 
	Existing July Warrant:	 	 	58,870	 
	 	 	 	 	 
	Existing October Warrant:	 	 	2,433,758	 

 

Address
for Notice:

 

	Magna

        5
        Hanover Square, Ste. 1604 

        New
York, NY 10004

 

    	 

    	 

    

 

EXHIBIT
A

 

	Holder	 	Exchange
    Shares
	31 Group, LLC	 	1,146,977 shares*
	 	 	 
	 	 	*$4,315,000 worth of common stock, valued
    at the closing price of the common stock on the trading day immediately prior to the date of this Agreement ($2.15), less
    860,000 shares of common stock

 

    	 

    	 

    

 

Exhibit
B-1

 

Exchange
April Warrant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

 

Exhibit
B-2

 

Exchange
July WarrantExhibit
10.2

 

EXCHANGE
AGREEMENT

 

THIS
EXCHANGE AGREEMENT (the "Agreement") is dated this seventh day of April, 2015, by and among INTERCLOUD
SYSTEMS, INC., a Delaware corporation (the "Company") and the investor set forth on the signature pages
hereto (the "Holder"). Capitalized terms not defined herein shall have the meaning as set forth in the
Existing October Warrants (as defined below).

 

WHEREAS,
the Holder and certain other investors (the "Buyers") beneficially own and hold certain warrants to purchase
common stock of the Company, par value $0.001 per share (the "Common Stock"), issued by the Company on
October 20, 2014 (the "October Warrants");

 

WHEREAS,
the Holder desires to exchange, and the Company desires to issue, on the terms and conditions set forth in this Agreement, the
October Warrants of the Holder (the "Existing October Warrants"), exercisable into such aggregate number
of shares of Common Stock as set forth on the signature page of the Holder hereto, for (i) such aggregate number of shares of
Common Stock (the "Exchange Shares"), as set forth and memorialized on Exhibit A hereto
(such aggregate number, the "Exchange Share Amount") and (ii) the right to receive the Make-Whole Amount
(as defined below), if any; and

 

WHEREAS,
the reliance upon the representations made by the Holder and the Company in this Agreement, the transactions contemplated by this
Agreement are such that the offer and exchange of securities by the Company under this Agreement will be exempt from registration
under applicable United States securities laws as a result of this exchange offer being undertaken pursuant to Section 3(a)(9)
of the Securities Act of 1933, as amended (the "Securities Act").

 

NOW,
THEREFORE, in consideration of the terms and conditions contained herein, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Company and the Holder hereby agree as follows:

 

Section
1. Exchange. Subject to and upon the terms and conditions set forth in this Agreement, the Company and the Holder hereby
agree to exchange the Existing October Warrants for (i) the Exchange Shares and (ii) the right to receive the Make-Whole Amount,
if any (collectively, the "Exchange").

 

1.1
Closing. On the Closing Date (as defined below), the Company will issue and deliver (or cause to be issued and delivered)
certificates evidencing the issuance of the Exchange Shares to the Holder (the "Exchange Certificates"), or
in the name of a custodian or nominee of the Holder, or as otherwise requested by the Holder in writing. The Holder shall deliver
or cause to be delivered to the Company (or its designee) the Existing October Warrants as soon as commercially practicable following
the Closing Date. Immediately following the issuance of the Exchange Shares and delivery of the Exchange Certificates to the Holder
(or its designee) (such time, the "Delivery Time"), the Existing October Warrants shall be cancelled.
The closing of the Exchange shall occur on such date as the parties may mutually agree in writing (the "Closing Date"),
subject to the provisions of Section 4 and Section 5 herein.

 

    	 

    	 

    

 

1.2
Section 3(a)(9). Assuming the accuracy of the representations and warranties of each of the Company and the Holder set
forth in Sections 2 and 3 of this Agreement, the parties acknowledge and agree that the purpose of such representations and warranties
is, among other things, to ensure that the Exchange qualifies as an exchange of securities under Section 3(a)(9) of the Securities
Act.

 

1.3
Make-Whole Amount. On July 1, 2015 (or such other date as the Company and the Holder shall mutually agree) the Company
shall pay to the Holder (or its designee) a cash amount (the "Make-Whole Amount"), by wire transfer in
U.S. dollars and immediately available funds, if any, equal to the greater of (a) zero (0) and (b) the difference of (i) $53,028
less (ii) the product of (x) the Exchange Share Amount and (y) the quotient of (A) the sum of each of the thirty lowest VWAP of
the Common Stock during the period commencing on, and including, April 8, 2015 and ending, and including, June 30, 2015 (the "Measuring
Period"), divided by (B) thirty (30) (all such determinations to be appropriately adjusted for any stock split,
stock dividend, stock combination or other similar transaction during any such Measuring Period); provided that the parties may,
by mutual agreement, reduce such Measuring Period to any such shorter period as the parties shall mutually agree, mutatis mutandis.

 

1.4
Legends. The Holder understands that, after the Closing Date, the Exchange Shares will have been issued pursuant to an
exemption from registration or qualification under the Securities Act and applicable state securities laws, and except as set
forth below, the Exchange Shares shall bear any legend as required by the "blue sky" laws of any state and a restrictive
legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.

 

    	2

    	 

    

 

1.5
Removal of Legends. Certificates evidencing Exchange Shares shall not be required to contain the legend set forth in Section
1.4 above or any other legend (i) while a registration statement covering the resale of such Exchange Shares is effective under
the Securities Act, (ii) following any sale of such Exchange Shares pursuant to Rule 144 of the Securities Act ("Rule
144") (assuming the transferor is not an affiliate of the Company), (iii) if such Exchange Shares are eligible
to be sold, assigned or transferred without limitation under Rule 144 (provided that the Holder provides the Company with reasonable
assurances that such Exchange Shares are eligible for sale, assignment or transfer under Rule 144 which shall not include an opinion
of the Holder's counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144), provided that
the Holder provides the Company with an opinion of counsel to the Holder, in a generally acceptable form, to the effect that such
sale, assignment or transfer of the Exchange Shares may be made without registration under the applicable requirements of the
Securities Act or (v) if such legend is not required under applicable requirements of the Securities Act (including, without limitation,
controlling judicial interpretations and pronouncements issued by the Securities and Exchange Commission). If a legend is not
required pursuant to the foregoing, the Company shall no later than three (3) Trading Days (or such earlier date as required pursuant
to the Exchange Act or other applicable law, rule or regulation for the settlement of a trade initiated on the date the Holder
delivers such legended certificate representing such Exchange Shares to the Company) following the delivery by the Holder to the
Company or the transfer agent (with notice to the Company) of a legended certificate representing such Exchange Shares (endorsed
or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer,
if applicable), together with any other deliveries from the Holder as may be required above in this Section 1.4, as directed by
the Holder, either: (A) provided that the Company's transfer agent is participating in the DTC Fast Automated Securities Transfer
Program and such securities are Exchange Shares, credit the aggregate number of shares of Common Stock to which the Holder shall
be entitled to the Holder's or its designee's balance account with DTC through its Deposit/Withdrawal at Custodian system or (B)
if the Company's transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver
(via reputable overnight courier) to the Holder, a certificate representing such Exchange Shares that is free from all restrictive
and other legends, registered in the name of the Holder or its designee (the date by which such credit is so required to be made
to the balance account of the Holder's or the Holder's designee with DTC or such certificate is required to be delivered to the
Holder pursuant to the foregoing is referred to herein as the "Required Delivery Date", and the date such
shares of Common Stock are actually delivered without restrictive legend to the Holder or the Holder's designee with DTC, as applicable,
the "Share Delivery Date"). The Company shall be responsible for any transfer agent fees or DTC fees with
respect to any issuance of Exchange Shares or the removal of any legends with respect to any Exchange Shares in accordance herewith.

 

    	3

    	 

    

 

1.6
Failure to Timely Deliver: Buy-In. If the Company fails, for any reason or for no reason, to issue and deliver (or cause
to be delivered) to the Holder (or its designee) by the Required Delivery Date, if the Transfer Agent is not participating in
the DTC Fast Automated Securities Transfer Program, a certificate for the number of Exchange Shares to which the Holder is entitled
and register such Exchange Shares on the Company's share register or, if the Transfer Agent is participating in the DTC Fast Automated
Securities Transfer Program, to credit the balance account of the Holder or the Holder's designee with DTC for such number of
Exchange Shares submitted for legend removal by the Holder pursuant to Section 1.4 above (a "Delivery Failure"),
and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares of Common Stock submitted for legend removal by the Holder pursuant
to Section 1.4 above that the Holder anticipated receiving from the Company (a "Buy-In"), then the Company shall,
within three (3) Trading Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in
an amount equal to the Holder's total purchase price (including brokerage commissions and other out-of-pocket expenses, if any)
for the shares of Common Stock so purchased) (the "Buy-In Price"), at which point the Company's obligation
to so deliver such certificate or credit the Holder's balance account shall terminate and such shares shall be cancelled, or (ii)
promptly honor its obligation to so deliver to the Holder a certificate or certificates or credit the balance account of the Holder
or the Holder's designee with DTC representing such number of shares of Common Stock that would have been so delivered if the
Company timely complied with its obligations hereunder and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of Exchange Shares that the Company was required to deliver to the Holder
by the Required Delivery Date multiplied by (B) the lowest Closing Sale Price (as defined in the Existing October Warrants) of
the Common Stock on any Trading Day during the period commencing on the date of the delivery by the Holder to the Company of the
applicable Exchange Shares and ending on the date of such delivery and payment under this clause (ii). Nothing shall limit the
Holder's right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree
of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates representing
shares of Common Stock (or to electronically deliver such shares of Common Stock) as required pursuant to the terms hereof.

 

    	4

    	 

    

 

Section
2. Representations and Warranties of the Company. The Company represents and warrants to the Holder that:

 

2.1
Organization and Qualification. The Company and each of the subsidiaries of the Company (the "Subsidiaries")
is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction
of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry
on its business as currently conducted. Neither the Company, nor any Subsidiary is in violation or default of any of the provisions
of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company
and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result
in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement or any documents executed in connection
herewith (the "Transaction Documents"), (ii) a material adverse effect on the results of operations, assets,
business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material
adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a "Material Adverse Effect") and no proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

2.2
Authorization: Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company, the Board of Directors or the Company's stockholders
in connection herewith or therewith other than in connection with the Required Approvals (as defined below). This Agreement and
each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company
and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

    	5

    	 

    

 

2.3
Issuance of Exchange Shares. The issuance of the Exchange Shares is duly authorized and, upon issuance in accordance with
the terms hereof, each of the Exchange Shares shall be validly issued, fully paid and nonassessable and free from all preemptive
or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock. Assuming the truth and accuracy of each of the representations and warranties
of the Holder contained in Section 3 of this Agreement, the issuance by the Company of each of the Exchange Shares is exempt from
registration under the Securities Act.

 

2.4
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents
to which it is a party, the issuance of the Exchange Shares and the consummation by it of the transactions contemplated hereby
and thereby do not and will not: (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or
articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or
an event that with notice or lapse of time or both would become a default) under, result in the creation of any options, contracts,
agreements, liens, security interests, or other encumbrances ("Liens") upon any of the properties or assets of
the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

2.5
Acknowledgment Regarding the Exchange. The Company acknowledges and agrees that the Holder is acting solely in the capacity
of an arm's length third party with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges
the Holder is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby, and any advice given by the Holder or any of its representatives or agents
in connection with this Agreement is merely incidental to the Exchange.

 

2.6
No Commission; No Other Consideration. The Company has not paid or given, and has not agreed to pay or give, directly or
indirectly, any commission or other remuneration for soliciting the Exchange. The Exchange Shares are being issued exclusively
for the exchange of the Existing October Warrants and no other consideration has or will be paid for the Exchange Shares.

 

    	6

    	 

    

 

2.7
3(a)(9) Representation. The Company has not, nor has any person acting on its behalf, directly or indirectly made any offers
or sales of any security or solicited any offers to buy any security under circumstances that would cause the Exchange and the
issuance of the Exchange Shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of
the Securities Act which would prevent the Company from delivering the Exchange Shares to the Holder pursuant to Section 3(a)(9)
of the Securities Act, nor will the Company take any action or steps that would cause the Exchange, issuance and delivery of the
Exchange Shares to be integrated with other offerings to the effect that the delivery of the Exchange Shares to the Holder would
be seen not to be exempt pursuant to Section 3(a)(9) of the Securities Act.

 

2.8
No Third-Party Advisors. Other than legal counsel, the Company has not engaged any third parties to assist in the solicitation
with respect to the Exchange.

 

2.9
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
of the Exchange Act, for the two years preceding the date hereof (or such shorter period as the Company was required by law or
regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference
therein, being collectively referred to herein as the "SEC Reports") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto
as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved ("GAAP"), except as may be otherwise
specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject,
in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

    	7

    	 

    

 

2.10
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth in the SEC Reports. Except as set
forth in the SEC Reports, the Company owns, directly or indirectly, all of the capital stock or other equity interests of each
Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

2.11
Filings, Consents and Approvals. Other than as set forth on Schedule 2.11, the Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents, other than: (i) the notice and/or application(s) to each applicable Trading Market for the issuance
and the listing of the Exchange Shares for trading thereon in the time and manner required thereby, and (ii) the filing of Form
D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the "Required
Approvals").

 

2.12
Capitalization. The capitalization of the Company is as set forth in the SEC Reports. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. There are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.
The issuance of the Exchange Shares will not obligate the Company to issue shares of Common Stock or other securities to any Person
(other than the Holder) and will not result in a right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none
of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance of the
Exchange Shares. There are no stockholders agreements or other similar agreements with respect to the Company's capital stock
to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders.

 

2.13
Shell Company Status. The Company is not currently, and within the past three years has not been, an issuer identified
in Rule 144(i)(1) under the Securities Act.

 

    	8

    	 

    

 

2.14
DTC Eligibility. The Company, through the Transfer Agent, currently participates in the DTC Fast Automated Securities Transfer
(FAST) Program and the Common Stock can be transferred electronically to third parties via the DTC Fast Automated Securities Transfer
(FAST) Program.

 

2.15
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i)
there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected
in the Company's financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has
not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company
stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information.
Except for the issuance of the Exchange Shares contemplated by this Agreement, no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries
or their respective businesses, properties, operations, assets or financial condition, that would be required to be disclosed
by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly
disclosed at least 1 Trading Day prior to the date that this representation is made.

 

2.16
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge
of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by
any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an "Action") which (i) adversely affects or challenges the legality, validity or enforceability
of any of the Transaction Documents or the Exchange Shares or (ii) could, if there were an unfavorable decision, have or reasonably
be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof,
is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws
or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or
any Subsidiary under the Exchange Act or the Securities Act.

 

    	9

    	 

    

 

2.17
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company's or its Subsidiaries'
employees is a member of a union that relates to such employee's relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company
or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company
or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are
in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

2.18
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation
of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any
of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree
or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance
or regulation of any governmental authority, including, without limitation, all foreign, federal, state and local laws relating
to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters,
except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

2.19
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described
in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material
Adverse Effect ("Material Permits"), and neither the Company nor any Subsidiary has received any notice
of proceedings relating to the revocation or modification of any Material Permit.

 

    	10

    	 

    

 

2.20
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company and
the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries
and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance
with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company
and the Subsidiaries are in compliance.

 

2.21
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective
businesses and which the failure to so have could have a Material Adverse Effect (collectively, the "Intellectual Property
Rights"). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be
abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the
date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has
any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have
or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The
Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all
of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

2.22
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries
are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription
Amount. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.

 

    	11

    	 

    

 

2.23
Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of
the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is
presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental
of real or personal property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner,
in each case in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement
for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any
stock option plan of the Company.

 

2.24
Sarbanes-Oxley: Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and
regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The
Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission's rules and forms. The Company's certifying officers have evaluated
the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered
by the most recently filed periodic report under the Exchange Act (such date, the "Evaluation Date"). The
Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since
the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the
Exchange Act) that have materially affected, or is reasonably likely to materially affect, the internal control over financial
reporting of the Company and its Subsidiaries.

 

    	12

    	 

    

 

2.25
Certain Fees. No brokerage or finder's fees or commissions are or will be payable by the Company or any Subsidiaries to
any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by the Transaction Documents.

 

2.26
Investment Company. The Company is not, and is not an Affiliate of, and immediately after the Exchange, will not be or
be an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not become an "investment company" subject to registration
under the Investment Company Act of 1940, as amended.

 

2.27
Registration Rights. Other than as disclosed in the SEC Reports, no Person has any right to cause the Company to effect
the registration under the Securities Act of any securities of the Company or any Subsidiaries.

 

2.28
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. Except as set forth in the SEC Reports, the Company has not, in the 12 months preceding the date
hereof, received notice from The Nasdaq Market LLC any other exchange or quotation service on which the Company's securities are
traded (the "Trading Market") on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth
in the SEC Reports, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.

 

2.29
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company's certificate of incorporation (or similar charter
documents) or the laws of its state of incorporation that is or could become applicable to the Purchaser as a result of the Purchaser
and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without limitation,
as a result of the Company's issuance of the Exchange Shares pursuant to the Exchange.

 

    	13

    	 

    

 

2.30
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Holder or its agents
or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company
understands and confirms that the Holder will rely on the foregoing representation in effecting transactions in securities of
the Company. All of the disclosure furnished by or on behalf of the Company to the Holder regarding the Company and its Subsidiaries,
their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is
true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press
releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company
acknowledges and agrees that the Holder makes no nor has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3 hereof.

 

2.31
No Integrated Offering. Assuming the accuracy of the Holder's representations and warranties set forth in Section 3, neither
the Company, nor any of its Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under circumstances that would cause the Exchange to be integrated
with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities
under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities
of the Company are listed or designated.

 

2.32
Solvency. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt). Except as set forth in the SEC Reports, the Company
has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under
the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports set forth as
of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company
or any Subsidiary has commitments. For the purposes of this Agreement, "Indebtedness" means (x) any liabilities for
borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same,
are, or should be, reflected in the Company's consolidated balance sheet (or the notes thereto), except guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Except as
set forth in the SEC Reports, neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

    	14

    	 

    

 

2.33
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and
local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the
payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of
the Company or of any Subsidiary know of no basis for any such claim.

 

2.34
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary,
any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made
by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material
respect any provision of FCPA.

 

2.35
Accountants. The Company's accounting firm is BDO USA, LLP. To the knowledge and belief of the Company, such accounting
firm: (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect
to the financial statements to be included in the Company's Annual Report for the fiscal year ending December 31, 2014.

 

2.36
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company's
ability to perform any of its obligations under any of the Transaction Documents.

 

2.37
Acknowledgment Regarding Holder's Exchange of Existing October Warrants. The Company acknowledges and agrees that the Holder
is acting solely in the capacity of an arm's length party with respect to the Transaction Documents and the transactions contemplated
thereby.

 

    	15

    	 

    

 

2.38
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly
or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of
the Company to facilitate the issuance or resale of any of the Exchange Shares, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Exchange Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company.

 

2.39
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department ("OFAC").

 

2.40
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the "BHCA") and to regulation by the Board of Governors of the Federal Reserve
System (the "Federal Reserve"). Neither the Company nor any of its Subsidiaries or Affiliates owns or
controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five
percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

2.41
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "Money
Laundering Laws"), and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company or any Subsidiary, threatened.

 

Section
3. Representations and Warranties of the Holder. The Holder represents and warrants to the Company that:

 

3.1
Ownership of the Existing October Warrants. The Holder is the legal and beneficial owner of the Existing October Warrants.
The Holder paid for the Existing October Warrants, and has continuously held the Existing October Warrants since its issuance
or purchase. The Holder, individually or through an affiliate, owns the Existing October Warrants outright and free and clear
of any options, contracts, agreements, liens, security interests, or other encumbrances.

 

    	16

    	 

    

 

3.2
No Public Sale or Distribution. The Holder is acquiring the Exchange Shares in the ordinary course of business for its
own account and not with a view toward, or for resale in connection with, the public sale or distribution thereof; provided, however,
that by making the representations herein, the Holder does not agree to hold any of the Exchange Shares for any minimum or other
specific term and reserves the right to dispose of the Exchange Shares at any time in accordance with an exemption from the registration
requirements of the Securities Act and applicable state securities laws. The Holder does not presently have any agreement or understanding,
directly or indirectly, with any person to distribute, or transfer any interest or grant participation rights in, the Existing
October Warrants or the Exchange Shares.

 

3.3
Accredited Holder and Affiliate Status. The Holder is an "accredited investor" as that term is defined in Rule
501 of Regulation D under the Securities Act. The Holder is not, and has not been, for a period of at least three months prior
to the date of this Agreement (a) an officer or director of the Company, (b) an "affiliate" of the Company (as defined
in Rule 144) (an "Affiliate") or (c) a "beneficial owner" of more than 10% of the common stock
(as defined for purposes of Rule 13d-3 of the Exchange Act).

 

3.4
Reliance on Exemptions. The Holder understands that the Exchange is being made in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and the Holder's compliance with, the representations, warranties, agreements, acknowledgments and
understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of
the Holder to complete the Exchange and to acquire the Exchange Shares.

 

3.5
Information. The Holder has been furnished with all materials relating to the business, finances and operations of the
Company and materials relating to the Exchange which have been requested by the Holder. The Holder has been afforded the opportunity
to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by the Holder or
its representatives shall modify, amend or affect the Holder's right to rely on the Company's representations and warranties contained
herein. The Holder acknowledges that all of the documents filed by the Company with the SEC under Sections 13(a), 14(a) or 15(d)
of the Exchange Act that have been posted on the SEC's EDGAR site are available to the Holder, and the Holder has not relied on
any statement of the Company not contained in such documents in connection with the Holder's decision to enter into this Agreement
and the Exchange.

 

    	17

    	 

    

 

3.6
Risk. The Holder understands that its investment in the Exchange Shares involves a high degree of risk. The Holder is able
to bear the risk of an investment in the Exchange Shares including, without limitation, the risk of total loss of its investment.
The Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision
with respect to the Exchange. There is no assurance that the Exchange Shares will continue to be quoted, traded or listed for
trading or quotation on the Nasdaq Capital Market or on any other organized market or quotation system.

 

3.7
No Governmental Review. The Holder 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 in connection with the Exchange or the fairness or
suitability of the investment in the Exchange Shares nor have such authorities passed upon or endorsed the merits of the Exchange
Shares.

 

3.8
Organization; Authorization. The Holder is duly organized, validly existing and in good standing under the laws of its
state of formation and has the requisite organizational power and authority to enter into and perform its obligations under this
Agreement.

 

3.9
Validity: Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Holder
and shall constitute the legal, valid and binding obligations of the Holder enforceable against the Holder in accordance with
its terms. The execution, delivery and performance of this Agreement by the Holder and the consummation by the Holder of the transactions
contemplated hereby (including, without limitation, the irrevocable surrender of the Existing October Warrants) will not result
in a violation of the organizational documents of the Holder.

 

3.10
Prior Investment Experience. The Holder acknowledges that it has prior investment experience, including investment in securities
of the type being exchange, including the Existing October Warrants or the Exchange Shares, and has read all of the documents
furnished or made available by the Company to it and is able to evaluate the merits and risks of such an investment on its behalf,
and that it recognizes the highly speculative nature of this investment.

 

3.11
Tax Consequences. The Holder acknowledges that the Company has made no representation regarding the potential or actual
tax consequences for the Holder which will result from entering into the Agreement and from consummation of the Exchange. The
Holder acknowledges that it bears complete responsibility for obtaining adequate tax advice regarding the Agreement and the Exchange.

 

3.12
No Registration, Review or Approval. The Holder acknowledges, understands and agrees that the Exchange Shares are being
exchanged hereunder pursuant to an exchange offer exemption under Section 3(a)(9) of the Securities Act.

 

    	18

    	 

    

 

Section
4. Conditions Precedent to Obligations of the Company. The obligation of the Company to consummate the transactions contemplated
by this Agreement is subject to the satisfaction of each of the following conditions, provided that these conditions are for the
Company's sole benefit and may be waived by the Company at any time in its sole discretion by providing the Holder with prior
written notice thereof:

 

4.1
No Prohibition. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports
to enjoin or restrain any of the transactions contemplated by this Agreement; and

 

4.2
Representations. The accuracy in all material respects when made and on the applicable Closing Date of the representations
and warranties of the Holder contained herein (unless as of a specific date therein);

 

Section
5. Conditions Precedent to Obligations of the Holder. The obligation of the Holder to consummate the transactions contemplated
by this Agreement is subject to the satisfaction of each of the following conditions, provided that these conditions are for the
Holder's sole benefit and may be waived by the Holder at any time in its sole discretion by providing the Company with prior written
notice thereof:

 

5.1
On or prior to the Closing Date the Company shall have issued (or cause to be issued) to the Holder (or its designee) the Exchange
Shares and delivered the Exchange Certificate to the Holder (or its designee);

 

5.2
no order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to enjoin or restrain
any of the transactions contemplated by this Agreement;

 

5.3
the accuracy in all material respects (except for such representations and warranties qualified by materiality or material adverse
effect, which shall be true and correct in all respects) when made and on the applicable Closing Date of the representations and
warranties of the Company contained herein (unless as of a specific date therein, which shall be true and correct as of such specific
date);

 

5.4
all obligations, covenants and agreements of the Company required to be performed at or prior to the applicable Closing Date shall
have been performed; and

 

5.5
from the date hereof to the relevant Closing Date, trading in the Company's common stock shall not have been suspended by the
SEC or any trading market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg
L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are
reported by such service, or on any trading market, nor shall a banking moratorium have been declared either by the United States
or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national
or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in
each case, in the reasonable judgment of the Holder makes it impracticable or inadvisable to purchase the Exchange Shares at the
closing.

 

    	19

    	 

    

 

Section
6. Covenants.

 

6.1
Disclosure of Transaction. The Company shall, on or before 5:30 p.m., New York City Time, on the fourth business day after
the date of this Agreement, issue a press release and/or Current Report on Form 8-K (collectively, the "Press Release")
disclosing all material terms of the transactions contemplated hereby. From and after the issuance of the Press Release, the Holder
shall not be in possession of any material, nonpublic information received from the Company or any of its respective officers,
directors, employees or agents, that is not disclosed in the Press Release. The Company shall not, and shall cause its officers,
directors, employees and agents, not to, provide the Holder with any material, nonpublic information regarding the Company from
and after the filing of the Press Release without the express written consent of the Holder. The Company shall not disclose the
name of the Holder in any filing, announcement, release or otherwise, unless such disclosure is required by law or regulation.

 

6.2
No Integration. None of the Company, its Subsidiaries, any of their affiliates, or any Person acting on their behalf shall,
directly or indirectly, make any offers or sales of any security (as defined in the Securities Act) or solicit any offers to buy
any security or take any other actions, under circumstances that would require registration of any of the Exchange Shares under
the Securities Act or cause this offering of the Exchange Shares to be integrated with such offering or any prior offerings by
the Company for purposes of the Securities Act or any applicable shareholder approval provisions, including, without limitation,
under the rules and regulations of the principal exchange on which the Common Stock is then traded (the "Principal Market")
and/or any exchange or automated quotation system on which any of the securities of the Company are listed or designated.

 

6.3
Listing. The Company shall promptly secure the listing or designation for quotation (as applicable) of all of the Exchange
Shares upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed
or designated for quotation (as applicable) (subject to official notice of issuance) and shall maintain such listing of all the
Exchange Shares from time to time issuable under the terms hereof. The Company shall maintain the Common Stock's authorization
for quotation on the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action which would be reasonably
expected to result in the delisting or suspension of the Common Stock on the Principal Market. The Company shall pay all fees
and expenses in connection with satisfying its obligations under this Section 6.3.

 

    	20

    	 

    

 

6.4
Holding Period. For the purposes of Rule 144, the Company acknowledges that the holding period of the Exchange Shares may
be tacked onto the holding period of the Existing October Warrants, and the Company agrees not to take a position contrary to
this Section 6.4. The Company agrees to take all actions, including, without limitation, the issuance by its legal counsel of
any necessary legal opinions, necessary to issue the Exchange Shares that are freely tradable on the Principal Market without
restriction and not containing any restrictive legend without the need for any action by the Holder.

 

6.5
Form D and Blue Sky. The Company shall make all filings and reports relating to the Exchange required under applicable
securities or "Blue Sky" laws of the states of the United States following the date hereof, if any.

 

6.6
Most Favored Nation. The Company hereby represents and warrants as of the date hereof and covenants and agrees from and
after the date hereof that none of the terms offered to any Person with respect to any consent, release, amendment, settlement
or waiver relating to the terms, conditions and transactions contemplated hereby (each a "Settlement Document"),
is or will be more favorable to such Person than those of the Holder and this Agreement. If, and whenever on or after the date
hereof, the Company enters into a Settlement Document, then (i) the Company shall provide notice thereof to the Holder immediately
following the occurrence thereof and (ii) the terms and conditions of this Agreement shall be, without any further action by the
Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder
shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Settlement Document,
provided that upon written notice to the Company at any time the Holder may elect not to accept the benefit of any such amended
or modified term or condition, in which event the term or condition contained in this Agreement shall apply to the Holder as it
was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect
to the Holder. The provisions of this Section 6.6 shall apply similarly and equally to each Settlement Document.

 

Section
7. Registration Rights Agreement. The Holder hereby agrees that upon issuance of the Exchange Shares and delivery of the
Exchange Certificates to the Holder, that certain Registration Rights Agreement, dated as of October 8, 2014, between the Company
and the Buyers, shall, without any further action by the parties, be terminated and be of no further force or effect.

 

Section
8. Governing Law: Jurisdiction: Waiver of Jury Trial. This Agreement shall be construed under the laws of the state of
New York, without regard to principles of conflicts of law or choice of law that would permit or require the application of the
laws of another jurisdiction. The Company and the Holder each hereby agrees that all actions or proceedings arising directly or
indirectly from or in connection with this Agreement shall be litigated only in the Supreme Court of the State of New York or
the United States District Court for the Southern District of New York located in New York County, New York. The Company and the
Holder each consents to the exclusive jurisdiction and venue of the foregoing courts and consents that any process or notice of
motion or other application to either of said courts or a judge thereof may be served inside or outside the State of New York
or the Southern District of New York by generally recognized overnight courier or certified or registered mail, return receipt
requested, directed to such party at its or his address set forth below (and service so made shall be deemed "personal service")
or by personal service or in such other manner as may be permissible under the rules of said courts. THE COMPANY AND THE HOLDER
EACH HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

 

    	21

    	 

    

 

Section
9. Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile signature.

 

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

 

Section
11. Severability. 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 in that jurisdiction or
the validity or enforceability of any provision of this Agreement in any other jurisdiction.

 

Section
12. Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Holder,
the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement
and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein
and therein and, except as specifically set forth herein or therein, neither the Company nor the Holder makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Holder. No provision hereof may be waived other than by an instrument in writing
signed by the party against whom enforcement is sought.

 

Section
13. Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b)
upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept
on file by the sending party); or (c) one calendar day (excluding Saturdays, Sundays, and national banking holidays) after deposit
with an overnight courier service, in each case properly addressed to the party to receive the same.

 

    	22

    	 

    

 

The
addresses and facsimile numbers for such communications shall be:

 

If
to the Company:

 

InterCloud
Systems, Inc.

1030
Broad Street, Suite 102

Shrewsbury,
NJ, 07702

Attn:
Daniel Sullivan

 

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

 

Pryor
Cashman LLP 7 Times Square

New
York, NY 10036-6569

Attn:
M. Ali Panjwani

 

If
to the Holder:

 

to
the address set forth on the signature pages hereto

 

or
to such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified
by written notice given to each other party five (5) days prior to the effectiveness of such change.

 

Section
14. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and assigns, including any purchasers of the Exchange Shares. The Holder may assign some or all of their rights hereunder
without the consent of the Company, in which event such assignee shall be deemed to be the Holder hereunder with respect to such
assigned rights.

 

Section
15. No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

Section
16. Survival of Representations. The representations and warranties of the Company and the Holder contained in Sections
2 and 3, respectively, will survive the closing of the transactions contemplated by this Agreement.

 

Section
17. 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 any 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.

 

    	23

    	 

    

 

Section
18. Independent Nature of Holder's Obligations. The obligations of the Holder under this Agreement or the other Transaction
Documents are several and not joint with the obligations of any other Person (each, an "Other Person"), and
the Holder shall not be responsible in any way for the performance of the obligations of any Other Person under any other Transaction
Document or similar agreement of any Other Person (the "Other Documents"). Nothing contained herein or in any
Other Document or any other Transaction Document, and no action taken by the Holder pursuant hereto, shall be deemed to constitute
the Holder and such Other Persons as a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Holder and Other Person are in any way acting in concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement, any Other Documents or any other Transaction Document and the Company acknowledges that neither
the Holder nor any Other Person are acting in concert or as a group with respect to such obligations or the transactions contemplated
by this Agreement, any Other Document and any other Transaction Document. The Company and the Holder confirm that the Holder has
independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors.
The Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising
out of this Agreement, any Other Document or out of any other Transaction Documents, and it shall not be necessary for any Other
Person to be joined as an additional party in any proceeding for such purpose.

 

[Signature
Page Follows]

 

    	24

    	 

    

 

IN
WITNESS WHEREOF, the parties have executed this Exchange Agreement as of the date first written above. 

 

	 	INTERCLOUD
    SYSTEMS, INC.
	 	 	 
	 	By:	/s/
    Timothy A. Larkin
	 	Name:	Timothy A. Larkin
	 	Title:	CFO
	 	 	 
	 	HOLDER:

 

	 	 	 
	 	 	 
	 	By:	
	 	Name:	
	 	Title:	

 

Aggregate
number of shares of Common Stock issuable upon exercise of the Existing October Warrants as of the date hereof (without regard
to any limitation on exercise set forth therein:

 

	Existing
    October Warrants:  	 	 

 

Address
for Notice:

 

    	25

    	 

    

 

IN
WITNESS WHEREOF, the parties have executed this Exchange Agreement as of the date first written above. 

 

	 	INTERCLOUD
    SYSTEMS, INC.
	 	 	 
	 	By:	
	 	Name:	
	 	Title:	
	 	 	 
	 	HOLDER:
	 	 
	 	CAPITAL
    VENTURES INTERNATIONAL BY

    HEIGHTS CAPITAL MANAGEMENT
    ITS AUTHORIZED AGENT

 

	 	By:	/s/
    Martin Kobinger 
	 	Name:	Martin Kobinger
	 	Title:	Investment Manager

 

Aggregate
number of shares of Common Stock issuable upon exercise of the Existing October Warrants as of the date hereof (without regard
to any limitation on exercise set forth therein:

 

	Existing
    October Warrants:	 	3,093

 

Address
for Notice:

 

c/o Steve
Tam / Sam Winer

Heights
Capital Management

101 California
St., Suite 3250

San Francisco,
CA 94111

 

    	26

    	 

    

 

EXHIBIT
A

 

	Holder	 	Exchange
    Shares
	Capital
    Ventures International	 	15,826
    shares*
		 	 
	 	 	*$53,028
    worth of common stock, valued at the closing price of the common stock on the trading day immediately prior to the date of
    this Agreement ($2.15), less 8,838 shares of common stock

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00243-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00243-of-00352.parquet"}]]