Document:

Exhibit 4.2

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

COMMON STOCK PURCHASE WARRANT

 

MassRoots, Inc.

 

	Warrant Shares: [___]	 	Initial Exercise Date: March [___], 2016

  

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”)
certifies that, for value received, [___] or its assigns (the “Holder”) is entitled, upon the terms and subject
to the limitations on exercise and the conditions hereinafter set forth, at any time on or after March [__], 2016 (the “Initial
Exercise Date”) and on or prior to the close of business on the five year anniversary of the Initial Exercise Date (the
“Termination Date”) but not thereafter, to subscribe for and purchase from MassRoots, Inc., a Delaware corporation
(the “Company”), up to [__] shares (as subject to adjustment hereunder, the “Warrant Shares”)
of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b).

 

Section 1.Definitions. Capitalized terms
used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”), dated March [__], 2016, among the Company and the purchasers signatory thereto.

 

Section 2.Exercise.

 

a)  Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or
times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other
office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the
Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise form annexed
hereto and within three (3) Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall
have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s
check drawn on a United States bank or, if available, pursuant to the cashless exercise procedure specified in Section 2(c)
below. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or
notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the
Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company.
Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available
hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal
to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of
Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise
Form within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,
acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount
stated on the face hereof.

     

     

    

b)            
Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $1.00, subject to adjustment
hereunder (the “Exercise Price”).

 

c)             
Cashless Exercise. If at any time there is no effective Registration Statement registering, or no current prospectus
available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at
such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

	(A)		= the VWAP on the Trading Day immediately preceding the date on which Holder elects
to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;

	(B)		= the Exercise Price of this Warrant, as adjusted hereunder; and

	(X)		= the number of Warrant Shares that would be issuable upon exercise of this Warrant
in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

 

Notwithstanding anything herein to the contrary, on
the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

 

 d) Mechanics of Exercise.

 

i.        
Delivery of Warrant Shares Upon Exercise. Warrant Shares purchased hereunder shall be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company through its
Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and
either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by the Holder or (B) the shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant
to Rule 144, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that
is three (3) Trading Days after the latest of (A) the delivery to the Company of the Notice of Exercise and (B) surrender of this
Warrant (if required) (such date, the “Warrant Share Delivery Date”). The Warrant Shares shall be deemed to
have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise
Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi)
prior to the issuance of such shares, having been paid. If the Company fails for any reason to deliver to the Holder the Warrant
Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock
on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading
Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant
Shares are delivered or Holder rescinds such exercise.

 

ii.               
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at
the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver
to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.             
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares
pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

     

     

    

iv.              Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the
Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to an exercise
on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an
open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which
(x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to
such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed
rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the
amount of such loss. Nothing herein shall limit a 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 shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

 

v.             
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such
exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal
to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

vi.              Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of Warrant Shares, all of which taxes and expenses shall be paid by
the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than
the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Exercise.

 

vii.             
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely
exercise of this Warrant, pursuant to the terms hereof.

 

e)Holder’s Exercise Limitations. The
Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set
forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons
acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares
of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of
any other securities of the Company (including, without limitation, any other Common Stock Equivalents) 

     

     

    

subject to a
limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of
its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is
in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be
filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of
whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of
which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of
Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each
case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm
the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For
purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the
number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. 
Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this
Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was
reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.
The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of
the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common
Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any
such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The
provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the
terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of
this Warrant.

 

Section 3.Certain Adjustments.

 

a)              Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent
securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock
issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number
of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then
in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall
be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall
remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination or re-classification.

     

     

    

b)            
Subsequent Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant
is outstanding, until such time that no principal or interest amount remains due under that certain Convertible Secured Promissory
Note due September __, 2016, issued pursuant to the Purchase Agreement, shall sell or grant any option to purchase, or sell or
grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or
other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the Exercise Price
then in effect (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive
Issuance”) (it being understood and agreed that if the holder of the Common Stock or Common Stock Equivalents so issued
shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled
to receive shares of Common Stock at an effective price per share that is less than the Exercise Price, such issuance shall be
deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance at such effective price), then
simultaneously with the consummation of each Dilutive Issuance the Exercise Price shall be reduced and only reduced to equal the
Base Share Price and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price
payable hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price
prior to such adjustment. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding
the foregoing, no adjustments shall be made, paid or issued under this Section 3(b) in respect of an Exempt Issuance. The Company
shall notify the Holder, in writing, no later than the Trading Day following the issuance or deemed issuance of any Common Stock
or Common Stock Equivalents subject to this Section 3(b), indicating therein the applicable issuance price, or applicable reset
price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”).
For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon
the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Warrant Shares based upon the Base Share
Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise. If the Company enters
into a Variable Rate Transaction, despite the prohibition thereon in the Purchase Agreement, the Company shall be deemed to have
issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at which such securities may
be converted or exercised.

 

c)              Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to
the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this
Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for
the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to
participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the
Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).

 

d)            
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of
return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(a "Distribution"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder
had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant 

     

     

    

(without regard to any limitations
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a
record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common
Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the
Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any
shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding
the Beneficial Ownership Limitation).

 

e)              Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more
related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the
Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of
all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase
offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of
Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been
accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or
more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities,
cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or
share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more
than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or
other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder
(without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of
the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a
holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental
Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such
exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are
given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or
any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or
within 30 days after, the consummation of the Fundamental Transaction, purchase this Warrant from the Holder by paying to the
Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of
the consummation of such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant
based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P.
(“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for
pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to
the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B)
an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as
of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the
underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any,
plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (D) a remaining
option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the
Termination Date. 

     

     

    

The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the
survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this
Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written
agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for
this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and
substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity
(or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant
(without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the
relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value
of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under
this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the
Company herein.

 

f)             
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of
a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding
as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

g)            
Notice to Holder.

 

i.        
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section
3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii.        
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed
to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior
to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken
for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants
are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or
in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. 

     

     

    

To the extent
that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of
the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective
date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

Section 4.Transfer of Warrant.

 

a)              Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the
provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the
Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto
duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the
making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant
in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the
Holder delivers an assignment form to the Company assigning this Warrant full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant
issued.

 

b)            
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid
office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated
the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

 

c)             
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may
deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

d)            
Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this
Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under
the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale
restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing
such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of
the Purchase Agreement.

 

e)             
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring
this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and
not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act
or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 

Section 5.Miscellaneous.

 

a)             
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3.

     

     

    

b)            
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating
to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which,
in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.

 

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

 

d)            
Authorized Shares.

 

The Company covenants that, during the period the Warrant
is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that
its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by
the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or
through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality
of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform
its obligations under this Warrant.

 

Before taking any action which would result in an adjustment
in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

 

e)             
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant
shall be determined in accordance with the provisions of the Purchase Agreement.

 

f)             
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not
registered and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal
securities laws.

     

     

    

g)            
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part
of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding
the fact that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with
any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts
as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including
those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.

 

h)            
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the
Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

 

i)               Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to
purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any
liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.

 

j)              
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees
to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)            
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced
hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to
time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)              
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the
Company and the Holder.

 

m)           
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

 

n)            
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose,
be deemed a part of this Warrant.

 

o)            
Automatic Exercise on Termination Date. In the event that, upon the Termination Date, the VWAP on the Trading Day
immediately preceding the Termination Date as determined in accordance with this Warrant above is greater than the Exercise Price
in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to a Cashless
Exercise pursuant to Section 2(c) of this Warrant as to all shares (or such other securities) for which this Warrant shall not
previously have been exercised or converted, and the Company shall promptly deliver a certificate representing the shares (or
such other securities) issued upon such exercise to the Holder.

 

********************

 

 

(Signature Page Follows)

    	 

    	 

    

 IN WITNESS WHEREOF, the Company has caused this Warrant
to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

	 	MASSROOTS, INC.
	 	 	 
	 	 	 
	 	By:	 
	 		Name:
	 	 	Title:

 

    	 

    	 

    

 NOTICE OF EXERCISE

 

To:Massroots, Inc.

 

(1) 
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached
Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable
transfer taxes, if any.

 

(2) 
Payment shall take the form of (check applicable box):

 

[ ] in lawful money of the United States; or

 

[ ] if permitted the cancellation of such number of Warrant
Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to
the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3) 
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

(4) Accredited Investor. The undersigned is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: _______________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: _______________________________________________________________________________________ 

    	 

    	 

    

EXHIBIT B

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

 

	Name:	
	 	(Please
    Print)
	 	 
	Address:	
	 	(Please
    Print)
	 	 
	Dated:
    _______________ __, ______	 
	 	 
	Holder’s Signature:	 	 
	 	 
	Holder’s Address:SECURITIES PURCHASE AGREEMENT

This Securities
Purchase Agreement (this “Agreement”) is dated as of March [_], 2016, between MassRoots, Inc. a Delaware corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, a “Purchaser” and collectively, the “Purchasers”).

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

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

ARTICLE I. 

DEFINITIONS

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

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.

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

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

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

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

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

“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.2.

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

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

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

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

     

     

    

“Company Counsel” means Thompson Hine LLP, with offices located at 335 Madison
Avenue, 11th Floor, New York, New York 10017-4611.

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

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

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

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

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

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

“Exempt Issuance” means the issuance of (a) shares of
Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted
for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a
committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or
conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into
shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been
amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price,
exchange price or conversion price of such securities, and (c) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only
be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company, but
shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to
an entity whose primary business is investing in securities.

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

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

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

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

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

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

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

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

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

     

     

    

“Notes”
means the Convertible Secured Promissory Notes due, subject to the terms therein, 6 months from their date of issuance, issued
by the Company to the Purchasers hereunder, in the form of Exhibit A attached hereto.

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

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

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

“Principal
Amount” means, as to each Purchaser, the amounts set forth below such Purchaser’s signature block on the signature
pages hereto next to the heading “Principal Amount,” in United States Dollars.

“Pro
Rata Portion” shall have the meaning ascribed to such term in Section 4.12(e).

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

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

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

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

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

“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants
or conversion in full of all Notes (including Underlying Shares issuable as payment of interest on the Notes), ignoring any conversion
or exercise limits set forth therein, and assuming that the Conversion Price is at all times on and after the date of determination
75% of the then Conversion Price on the Trading Day immediately prior to the date of determination.

“Robinson
Brog” means Robinson Brog Leinwand Greene Genovese & Gluck P.C., with offices located at 875 Third Avenue, New York,
New York 10022.

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

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

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

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

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

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

     

     

    

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

“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable shares of Common Stock). 

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

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

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

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

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

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

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

“Transfer
Agent” means Pacific Stock Transfer, the current transfer agent of the Company, with a mailing address of 6725 Via Austi
Parkway – Suite 300, Las Vegas, NV 89119, and any successor transfer agent of the Company.

“Transfer
Agent Instruction Letter” means the letter from the Company to the Transfer Agent which instructs the Transfer Agent
to issue Underlying Shares pursuant to the Transaction Documents, in the form of Exhibit D attached hereto.

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

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

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

“Warrants” means, collectively, the Common Stock purchase
warrants delivered to the Purchasers at the Closing in accordance with Section 2.3(a) hereof, which Warrants shall be exercisable
immediately and have a term of exercise equal to four (4) years, in the form of Exhibit B attached hereto.

     

     

    

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

ARTICLE II. 

PURCHASE AND SALE

2.1 Purchase. The Purchasers will purchase an aggregate of up to $1,500,000 in Subscription Amount corresponding to an aggregate
of up to $1,600,000 in Principal Amount of Notes, on the Closing Date.

2.2  Closing. On the Closing Date, upon the terms and subject
to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties
hereto, the Company agrees to sell, and each Purchaser, severally and not jointly, agrees to purchase, such Purchaser’s
Closing Subscription Amount as set forth on the signature page hereto executed by such Purchaser (an aggregate of up to
$1,500,000 in Subscription Amount corresponding to an aggregate of up to $1,600,000 in Principal Amount of Notes). At the
Closing Date, each Purchaser shall deliver to the Company, via wire transfer or a certified check, immediately available
funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such
Purchaser, and the Company shall deliver to each Purchaser its respective Note and a Warrant, as determined pursuant to
Section 2.3(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.3 deliverable at the
Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4 the Closing shall occur at the
offices of Robinson Brog or such other location as the parties shall mutually agree.

2.3
Deliveries.

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

 (i) this Agreement duly executed by the Company;

(ii) the Transfer Agent Instruction Letter duly executed by the Company and the Transfer Agent;

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

(iv) a Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100% of the Principal
Amount of the Note issuable to such Purchaser at the Closing, divided by the Conversion Price, with an exercise price of $1.00;

(v) the Security Agreement, duly executed by the Company and each Subsidiary, along with all of the Security Documents, duly executed
by the parties thereto; and

(vi)customary lock-up agreements from all the Company’s
officers in the form of Exhibit E, attached hereto.

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

 (i) this Agreement duly executed by such Purchaser;

(ii)  such Purchaser’s Subscription Amount, by wire transfer to the account specified in writing by the Company; and

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

2.4
Closing Conditions.

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

     

     

    

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

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

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

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

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

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

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

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

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

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

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

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

(a)  Subsidiaries. The Company has no subsidiaries,
and all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

     

     

    

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

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

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

(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.6 of this Agreement, (ii) the notice and/or application(s) to each applicable
Trading Market for the issuance and sale of the Securities and the listing of the Conversion Shares and Warrant Shares for trading
thereon in the time and manner required thereby and (iii) the filing of Form D with the Commission and such filings as are required
to be made under applicable state securities laws (collectively, the “Required Approvals”).

     

     

    

(f) Issuance of the Securities. The Securities are duly authorized
and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully
paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in
the Transaction Documents. The Underlying Shares, when issued in accordance with the terms of the Transaction Documents, will
be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents. The Company will reserve within 72 hours after the Closing from its duly authorized
capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the greater of (a) 300%
of the Required Minimum on the date hereof, and (b) 19.9% of the current shares outstanding in the Company.

(g)
Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g)
shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of
the date hereof. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities,
there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance
and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other
than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange
or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none
of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale
of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s
stockholders.

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

     

     

    

(i)
Material Changes; Undisclosed Events, Liabilities or Developments. Except as set forth on Schedule 3.1(i), 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 altered its method of accounting, (iii) 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, (iv) the Company has not declared or made
any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any
request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement or
as set forth on Schedule 3.1(i), to the best of the Company’s knowledge, 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.

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

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

     

     

    

(l)
Compliance. Neither the Company nor any Subsidiary, to the best of the Company’s knowledge: (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, except for laws related to the prohibition of cannabis.

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

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

(o)
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.

(p)
Sarbanes-Oxley; Internal Accounting Controls. To the best of the Company’s knowledge, 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 applicable Closing Date.

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

     

     

    

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

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

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

(u)
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

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

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

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

     

     

    

(y)
Intentionally Omitted.

(z) 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.

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

(bb) 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.

(cc)
Accountants. The Company’s accounting firm is set forth on Schedule 3.1(ee) of the Disclosure Schedules. To
the knowledge and belief of the Company, such accounting firm: (i) is a registered public accounting firm as required by the Exchange
Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report
for the fiscal year ending December 31, 2015.

(dd)
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 which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents.

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

(ff) Seniority. Except as set forth on Schedule 3.1
(ff), as of each Closing Date, no Indebtedness or other claim against the Company is senior to the Notes in right of payment,
whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase
money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations (which is
senior only as to the property covered thereby).

     

     

    

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

(iii) paid or agreed to pay to
any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of
clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Securities.

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

(ii) 
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”).

(jj)
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation
within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.

(kk) 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.

(ll)
Money Laundering. To the best of the Company’s knowledge, 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.

(mm) Anti-Dilution. Except as set forth on Schedule
3.1 (mm), no current holders of warrants of the Company have, as at the Closing, warrants containing anti-dilution or ratchet
provisions.

     

     

    

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

(oo)
Other Covered Persons. Other than the placement agent, the Company is not aware of any person (other than any Issuer Covered
Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with
the sale of any Regulation D Securities pursuant to this offering.

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

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

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

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

(c) Purchaser Status. At the time such Purchaser
was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any Warrants or converts
any Notes it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act.

     

     

    

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

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

(f) Certain Transactions and Confidentiality.
Other than consummating the transactions contemplated hereunder, such Purchaser has not directly or indirectly, nor has any
Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any purchases or sales, including
Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first
received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the
material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s
assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons
party to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this transaction).

(g) Access to Information. Such Purchaser acknowledges
that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC
Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers
from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and
risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to
obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the
Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect
to the Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made
or makes any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have
acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it. In connection
with the issuance of the Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial
advisor or fiduciary to such Purchaser.  Except where such representations conflict, the Company acknowledges and agrees
that the representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the
Company’s representations and warranties contained in this Agreement or any representations and warranties contained in
any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transaction contemplated hereby.

ARTICLE IV. 

OTHER AGREEMENTS OF THE PARTIES

4.1 Transfer Restrictions.

     

     

    

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

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

[NEITHER] THIS SECURITY [NOR
THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
..

(c) Certificates evidencing the Underlying Shares shall
not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) following any sale of such Underlying
Shares pursuant to Rule 144, or (ii) if such legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall cause
counsel to issue a legal opinion to the Transfer Agent, at the cost of the Company, promptly after any of the events
described in (i)-(ii) in the preceding sentence if required by the Transfer Agent to effect the removal of the legend
hereunder (with a copy to the applicable Purchaser and its broker). If all or any portion of a Note is converted (as provided
in a Note) or Warrant is exercised at a time when such legend is not otherwise required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such
Underlying Shares shall be issued free of all legends. The Company agrees that following the Effective Date or at such time
as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading Days following the
delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable,
issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to
be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends.
The Company may not make any notation on its records or give instructions to the Transfer Agent that elarge the restrictions
on transfer set forth in this Section 4. Certificates for Underlying Shares subject to legend removal hereunder shall be
transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with
the Depository Trust Company System as directed by such Purchaser.

(d) In addition to such Purchaser’s other available
remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of
Underlying Shares (based on the VWAP of the Common Stock on the date such Securities are submitted to the Transfer Agent) delivered
for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five
(5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate
is delivered without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s
failure to deliver certificates representing any Securities as required by the Transaction Documents, and such Purchaser shall
have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief.

     

     

    

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

4.3
Furnishing of Information; Public Information.

(a) If the Common Stock is not registered under Section
12(b) or 12(g) of the Exchange Act on the date hereof, the Company agrees to cause the Common Stock to be registered under
Section 12(g) of the Exchange Act on or before the 60th calendar day following the date hereof. Until the earliest
of the time that no Purchaser owns Securities, the Company covenants to maintain the registration of the Common Stock under
Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act
even if the Company is not then subject to the reporting requirements of the Exchange Act.

(b) At any time during the period commencing from
the six (6) month anniversary of the date hereof and ending at such time that all of the Securities may be sold without the
requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant
to Rule 144, if the Company shall fail for any reason to satisfy the current public information requirement under Rule 144(c)
(a “Public Information Failure”), Purchaser may provide written notice to the Company of the Public
Information Failure (“PIF Notice”). If the Public Information Failure is not cured within three (3)
Trading Days following the date that PIF Notice is received by the Company, then, in addition to such Purchaser’s other
available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by
reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%)
of the aggregate Subscription Amount of such Purchaser’s Securities on the 3rd (third) Trading Day following the date
that PIF Notice is received by the Company and on every thirtieth (30th) day (pro rated for periods totaling less
than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time
that such public information is no longer required  for the Purchasers to transfer the Underlying Shares pursuant to
Rule 144.  The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as
“Public Information Failure Payments.”  Public Information Failure Payments shall be paid on
the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are
incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public
Information Failure Payments is cured.  In the event the Company fails to make Public Information Failure Payments
in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month
(prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual
damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at
law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

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

     

     

    

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

4.6 Securities Laws Disclosure; Publicity. The
Company shall file a Current Report on Form 8-K (if required by the Exchange Act), including the Transaction Documents as
exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such 8-K,
the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered
to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees
or agents in connection with the transactions contemplated by the Transaction Documents. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except: (a) as
required by federal securities law and (b) to the extent such disclosure is required by law or Trading Market regulations, in
which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).

4.7
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other
Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

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

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

     

     

    

4.10 Indemnification of Purchasers. Subject to
the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers,
shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating
to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or
in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them
or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with
respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of
such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or
understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or
federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct
or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be
sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall
have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.
Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that
(i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable
opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such
separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a
Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or
delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.10 shall be
made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are
received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar
right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to
law.

4.11 
Reservation and Listing of Securities.

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

(b) If, on any date beginning 72 hours after the Closing,
the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the greater of (i) 300% of
the Required Minimum, or (ii) 19.9% of the current shares outstanding in the Company, in the name of the Purchasers, on such date,
then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate or articles of
incorporation to increase the number of authorized but unissued shares of Common Stock to the greater of (i) 300% of the Required
Minimum, or (ii) 19.9% of the current shares outstanding in the Company, in the name of the Purchasers, at such time, as soon
as possible and in any event not later than the 75th day after such date.

     

     

    

(c)
The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such
Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required
Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for
listing or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing
or quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum
on such date on such Trading Market or another Trading Market.

4.12 
Participation in Future Financing.

(a) From the date hereof until the date that no principal amount under the Notes remains outstanding, upon any issuance by the Company
or any of its Subsidiaries of Common Stock, Common Stock Equivalents or debt for cash consideration, Indebtedness or a combination
thereof (a “Subsequent Financing”), the Purchasers shall, collectively, have the right to participate in the
Subsequent Financing in an amount up to 50% of the Subsequent Financing (the “Participation Maximum”) on the
same terms, conditions and price provided for in the Subsequent Financing.

(b)
(i) At least twelve (12) hours prior to the pricing of the Subsequent Financing if such Subsequent Financing will be a registered
offering pursuant to Form S-1 or Form S-3, or, (ii) three days prior to the closing of the Subsequent Financing if such Subsequent
Financing will not be a registerd offering pursuant to Form S-1 or Form S-3 (the “Subsequent Financing Notice Period”),
the Company shall deliver to each Purchaser a written notice of its intention to effect a Subsequent Financing (the “Subsequent
Financing Notice”), which Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such
Subsequent Financing, the Persons as parties to the Subsequent Financing, the amount of proceeds intended to be raised thereunder
and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected, and shall include a term
sheet or similar document relating thereto as an attachment.

(c)
Any Purchaser desiring to participate in such Subsequent Financing must provide, before the expiration of the Subsequent Financing
Notice Period, written notice to the Company that such Purchaser is willing to participate in the Subsequent Financing, the amount
of such Purchaser’s participation, and represent and warrant that such Purchaser has such funds ready, willing, and available
for investment on the terms set forth in the Subsequent Financing Notice.

(d)
If notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees
to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may effect the
remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice.

(e)  If the Company receives responses to a
Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation Maximum,
each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation
Maximum.  “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased
by a Purchaser participating under this Section 4.12 and (y) the sum of the aggregate Subscription Amounts of Securities
purchased by all Purchasers participating under this Section 4.12.

(f)
The Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right
of participation set forth above in this Section 4.12, if the Subsequent Financing subject to the initial Subsequent Financing
Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading
Days after the date of the initial Subsequent Financing Notice.

(g) The Company and
each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents related
to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required to agree to any restrictions
on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or termination of, or
grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of such Purchaser.

     

     

    

(h) Notwithstanding anything to the contrary in this Section 4.12 and unless otherwise agreed to
by such Purchaser, the Company shall either confirm in writing to such Purchaser that the transaction with respect to the Subsequent
Financing has been abandoned or shall publicly disclose its intention to issue the securities in the Subsequent Financing, in
either case in such a manner such that such Purchaser will not be in possession of any material, non-public information, by the
tenth (10th) Business Day following delivery of the Subsequent Financing Notice. If by such tenth (10th) Business Day, no public
disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment
of such transaction has been received by such Purchaser, such transaction shall be deemed to have been abandoned and such Purchaser
shall not be deemed to be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries.
 

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

4.13
Intentionally Omitted.

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

4.15
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any Short Sales,
of any of the Company’s securities from the date hereof until the earlier of (x) the six (6) month anniversary of the date
hereof and (y) the date that the Notes are no longer outstanding (provided that this provision shall not prohibit any sales made
where a corresponding Notice of Conversion or Notice of Exercise is tendered to the Company and the shares received upon such
conversion or exercise are used to close out such sale) (a “Prohibited Short Sale”).  Each Purchaser,
severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement
are publicly disclosed by the Company, such Purchaser will maintain the confidentiality of the existence and terms of this transaction
and the information included in the Transaction Documents and the Disclosure Schedules. Form D; Blue Sky Filings. The Company
agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly
upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order
to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the applicable Closing under applicable
securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.

4.16
Registration Statement. The Company shall file a registration statement on Form S-1, to register at least $2,000,000 of
Common Stock or Common Stock Equivalents, identifying [Chardan] as a co-lead/joint-book running manager, within thirty (30) days
of the Closing Date.

4.17 Maturity Date Kicker. If the Company does not repay the Note
in full by the six (6) month anniversary of the Closing Date, then the Company shall issue to the Purchasers up to five
hundred thousand (500,000) shares of Common Stock (in aggregate to all Purchasers), pro rata to the outstanding principal
amounts of their respective Notes at the Closing Date as compared to the Purchasers’ aggregate Principal Amount at
Closing, within three (3) days after such six (6) month anniversary. The following example illustrates the application of
Section 4.17: If at the Closing Date, three Purchasers (Purchaser A, Purchaser B and Purchaser C) originally each held Notes
with a Principal Amount of $500,000, for an aggregated Principal Amount of $1,500,000, and at the Maturity Date, Purchase A
and Purchaser B each hold Notes with remaining outstanding principal amounts of $400,000 and $250,000, respectively, each
Purchaser would receive the amounts calculated as follows:

     

     

    

	•		Purchaser A would receive 133,333 shares of Common Stock (calculated as: ($400,000/$1,500,000)
* 500,000 shares) = 133,333 shares)

	•		Purchaser B would receive 83,333 shares of Common Stock (calculated as follows: ($250,000/$1,500,000)
* 500,000 shares) = 83,333 shares)

	•		Purchaser C would not receive any shares (calculated as follows: ($0/$1,500,000) *
500,000 shares) = 0 shares)

 

ARTICLE V. 

MISCELLANEOUS

5.1
Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder
only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the
other parties, if the Closing has not been consummated on or before March [____], 2016; provided, however, that
such termination will not affect the right of any party to sue for any breach by any other party (or parties).

5.2
Fees and Expenses. At the Closing, the Company has agreed to reimburse the Purchasers $25,000 for their legal fees, which
shall be paid in full at the Closing. Accordingly, in lieu of the foregoing payments, the aggregate amount that the Purchasers
are to pay for the Securities at the Closing shall be reduced by $25,000. The Company shall deliver to each Purchaser, prior to
each Closing, a completed and executed copy of the Closing Statement, attached hereto as Annex A. Except as expressly set
forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any
fees required for same-day processing of any instruction letter delivered by the Company and any conversion or exercise notice
delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to
the Purchasers.

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

5.4
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New
York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading
Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom
such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages
attached hereto.

5.5 Amendments; Waivers. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers
holding at least 67% in interest of the Securities then outstanding or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right.

     

     

    

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

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

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

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

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

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

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

     

     

    

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

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

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

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

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

     

     

    

5.18 Independent Nature of Purchasers’ Obligations and
Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations
of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the
obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in
any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation,
the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative
convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through Robinson
Brog. Robinson Brog does not represent any of the Purchasers and only represents Dominion. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by any of the Purchasers.

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

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

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

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

(Signature Pages
Follow)

     

     

    

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

	Massroots, Inc.

         

         
	Address for Notice:
	By:__________________________________________

        Name:

        Title:

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

         

         
	 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

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

Name of Purchaser: ________________________________________________________

Signature of Authorized Signatory
of Purchaser: __________________________________

Name of Authorized Signatory: ____________________________________________________

Title of Authorized Signatory: _____________________________________________________

Email Address of Authorized Signatory:
_____________________________________________

Facsimile Number of Authorized Signatory: __________________________________________

Address for Notice to Purchaser:

 

 

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

 

 

Closing Subscription Amount: _____________

 

Closing Principal Amount: _____________

 

Warrant Shares: _________________

 

 

EIN Number: _______________________

 

[SIGNATURE PAGES CONTINUE]

     

     

    

Annex A 

 

CLOSING STATEMENT

 

Pursuant to the attached Securities Purchase
Agreement, dated as of the date hereto, the purchasers shall purchase Notes and Warrants from MassRoots, Inc. (the “Company”).
All funds will be wired into an account maintained by the Company. All funds will be disbursed in accordance with this Closing
Statement.

 

Disbursement
Date:March [__], 2016

 

 

	I. PURCHASE PRICE

         
	 
	 	Gross Proceeds
    to be Received 	$
	 	 
	II.DISBURSEMENTS

         
	 
	 	 	$
	 	 	$
	 	 	$
	 	 	$
	 	 	$
	 	 
	Total Amount Disbursed:	$
	 	 
	 	 
	 	 
	WIRE INSTRUCTIONS:

         

         
	 
	 	 
	To: _____________________________________

         

         

        Duly executed this [_]th day of March,
        2016:

         

        MassRoots, inc.

         

        By: ___________________

        Name:

        Title:

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