Document:

Exhibit 4.1

 

 

 

NEITHER THIS SECURITY
NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE 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. THIS SECURITY
AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

 

Original Issue Date: June 11, 2015

 

Purchase Amount: $[_______]

Principal Amount: $[_______][1]

 

 

8%
Original Issue Discount CONVERTIBLE NOTE

DUE
December 11, 2015

 

THIS 8% ORIGINAL ISSUE
DISCOUNT CONVERTIBLE NOTE is one of a series of duly authorized and validly issued 8% Original Issue Discount Convertible Notes
of xG Technology, Inc. (the “Company”), having its principal place of business at 240 S. Pineapple Avenue,
Suite 701, Sarasota, FL, 34236, designated as its 8% Original Issue Discount Convertible Note due December 11, 2015 (the “Note”
and, collectively with the other Notes of such series, the “Notes”).

 

FOR VALUE RECEIVED,
the Company promises to pay to [_________] or its registered assigns (the “Holder”), or shall have paid pursuant
to the terms hereunder, the principal sum of $[_______] on December 11, 2015 (the “Maturity Date”) or such
earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the
aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof. If the Note
is not repaid by the Company by the Maturity Date, the Maturity Date shall be automatically extended in accordance with the Extension
Period (as defined herein). This Note is subject to the following additional provisions:

 

 

 1 10%
OID

 

    	 

    	 

    

 

 

Section 1. Definitions.
For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined
herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

“Alternative
Conversion Price” means 85% of the lowest closing price of the Common Stock in the twenty (20) Trading Days prior to
the Conversion Date.

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary thereof commences a case or
other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency
or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is
commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within sixty
(60) days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any
order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary
thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged
or stayed within sixty (60) calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes
a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its
creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company or any Significant
Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the
foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).

 

“Buy-In”
shall have the meaning set forth in Section 4(c)(v).

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise)
of in excess of 33% of the voting securities of the Company (other than by means of conversion or exercise of the Notes and the
Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges
into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately
prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction,
(c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company
immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after
the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board
of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original
Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board
of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the
execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events
set forth in clauses (a) through (d) above.

 

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“Company”
shall have the meaning set forth in the preamble hereto.

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Price” shall have the meaning set forth in Section 4(b).

 

“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the
terms hereof.

 

“DTC”
means the Depository Trust Company.

 

“DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer Program.

 

“DWAC
Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements,
(b) the Company has been approved (without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved
as an agent in the DTC/FAST Program, and (d) the Transfer Agent does not have a policy prohibiting or limiting delivery of the
Conversion Shares via Deposit/Withdrawal at Custodian.

 

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“Equity
Conditions” means each of the following conditions: (a) the Company shall have duly honored all conversions and redemptions
scheduled to occur or occurring, including conversions pursuant to one or more Notices of Conversion of the Holder, if any, (b)
the Company shall have paid all liquidated damages and other amounts owing to the Holder in respect of this Note, (c) on each
day during the Equity Conditions Measuring Period, either (i) there is an effective registration statement pursuant to which the
Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to the
Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable
future) or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents (and shares issuable in lieu of cash
payments of interest) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions as determined by the counsel
to the Company as set forth in a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the
Holder, (d) on each day during the Equity Conditions Measuring Period, the Common Stock is trading on a Trading Market and all
of the shares of Common Stock issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading
Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted
for the foreseeable future), (e) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common
Stock for the issuance of all of the shares of Common Stock then issuable pursuant to the Transaction Documents, (f) on each day
during the Equity Conditions Measuring Period, there is no existing Event of Default and no existing event which, with the passage
of time or the giving of notice, would constitute an Event of Default, (g) the issuance of the shares of Common Stock in question
to the Holder would not violate the limitations set forth in Section 4(d) herein, (h) on each day during the Equity Conditions
Measuring Period, there has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control
Transaction that has not been consummated, (i) the applicable Holder is not in possession of any information provided by the Company
that constitutes, or may constitute, material non-public information, (j) the Company has timely filed (or obtained extensions
in respect thereof and filed within the applicable grace period) all reports other than Current Reports on Form 8-K required to
be filed by the Company after the date hereof pursuant to the Exchange Act, (k) on any date that the Company desires to make a
payment of interest and/or principal, the average daily dollar volume of the Company’s Common Stock for the previous twenty
(20) Trading Days must be greater than $50,000, and (l) on each day during the Equity Conditions Measuring Period, the Company’s
shares of Common Stock must be DWAC Eligible and not subject to a “DTC chill”.

 

"Equity
Conditions Measuring Period" means each day during the period beginning twenty (20) Trading Days prior to the applicable
date of determination and ending on and including the applicable date of determination or, if applicable, such shorter period
beginning on the Original Issue Date and ending on and including the applicable date of determination.

 

“Event
of Default” shall have the meaning set forth in Section 6(a).

 

“Excess
Shares” shall have the meaning set forth in Section 4(d).

 

“Extension
Period” means, if the Note is not repaid by the Company by the Maturity Date, the automatic extension of the Maturity Date
for an additional three (3) months until March 11, 2016, which extension, for the avoidance of doubt, shall not be considered
an Event of Default.

 

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“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“Holder”
shall have the meaning set forth in the preamble hereto.

 

“Late
Fees” shall have the meaning set forth in Section 2(c).

 

“Maturity
Date” shall have the meaning set forth in the preamble hereto.

 

“New
York Courts” shall have the meaning set forth in Section 7(d).

 

“Note”
shall have the meaning set forth in the preamble hereto.

 

“Note
Register” shall have the meaning set forth in Section 2(b).

 

“Notice
of Conversion” shall have the meaning set forth in Section 4(a).

 

“Original
Issue Date” means the date of the first issuance of this Note, regardless of any transfers of any Note and regardless
of the number of instruments which may be issued to evidence such Note.

 

“Public
Offering” means any underwritten public offering of at least $7,000,000 of securities of the Company pursuant to a registration
statement on Form S-1 or Form S-3. 

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of June 11, 2015 between the Company and the original Holder,
as amended, modified or supplemented from time to time in accordance with its terms.

 

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

 

“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).

 

“Significant
Subsidiary” means “significant subsidiary,” as such term is defined in Rule 1-02(w) of Regulation S-X.

 

“Successor
Entity” shall have the meaning set forth in Section 5(e).

 

 Section 2. Interest.

 

a) Payment
of Interest in Cash or Kind. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Note at the rate of 8% per annum. All interest payments hereunder will be payable in cash, or subject
to the Equity Conditions being satisfied, in Common Stock or a combination of cash and Common Stock in the Holder’s discretion.
Accrued and unpaid interest shall be due and payable on each Conversion Date and on the Maturity Date, or as otherwise set forth
herein.

 

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b) Interest
Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and
shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together with all
accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest hereunder
will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers
of this Note (the “Note Register”).

 

c) Late
Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the
lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue
daily from the date such interest is due hereunder through and including the date of actual payment in full.

 

d) Prepayment.

 

i. Optional
Prepayment. At any time upon three (3) days written notice to the Holder, the Company may prepay any portion of the principal
amount of the Note and any accrued and unpaid interest. If the Company exercises its right to prepay the Note, the Company shall
make payment to the Holder of an amount in cash equal to the sum of the then outstanding principal amount of the Note and interest
multiplied by 125% if such prepayment is made within sixty (60) days after the Closing Date; thereafter, if the Company exercises
its right to prepay the Note, the Company shall make payment to the Holder of an amount in cash equal to the sum of the then outstanding
principal amount of the Note and interest multiplied by 135%. The Holder may continue to convert the Note from the date notice
of the prepayment is given until the date of the prepayment.

 

ii. Mandatory
Prepayment. Within one (1) Business Day after the closing of the Public Offering, the Company shall make payment to the Holder
of an amount in cash equal to (x) the sum of the then outstanding principal amount of the Note and interest multiplied by 125%,
if the closing of the Public Offering occurs within sixty (60) days after the Closing Date or (y) the sum of the then outstanding
principal amount of the Note and interest multiplied by 135%, if the closing of the Public Offering occurs after sixty (60) days
following the Closing Date.

 

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Section 3. Registration
of Transfers and Exchanges.

 

a) Different
Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

 

b) Investment
Representations. This Note has been issued subject to certain investment representations of the original Holder set forth
in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal
and state securities laws and regulations.

 

c) Reliance
on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company
may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary.

 

Section 4. Conversion.

 

a) Voluntary
Conversion. From the date hereof until this Note is no longer outstanding, this Note shall be convertible, in whole or in
part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations
set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion,
the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein
the principal amount of this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion
Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such
Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder,
the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note,
plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the
outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain
a Conversion Schedule showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an
objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any
dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The
Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph,
following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the
amount stated on the face hereof.

 

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b) Conversion
Price. The conversion price in effect on any Conversion Date shall be equal to $0.50, subject to adjustment as provided herein
(the “Conversion Price”). However, during the Extension Period, the Conversion Price shall be the lesser of
(i) $0.50, subject to adjustment as provided herein, and (ii) the Alternative Conversion Price. Notwithstanding anything herein
to the contrary, at any time after the occurrence of any Event of Default the Holder may require the Company to, at such Holder’s
option and otherwise in accordance with the provisions for conversion herein, convert all or any part of this Note into Common
Stock at the Alternative Conversion Price. All such foregoing determinations will be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common
Stock during such measuring period. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event
of Default pursuant to Section 6 hereof and the Holder shall have the right to pursue all remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of
any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable
law.

 

		c)	Mechanics of Conversion.

 

i. Conversion
Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder
shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted and
any accrued and unpaid interest to be converted by (y) the Conversion Price.

i. 

 

ii. Delivery
of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing
the Conversion Shares which, on or after the date on which such Conversion Shares are eligible to be sold under Rule 144 without
the need for current public information and the Company has received an opinion of counsel to such effect reasonably acceptable
to the Company (which opinion the Company will be responsible for obtaining) shall be free of restrictive legends and trading
restrictions (other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares
being acquired upon the conversion of this Note, and (B) a bank check in the amount of accrued and unpaid interest to be paid
in cash (if the Company has elected or is required to pay any accrued interest in cash). All certificate or certificates required
to be delivered by the Company under this Section 4(c) shall be delivered electronically through DTC or another established clearing
corporation performing similar functions. If the Conversion Date is prior to the date on which such Conversion Shares are eligible
to be sold under Rule 144 without the need for current public information the Conversion Shares shall bear a restrictive legend
in the following form, as appropriate:

 

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

 

Notwithstanding the foregoing,
commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public information
requirements, the Company, upon request of the Holder, shall obtain a legal opinion to allow for such sales under Rule 144.

 

iii. Failure
to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to
or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to
the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event
the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return
to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Notice of Conversion.

 

iv. Obligation
Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion
of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the
Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law
by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery
shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder
of this Note shall elect to convert any or all of the outstanding principal or interest amount hereof, the Company may not refuse
conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation
of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining
conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit
of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which
bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which
shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion
Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder
such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading Day after such Share Delivery Date
until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to
pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Company’s failure to deliver Conversion
Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of
any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable
law.

 

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v. Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder,
if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant
to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm 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 Conversion Shares which the Holder was entitled to receive upon the conversion
relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in
addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total
purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate
number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual
sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions)
and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount
of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares
of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii).
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 conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total 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 certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.

 

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vi. Reservation
of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to 200% of the Required Minimum
(as defined in the Purchase Agreement) for the sole purpose of
issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights
or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less
than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase
Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding
principal amount of this Note and payment of interest hereunder. The Company covenants that all shares of Common Stock that shall
be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable. 

 

vii. Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, 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 Conversion Price or round up to the next whole share.

 

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viii. Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without
charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this
Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of
any Notice of Conversion.

 

		d)	Holder’s Conversion Limitations.
                                         The Company shall not effect any conversion of principal and/or interest of this Note,
                                         and a Holder shall not have the right to convert any principal and/or interest of this
                                         Note, to the extent that after giving effect to the conversion set forth on the applicable
                                         Notice of Conversion, the Holder (together with the Holder’s Affiliates (as defined
                                         in the Purchase Agreement), and any 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 conversion of this Note
                                         with respect to which such determination is being made, but shall exclude the number
                                         of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted
                                         principal amount of this Note beneficially owned by the Holder or any of its Affiliates
                                         and (ii) exercise or conversion of the unexercised or unconverted portion of any other
                                         securities of the Company subject to a limitation on conversion or exercise analogous
                                         to the limitation contained herein (including, without limitation, any other Notes or
                                         warrants of the Company) beneficially owned by the Holder or any of its Affiliates. 
                                         Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial
                                         ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and
                                         the rules and regulations promulgated thereunder. 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 4(d), in determining the number of outstanding shares of Common Stock,
                                         the Holder may rely on the number of outstanding shares of Common Stock as stated in
                                         the most recent of the following: (i) the Company’s most recent periodic or annual
                                         report filed with the Commission, as the case may be, (ii) a more recent public announcement
                                         by the Company, or (iii) a more recent written notice by the Company or the Company’s
                                         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 (2) 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 Note, by the Holder or its Affiliates since the date as of
                                         which such number of outstanding shares of Common Stock was reported. In the event that
                                         the issuance of shares of Common Stock to the Holder upon conversion of this Note results
                                         in the Holder and its Affiliates being deemed to beneficially own, in the aggregate,
                                         more than the Beneficial Ownership Limitation (as determined under Section 13(d) of the
                                         Exchange Act), the number of shares of Common Stock so issued by which the Holder's and
                                         its Affiliates’ aggregate beneficial ownership exceeds the Beneficial Ownership
                                         Limitation (the "Excess Shares") shall be deemed null and void and shall
                                         be cancelled ab initio, and the Holder shall not have the power to vote or to transfer
                                         the Excess Shares. 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 conversion of this Note
                                         held by the Holder. The Holder, upon delivery of a written notice to the Company, may
                                         from time to time increase (with such increase not effective until the 61st day after
                                         delivery of such notice) or decrease the Beneficial Ownership Limitation provision to
                                         any other percentage not in excess of 9.99%; provided that (i) any such increase of the
                                         Beneficial Ownership Limitation will not be effective until the 61st day after such notice
                                         is delivered to the Company and (ii) any such increase or decrease will apply only to
                                         the Holder and its Affiliates and not to any other holder of Notes that is not an Affiliate
                                         of the Holder. The Beneficial Ownership Limitation provisions of this paragraph shall
                                         be construed and implemented in a manner otherwise than in strict conformity with the
                                         terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may
                                         be defective or inconsistent with the intended Beneficial Ownership Limitation contained
                                         herein 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 Note.

 

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Section 5. Certain
Adjustments.

 

		a)	Stock Dividends and Stock Splits.
                                         If the Company, at any time while this Note is outstanding: (i) pays a stock dividend
                                         or otherwise makes a distribution or distributions payable in shares of Common Stock
                                         on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt,
                                         shall not include any shares of Common Stock issued by the Company upon conversion of,
                                         or payment of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock
                                         into a larger number of shares, (iii) combines (including by way of a reverse stock split)
                                         outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in
                                         the event of a reclassification of shares of the Common Stock, any shares of capital
                                         stock of the Company, then the Conversion Price shall be multiplied by a fraction of
                                         which the numerator shall be the number of shares of Common Stock (excluding any treasury
                                         shares of the Company) outstanding immediately before such event, and of which the denominator
                                         shall be the number of shares of Common Stock outstanding immediately after such event.
                                         Any adjustment made pursuant to this Section 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 reclassification.

 

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		b)	Intentionally Omitted.

 

		c)	Subsequent Rights Offerings.
                                         In addition to any adjustments pursuant to Section 5(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 conversion of this Note (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)	Intentionally Omitted.

 

		e)	Fundamental Transaction. If,
                                         at any time while this Note 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, (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 whereby such other Person 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 conversion
                                         of this Note, the Holder shall have the right to receive, for each Conversion Share that
                                         would have been issuable upon such conversion immediately prior to the occurrence of
                                         such Fundamental Transaction (without regard to any limitation in Section 4(d) on the
                                         conversion of this Note), 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 Note is convertible immediately prior to such Fundamental Transaction (without
                                         regard to any limitation in Section 4(d) on the conversion of this Note). For purposes
                                         of any such conversion, the determination of the Conversion Price shall be appropriately
                                         adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
                                         issuable in respect of one (1) share of Common Stock in such Fundamental Transaction,
                                         and the Company shall apportion the Conversion 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 conversion
                                         of this Note following such Fundamental Transaction. 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
                                         Note and the other Transaction Documents (as defined in the Purchase Agreement) in accordance
                                         with the provisions of this Section 5(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 of
                                         this Note, deliver to the Holder in exchange for this Note a security of the Successor
                                         Entity evidenced by a written instrument substantially similar in form and substance
                                         to this Note which is convertible 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 conversion of this Note (without regard to any limitations
                                         on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion
                                         price which applies the conversion 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 conversion price being for the purpose of protecting
                                         the economic value of this Note 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 Note 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 Note
                                         and the other Transaction Documents with the same effect as if such Successor Entity
                                         had been named as the Company herein.

 

    	14

    	 

    

 

		f)	Calculations. All calculations
                                         under this Section 5 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 5, 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 any treasury shares of the Company) issued and outstanding.

 

		g)	Notice to the Holder.

 

i. Adjustment
to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall
promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.

 

ii. Notice
to Allow Conversion 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 of 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 filed at each office
or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address
as it shall appear upon the Note Register, at least twenty (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 deliver such notice or any defect therein or in the delivery 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 convert this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.

 

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 Section 6. Events of
Default.

 

a) “Event
of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether
such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental body):

 

i. any
default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages and other amounts owing to
a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or
by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above,
is not cured within three (3) Trading Days; provided that, in the case of any default in the payment of amounts due and payable
on the Maturity Date, if the Maturity Date is extended during the Extension Period, this Section 6(a)(i) shall only apply after
the termination of the Extension Period;

 

    	16

    	 

    

 

ii. the
Company shall fail to observe or perform any other material covenant or material agreement contained in the Notes (other than
a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed
in clause (xi) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) Trading Days
after notice of such failure sent by the Holder or by any other Holder to the Company and (B) ten (10) Trading Days after the
Company has become or should have become aware of such failure;

 

iii. a
default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which
the Company or any Subsidiary is obligated (and not covered by clause (vi) below);

 

iv. any
representation or warranty made in this Note, any other Transaction Document, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;

 

v. the
Company or any Significant Subsidiary shall be subject to a Bankruptcy Event;

 

vi. the
Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $100,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness
becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

vii. the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five (5) Trading Days or the transfer of shares of Common Stock through the Depository
Trust Company System is no longer available or “chilled”;

 

viii. the
Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of
all or in excess of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute
a Change of Control Transaction);

 

    	17

    	 

    

 

ix. the
Company shall fail for any reason to deliver certificates to a Holder on or prior to the third (3rd) Trading Day after a Conversion
Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement,
of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof;

 

x. the
Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it is not
in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);

 

xi. if
the Company or any Significant Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian
or liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make
a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or be the subject of an order for
relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute of any other jurisdiction or foreign country, (v) file a voluntary petition in bankruptcy, or a
petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of
a petition filed against it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance
of or for the purpose of effecting any of the foregoing;

 

xii. if
any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Significant
Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company
or any Significant Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Company or any Significant Subsidiary,
or of all or any substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for
any period of sixty (60) days;

 

xiii. the
occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company or
any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in the
aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after
the date thereof;

 

xiv. the
Company shall fail to maintain sufficient reserved shares of Common Stock pursuant to Section 4(c)(vi) of this Note or Section
4.10 of the Purchase Agreement; or

 

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xv. any
monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of forty-five (45) calendar days;

 

b) Remedies
Upon Event of Default. If any Event of Default occurs, then the outstanding principal amount of this Note, plus accrued but
unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become,
at the Holder’s election, immediately due and payable in cash. After the occurrence of any Event of Default that results
in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an additional interest rate equal to
the lesser of 2% per month (24% per annum) or the maximum rate permitted under applicable law. Upon the payment in full of all
amounts due to the Holder following an Event of Default, the Holder shall promptly surrender this Note to or as directed by the
Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any
presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period
enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration
may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder
of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 6(b). No such rescission or
annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

 Section 7. Miscellaneous.

 

a) Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation,
any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service, addressed to the Company, at the address set forth above, or such other facsimile number or address as the Company
may specify for such purposes by notice to the Holder delivered in accordance with this Section 7(a). Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile,
or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the
Holder appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at
the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 12:00 p.m. (New York
City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later
than 12:00 p.m. (New York City time) on any Trading Day, (iii) the second (2nd) Trading Day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required
to be given.

 

    	19

    	 

    

 

b) Absolute
Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this
Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the
Company. This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth herein.

 

c) Lost
or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

 

d) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note 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
conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense
of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts 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 such New York Courts, or such New York Courts are improper or 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 Note 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 applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of
this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

    	20

    	 

    

e) Amendment;
Waiver. The written consent of the Holder and each other holder of a Note shall be required for any change or amendment or
waiver of any provision to the Notes.

 

f) Failure
or Indulgence not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege.

 

g) Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.
If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and
the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder,
but will suffer and permit the execution of every such as though no such law has been enacted.

 

h) Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief.  The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity
(including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note.  The
Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof)
shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other
obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available
remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic
loss and without any bond or other security being required. The Company shall provide all information and documentation to the
Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions
of this Note.

 

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i) Payment
of Collection, Enforcement and Other Costs. If (i) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (ii) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors' rights and involving a claim under this Note, then the Company shall pay the
reasonable and documented out-of-pocket costs incurred by the Holder for such collection, enforcement or action or in connection
with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, attorneys' fees and disbursements.

 

j) Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.

 

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

 

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

 

(Signature Pages Follow)

 

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

 

	 	xG TECHNOLOGY, INC.
	 	 
	 	 
	 	By: 	 	 
	 	 	Name: Roger G. Branton

Title: Chief Financial Officer
	 	 	 
	 	Facsimile No. for delivery of Notices: (941) 954-8595
	 	 	 

 

 

    	23

    	 

    

 

ANNEX
A

 

 NOTICE OF CONVERSION

 

 

The
undersigned hereby elects to convert principal under the 8% Original Issue Discount Convertible Note due December 11, 2015 of
xG Technology, Inc. (the “Company”), into shares
of common stock of the Company (the “Common Stock”) according to the conditions hereof, as of the date written
below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay
all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested
by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes,
if any.

 

After giving effect
to the conversion provided for in this Notice of Conversion, the undersigned (together with its Affiliates) will beneficially
own no more than ___________________ shares of Common Stock.

 

The undersigned agrees
to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the
aforesaid shares of Common Stock.

 

Conversion calculations: 

Date to Effect Conversion:

 

Principal Amount of Note to be Converted:

 

Payment of Interest in Common
Stock __ yes __ no

If yes, $_____ of Interest Accrued
on Account of Conversion at Issue.

 

Number of shares of Common Stock
to be issued:

 

 

Signature:

 

Name:

 

Delivery Instructions:

 

 

    	 

    	 

    

Schedule 1

 

 CONVERSION SCHEDULE

 

This 8% Original Issue Discount Convertible
Note due on December 11, 2015 in the original principal amount of $[____] is issued by xG Technology, Inc. This Conversion Schedule
reflects conversions made under Section 4 of the above referenced Note.

 

Dated:

 

	
        Date of 

Conversion

(or for first entry, 

Original Issue Date)
	Amount of

 Conversion	
        Aggregate 

Principal 

Amount 

Remaining 

Subsequent
        to 

Conversion

        (or original 

Principal Amount)
	Company AttestExhibit 10.1

 

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this
“Agreement”) is dated as of June 11, 2015, between xG Technology, Inc. (the “Company”) and
each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser”
and collectively, the “Purchasers”). 

 

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

 

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

 

ARTICLE I. 

DEFINITIONS 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	1

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

  

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

 

“DTC” shall
have the meaning ascribed to such term in Section 4.16. 

 

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

 

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

 

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

 

    	2

    	 

    

 

“Exempt Issuance”
means the issuance of (i) securities issued under the Company’s equity incentive plan existing on the date of this Agreement
and any amendments thereto approved by the Board of Directors, including securities issuable upon conversion or exercise of such
securities, (ii) securities issued for consideration other than cash pursuant to a strategic arrangement, joint venture, merger,
consolidation, acquisition, or similar business combination approved by the Board of Directors but shall not include a transaction
in which the Company is issuing securities for the purpose of raising capital or to an entity whose primary business is investing
in securities and (iii) securities issued upon the exercise or exchange of or conversion of any Securities issued hereunder and/or
other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date
of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of such securities.

 

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

 

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

 

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

 

“Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred
in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to
be capitalized in accordance with GAAP.

 

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

 

“Irrevocable Transfer
Agent Instructions” shall have the meaning ascribed to such term in Section 4.16. 

 

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

 

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

 

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

 

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

 

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

 

    	3

    	 

    

 

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

 

“Note” means
the 8% Original Issue Discount Convertible Note due, subject to the terms therein, six (6) months from the date of issuance, issued
by the Company to the Purchasers hereunder, in the form of Exhibit A attached hereto. 

 

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

  

“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.13(b). 

 

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

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	4

    	 

    

 

“Securities”
means the Notes and the Underlying Shares. 

 

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

 

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

 

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

 

“Subsequent Financing”
shall have the meaning ascribed to such term in Section 4.13(a). 

 

“Subsequent Financing
Notice” shall have the meaning ascribed to such term in Section 4.13(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;
OTCQX, OTCQB or OTCBB (or any successors to any of the foregoing). 

  

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

 

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

  

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

 

    	5

    	 

    

 

ARTICLE II. 

PURCHASE AND SALE 

 

2.1   Purchase.  The
Purchasers will purchase an aggregate of $1,050,000 in Subscription Amount corresponding to an aggregate of $1,166,666 in Principal
Amount of Notes.

 

2.2   Closing.  On
the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company agrees to sell, and each Purchaser, severally and not jointly, agrees
to purchase, such Purchaser’s Closing Subscription Amount as set forth on the signature page hereto executed by such Purchaser
(an aggregate of $1,050,000 in Subscription Amount corresponding to an aggregate of $1,166,666 in Principal Amount of Notes).  At
the Closing, each Purchaser shall deliver to the Company, via wire transfer or a certified check, immediately available funds
equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and
the Company shall deliver to each Purchaser its respective Note, as determined pursuant to Section 2.3(a), and the Company and
each Purchaser shall deliver the other items set forth in Section 2.3 deliverable at the Closing.  Upon satisfaction
of the covenants and conditions set forth in Sections 2.3 and 2.4 for the Closing, the Closing shall occur at the offices of the
Purchaser’s counsel or such other location as the parties shall mutually agree.

 

2.3   Deliveries.

 

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

 

(i)   this Agreement
duly executed by the Company; 

 

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

 

(iii) the opinion of Company
Counsel, dated as of the Closing Date, in the form previously provided to the Company.

 

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

 

(i)  this Agreement duly
executed by such Purchaser; and

 

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

 

2.4   Closing Conditions.

 

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

 

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

 

    	6

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

  

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

 

    	7

    	 

    

 

ARTICLE III. 

REPRESENTATIONS AND WARRANTIES 

 

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

 

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

 

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

  

(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.

    	8

    	 

    

 

(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 4.14 of this Agreement, (ii) the notice and/or application(s) to each applicable Trading
Market for the issuance and sale of the Securities and the listing of the Conversion Shares for trading thereon in the time and
manner required thereby and (iii) the filing of Form D with the Commission and such filings as are required to be made under applicable
state securities laws (collectively, the “Required Approvals”).

 

(f)   Issuance of the
Securities.  The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the Transaction Documents.  The Underlying Shares, when
issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and
clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company
will reserve from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at
least equal to 200% of the Required Minimum on the date hereof.

 

    	9

    	 

    

 

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

 

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

 

    	10

    	 

    

 

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

 

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

 

    	11

    	 

    

 

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

 

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

   

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

 

    	12

    	 

    

 

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

 

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

 

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

 

    	13

    	 

    

 

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

 

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

 

    	14

    	 

    

  

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

 

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

 

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

 

(v)   Listing and Maintenance
Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration.  Except as set forth in the SEC Reports, the Company has not, in the twelve (12) months preceding
the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. 

 

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

 

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

 

    	15

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	17

    	 

    

 

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

 

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

 

(ll) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except
for Sections 3.2(f) and 4.12 hereof), it is understood and acknowledged by the Company that: (i) the Purchaser has not been asked
by the Company to agree, nor has the Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of
the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any
specified term; (ii) past or future open market or other transactions by the Purchaser, specifically including, without limitation,
Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions,
may negatively impact the market price of the Company’s publicly-traded securities; (iii) the Purchaser, and counter-parties
in “derivative” transactions to which the Purchaser is a party, directly or indirectly, may presently have a “short”
position in the Common Stock; and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction. The Company further understands and acknowledges
that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding,
including, without limitation, during the periods that the value of the Underlying Shares deliverable with respect to Securities
are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests
in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

 

    	18

    	 

    

 

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

 

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

 

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

 

(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.

 

    	19

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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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 [CONVERTIBLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS
SECURITY [AND THE SECURITIES ISSUABLE UPON [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 

 

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

 

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(c)   Certificates evidencing
the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration
statement covering the resale of such security is effective under the Securities Act; (ii) following any sale of such Underlying
Shares pursuant to Rule 144; or (iii) if such legend is not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall cause its counsel to issue
a legal opinion to the Transfer Agent promptly after any of the events described in (i)-(iii) in the preceding sentence if required
by the Transfer Agent to effect the removal of the legend hereunder (with a copy to the applicable Purchaser and its broker).
If all or any portion of a Note is converted at a time when there is an effective registration statement to cover the resale of
the Underlying Shares, or if such Underlying Shares may be sold under Rule 144 or if such legend is not otherwise required under
applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the
Commission) then such Underlying Shares shall be issued free of all legends.  The Company agrees that following the
Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than two (2)
Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Underlying
Shares, as applicable, issued with a restrictive legend (such third (3rd) Trading Day, the “Legend Removal Date”),
deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and
other legends.  The Company may not make any notation on its records or give instructions to the Transfer Agent that
enlarge the restrictions on transfer set forth in this Section 4.  Certificates for Underlying Shares subject to legend
removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s
prime broker with the Depository Trust Company System as directed by such Purchaser.

 

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

 

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

 

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4.3   Reporting Status; Public
Information.

 

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

 

(b)    At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of
the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if the Company shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) (a “Public Information Failure”), and during the period that such Public Information
Failure exists the Purchaser has requested that the Company remove any restrictive legend from the Securities which the Company
is unable to do due to such Public Information Failure, then, in addition to such Purchaser’s other available remedies,
the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay
in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2%) of the aggregate Subscription
Amount of such Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth (30th) day (prorated
for periods totaling less than thirty (30) days) thereafter until the earlier of (a) the date such Public Information Failure
is cured and (b) such time that such public information is no longer required  for the Purchasers to transfer the Underlying
Shares pursuant to Rule 144.  The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred
to herein as “Public Information Failure Payments.”  Public Information Failure Payments shall be
paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred
and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is
cured.  In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information
Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing
herein shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser
shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief. 

 

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

 

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

 

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

 

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

 

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

 

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4.9   Indemnification of Purchasers.   

 

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

 

(b)        The
indemnification required by this Section 4.9 shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or are incurred.

 

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

 

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4.10   Reservation and Listing of Securities.

 

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

 

(b)   If, on any date, the
number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than 200% of the Required Minimum
on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate or
articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least 200% of the Required
Minimum at such time, as soon as possible and in any event not later than the 60th 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.

 

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

 

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

 

4.13 Right of First
Refusal.

 

(a)   From the date hereof
until the Notes are no longer outstanding, upon any issuance by the Company of Common Stock, Common Stock Equivalents or a combination
of units thereof in an underwritten public offering (a “Subsequent Financing”), the Purchasers shall have the
right to participate in an amount of the Subsequent Financing equal to at least $500,000 of the Subsequent Financing, pro rata
to each other in proportion to their Subscription Amounts, on the same terms, conditions and price provided for in the Subsequent
Financing.

 

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(b)  At least four (4) Trading
Days prior to the closing of the Subsequent Financing, the Company shall deliver to the Purchasers a written notice of its intention
to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask the Purchasers if they want to
review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon the request
of a Purchaser, and only upon a request by a Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no
later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The Subsequent Financing
Notice shall describe in reasonable detail the proposed terms of such 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)  If a Purchaser desires
to participate in such Subsequent Financing, such Purchaser must provide written notice to the Company that such Purchaser is
willing to participate in the Subsequent Financing, the amount of the Purchaser’s participation, and representing and warranting
that the 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) are,
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)   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 4.13, 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.

 

(f)   The Company and the Purchasers 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 a 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. 

 

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(g)   Notwithstanding anything
to the contrary in this Section 4.13 and unless otherwise agreed to by the Purchasers, the Company shall either confirm in writing
to the 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 Purchasers will
not be in possession of any material, non-public information, by the tenth (10th) Trading Day following delivery of the Subsequent
Financing Notice. If by such tenth (10th) Trading 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 the Purchaser, such
transaction shall be deemed to have been abandoned and the Purchasers shall not be deemed to be in possession of any material,
non-public information with respect to the Company or any of its Subsidiaries. 

 

(h)   Notwithstanding the
foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance.

 

4.14 Securities Laws Disclosure; Publicity.
The Company shall file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission
within the time required by the Exchange Act. From and after the filing of such Current Report on Form 8-K, the Company represents
to the Purchaser that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers
by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with
the transactions contemplated by the Transaction Documents. The Company and the Purchaser shall consult with each other in issuing
any press releases with respect to the transactions contemplated hereby, and neither the Company nor the Purchaser shall issue
any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to
any press release of the Purchaser, or without the prior consent of the Purchaser, with respect to any press release of the Company,
which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing
party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of the Purchaser, or include the name of the Purchaser in any filing
with the Commission or any regulatory agency or Trading Market, without the prior written consent of the Purchaser, except: (a)
as required by federal securities law in connection with any registration statement contemplated by this Agreement and (b) to
the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchaser
with prior notice of such disclosure permitted under this clause (b).

 

4.15 Form D; Blue Sky Filings.
The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy
thereof, promptly upon request of the Purchaser. The Company shall take such action as the Company shall reasonably determine
is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions
promptly upon request of the Purchaser.

 

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4.16 Transfer Agent Instructions.
The Company shall issue irrevocable instructions to the Transfer Agent in the form previously provided to the Company (the “Irrevocable
Transfer Agent Instructions”) to issue certificates or credit shares to the applicable balance accounts at Depository
Trust Company (“DTC”), as applicable, registered in the name of each Purchaser or its respective nominee(s),
for the Conversion Shares in such amounts as specified from time to time by each Purchaser to the Company upon conversion of any
Note. The Company shall deliver to each Purchaser a copy of the Irrevocable Transfer Agent Instructions with the executed acknowledgement
of the Transfer Agent within thirty (30) calendar days of the date hereof. The Company represents and warrants that no instruction
other than the Irrevocable Transfer Agent Instructions referred to in this Section 4.16 will be given by the Company to the Transfer
Agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books and records
of the Company. If a Purchaser effects a sale, assignment or transfer of Securities, the Company shall permit the transfer and
shall promptly instruct the Transfer Agent to issue one or more certificates or credit shares to the applicable balance accounts
at DTC in such name and in such denominations as specified by such Purchaser to effect such sale, transfer or assignment. The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to each Purchaser. Accordingly,
the Company acknowledges that the remedy at law for a breach of its obligations under this Section 4.16 will be inadequate and
agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 4.16, that each Purchaser
shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.
The Company shall cause the Company Counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions
to the Transfer Agent to the extent required or requested by the Transfer Agent. Any fees (with respect to the Transfer Agent,
counsel to the Company or otherwise) associated with the issuance of such opinion shall be borne by the Company.

 

 

ARTICLE V. 

MISCELLANEOUS 

 

5.1   Termination.  This
Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not
been consummated on or before June 30, 2015; provided, however, that such termination will not affect the right of any party to
sue for any breach by any other party (or parties).

 

5.2   Fees and Expenses. The
Company shall deliver to each Purchaser, prior to the Closing, a completed and executed copy of the Closing Statement. The Company
shall reimburse Greenberg Traurig, LLP (counsel to the lead Purchaser) for all reasonable, documented costs and expenses incurred
by it in connection with review and negotiation of the Transaction Documents, which amounts may be withheld by a Purchaser (at
the request of Greenberg Traurig, LLP) from its Subscription Amount at the Closing or paid by the Company upon termination of
this Agreement on demand by Greenberg Traurig, LLP, provided, however, that the amounts payable by the Company to Greenberg Traurig,
LLP shall not exceed $15,000 in the aggregate unless agreed to in writing by the Company. Except as provided in this Section 5.2
and as otherwise expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees,
stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.

 

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

 

5.4   Notices.  Any
and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 12:00 p.m. (New York City time)
on a Trading Day; (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 12:00
p.m. (New York City time) on any Trading Day; (iii) the second (2nd) Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service; or (iv) upon actual receipt by the party to whom such notice is required to be
given.  The address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

5.5   Amendments; Waivers.  No
provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed by the Company
and the Purchasers.  No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair
the exercise of any such right.

 

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

 

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

 

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5.8   No Third-Party Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for
the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9.

 

5.9   Governing Law.  All
questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.   If either party shall commence an action, suit or proceeding to enforce
any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.9, the prevailing
party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

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

 

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

 

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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, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded
conversion notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such
shares of Common Stock.

 

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

 

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

 

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

 

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

 

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

 

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

 

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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] 

 

 

    	34

    	 

    

 

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.  

 

	 	 	 	Address for Notice: 
	 	xG TECHNOLOGY, Inc.

	 	 
	 	 	 	 
	 	 	 	xG Technology, Inc.

240 S. Pineapple Avenue, Suite 701

Sarasota, FL 34236
	 	 	 	 
	 	By: 	 	 	Fax: (941) 954-8595
	 	 	Name: Roger G. Branton

Title: Chief Financial Officer	 	 

 

 

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

         

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

        875 Third Avenue, 9th Floor

        New York, NY 10022

        Attn: David E. Danovitch

 

 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK 

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

  

    	35

    	 

    

 

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

 

 

 

 

 

Closing Principal Amount: 

   

Closing Subscription Amount: 

 

 

 

EIN Number: _______________________ 

 

 

    	 

    	 

    

 

 

Schedule 3.1(a) – Subsidiaries

 

    	 

    	 

    

 

 

Schedule 3.1(g) – Capitalization

 

 

 

    	 

    	 

    

 

 

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

 

    	 

    	 

    

 

 

Schedule 3.1(j) – Litigation

 

    	 

    	 

    

 

 

Schedule 3.1(r) – Certain Fees

 

    	 

    	 

    

 

 

Schedule 3.1(bb) – Accountants

 

    	 

    	 

    

 

 

Schedule 3.1(kk) – Seniority

 

 

 

    	 

    	 

    

Annex A 

 

 

 

CLOSING STATEMENT

 

 

 

 

    	 

    	 

    

  Exhibit A

 

 

 

 

Form of 8% Original Issue Discount Convertible
Note

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