Document:

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of August 16, 2013, is by and among TranSwitch Corporation,
a Delaware corporation with headquarters located at 3 Enterprise Drive, Shelton, Connecticut
06484 (the “Company”), and the investor listed on the Schedule of Buyers attached hereto (the “Buyer”).

 

RECITALS

 

A.           Each
of the Company and the Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation
D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the 1933 Act.

 

B.           The
Buyer wishes to purchase at the Initial Closing, and the Company wishes to sell, upon the terms and conditions stated in this Agreement,
(i) the aggregate number of shares of common stock, $0.001 par value, of the Company (the “Common Stock”), set
forth opposite the Buyer’s name on the Schedule of Buyers.

 

C.           The
Company has further granted to the Buyer, upon the terms and conditions stated in this Agreement, the right to acquire additional
Common Stock within six months from the date hereof, on the terms and as set forth in Section 1 hereof.

 

D.           At
the Initial Closing (as defined below), the parties hereto shall execute and deliver a Registration Rights Agreement, in the form
attached hereto as Exhibit B (the “Registration Rights Agreement”), pursuant to which the
Company has agreed to provide certain registration rights with respect to the Registrable Securities (as defined in the Registration
Rights Agreement), under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

 

E.           The
Common Stock issued and issuable pursuant hereto are sometimes referred to herein as the “Securities.”

 

AGREEMENT

 

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

 

    	 

    	 

    

  

1.           PURCHASE
AND SALE OF COMMON SHARES AND RIGHT.

 

(a)          Common
Shares and Right; Warrant Exchange. (i) Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6
and 7 below, the Company shall issue and sell to the Buyer, and the Buyer shall purchase from the Company on the Initial Closing
Date (as defined below), the number of shares of Common Stock as is set forth opposite the Buyer’s name on the Schedule
of Buyers (the “Initial Common Shares”) and the right to acquire, on the terms set forth herein, the Additional
Common Shares.

 

(ii)
The Right. At the Initial Closing, the Company shall grant to the Buyer
the irrevocable right (the “Right”) for the period ending on the earlier of (i) 180 days from the date hereof
or (ii) one (1) Business Day prior to the occurrence of a Change in Control Event, to purchase 9,803,921 additional shares of Common
Stock (the “Additional Common Shares”) at a per share price of $0.255 per share, for a maximum aggregate purchase
price of $2,500,000.00. The Right may be exercised by the Buyer in whole but not in part, by delivering to the Company a notice
of exercise (the “Right Exercise Notice”), electing to purchase the Additional Common Shares and containing
the irrevocable obligation to pay the Additional Purchase Price (as defined below) for such Additional Common Shares, in the form
attached hereto as Exhibit A. Upon exercise of the Right, , the Company shall issue and deliver the Additional Common Shares
issuable upon exercise of the Right, and the Buyer shall make payment for the Additional Common Shares in accordance with subsection
(e) of this Section 1 on the third (3rd) Business Day after receipt by the Company of the Right Exercise Notice (the “Additional
Closing Date”). For purposes hereof, a “Change in Control Event” shall mean a merger or consolidation
in which (i) the Company is a constituent party or (ii) a subsidiary of the Company is a constituent party and the Company issues
shares of its capital stock pursuant to such merger or consolidation, except in either of (i) or (ii), above, any such merger or
consolidation involving the Company or a subsidiary in which the shares of capital stock of the Company outstanding immediately
prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that
represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1)
the surviving or resulting corporation; or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another
corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation.

 

(iii) Exchange of
Warrant. At the Initial Closing, the Company shall issue to the Buyer 900,000 Shares of Common Stock (the “Warrant
Exchange Shares”) in exchange for the transfer and surrender to the Company of the Buyer’s outstanding warrant
to purchase Common Stock (the “Warrant”), No. 2013-10, issued April 3, 2013.

 

(b)          Initial
Closing. The closing (the “Initial Closing”) of the purchase of the Initial Common Shares by the
Buyer and the issuance of the Warrant Exchange Shares in exchange for the Warrant shall occur at Pierce Atwood LLP. The date and
time of the Initial Closing (the “Initial Closing Date”) shall be 10:00 a.m., New York time, on the
first (1st) Business Day on which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or
waived (or such later date as is mutually agreed to by the Company and the Buyer). As used herein “Business Day”
means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required
by law to remain closed.

 

(c)          Initial
Purchase Price. The per share purchase price for the Initial Common Shares shall be $0.255. The aggregate purchase price for
the Initial Common Shares to be purchased by the Buyer (the “Initial Purchase Price”) shall be $2,500,000.
The aggregate Purchase Price for the Additional Common Shares to be purchased by the Buyer upon exercise of the Right (the “Additional
Purchase Price”) shall be $2,500,000.

 

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(d)          Form
of Payment. On the Initial Closing Date, (i) the Buyer shall pay the Initial Purchase Price to the Company for the Initial
Common Shares to be issued and sold to the Buyer at the Initial Closing by wire transfer of immediately available funds in accordance
with the Company’s written wire instructions. On the Additional Closing Date, the Buyer shall pay the Additional Purchase
Price for the Additional Common Shares to be issued and sold to the Buyer at the additional closing by wire transfer of immediately
available funds in accordance with the Company’s written wire instructions.

 

2.           BUYER’S
REPRESENTATIONS AND WARRANTIES.

 

The Buyer represents
and warrants to the Company with respect to only itself that, as of the date hereof and as of the Initial Closing Date:

 

(a)          Organization;
Authority; Ownership. The Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
Buyer owns, beneficially and of record, all right, title and interest in the Warrant free and clear of any liens, claims, encumbrances
or security interests. Upon delivery by the Company of the Warrant Exchange Shares at the Initial Closing and the transfer and
surrender of the Warrant by the Buyer, the Company shall acquire good title to, and all rights and interest in, the Warrant, free
and clear of any liens, claims and encumbrances or security interests of any Person.

 

(b)          No
Public Sale or Distribution. The Buyer (i) is acquiring its Initial Common Shares
and (ii) upon exercise of its Right, will acquire the Additional Common Shares issuable upon exercise thereof, in each case,
for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof in violation
of applicable securities laws, except pursuant to sales registered or exempted under the 1933 Act; provided, however, by making
the representations herein, the Buyer does not agree, or make any representation or warranty, to hold any of the Securities for
any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant
to a registration statement or an exemption under the 1933 Act. The Buyer is acquiring the Securities hereunder in the ordinary
course of its business. The Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person
(as defined below) to distribute any of the Securities in violation of applicable securities laws.

 

(c)          Accredited
Investor Status. The Buyer is either (i) an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D or (ii) a “qualified institutional investor” as defined in Rule 144A of the 1933 Act.

 

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

 

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(e)          Information.
The Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer. The Buyer and
its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other
due diligence investigations conducted by the Buyer or its advisors, if any, or its representatives shall modify, amend or affect
the Buyer’s right to rely on the Company’s representations and warranties contained herein or any representations
and warranties contained in any other Transaction Document (as defined below) or any other document or instrument executed and/or
delivered in connection with this Agreement or the consummation of the transaction contemplated hereby. The Buyer understands
that its investment in the Securities involves a high degree of risk. The Buyer has sought such accounting, legal and tax advice
as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities. The
Buyer is not relying, and has not relied, upon any statement, advice (whether accounting, tax, financial, legal or other), representation
or warranty made by the Company or any of its affiliates or representatives except for (A) the SEC Documents (as defined below),
and (B) the representations and warranties made by the Company in this Agreement.

 

(f)          No
Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(g)          Transfer
or Resale. The Buyer understands that except as provided in the Registration Rights Agreement and Section 4(e) hereof: (i)
the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) the Buyer shall have delivered to the
Company (if requested by the Company) an opinion of counsel to the Buyer, in a form reasonably acceptable to the Company, to the
effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption
from such registration, or (C) the Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned
or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule
144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of
Rule 144, and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or
the Person (as defined below) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the
1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated
thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933
Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

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(h)          Validity;
Enforcement. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of the Buyer and constitutes the legal, valid and binding obligations of the Buyer enforceable against the Buyer in
accordance with its respective terms, except as such enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies.

 

(i)          No
Conflicts. The execution, delivery and performance by the Buyer of this Agreement and the Registration Rights Agreement and
the consummation by the Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational
documents of the Buyer, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws) applicable to the Buyer, except in the case of clauses (ii) and (iii)
above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected
to have a material adverse effect on the ability of such Buyer to perform its obligations hereunder.

 

(j)          Residency.
The Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers.

 

(k)          Certain
Trading Activities; Confidentiality. Other than consummating the transactions contemplated hereunder, the Buyer has not directly
or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Buyer, engaged in any transactions
in the securities of the Company (including, without limitation, any Short Sale (as defined below) involving the Company’s
securities) during the period commencing as of the time that the Buyer was first contacted by the Company regarding the specific
investment in the Company contemplated by this Agreement and ending immediately prior to the execution of this Agreement by the
Buyer. The Buyer has maintained the confidentiality of all disclosures made to it in connection with this transaction (including
the existence and terms of this transaction). “Short Sales” means all “short sales” as defined in
Rule 200 promulgated under Regulation SHO under the 1934 Act (as defined below) (but shall not be deemed to include the location
and/or reservation of borrowable shares of Common Stock). The Buyer covenants that neither it nor any Person acting on its behalf
or pursuant to any understanding with it will engage in any transactions in the securities of the Company (including Short Sales)
prior to the time that the transactions contemplated by this Agreement are publicly disclosed. 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.

 

(l)          No
International Sales. The Buyer acknowledges, represents and agrees that no action
has been or will be taken in any jurisdiction outside the United States by the Company that would permit an offering of the Securities,
or possession or distribution of offering materials in connection with the issue of the Securities in any jurisdiction outside
the United States where action for that purpose is required. 

 

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(m)          Experience
of The Buyer. The Buyer, 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. The Buyer 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. The Buyer, in connection with its decision to purchase the Securities, relied only upon any or all of the following:
the Company’s regular reports on Forms 10-K, 10-Q and 8-K as filed by the Company with the SEC, and other information provided
to the Buyer and the representations and warranties of the Company contained herein. 

 

(n)          No
Investment Advice. The Buyer understands that nothing in this Agreement or any other
materials presented to the Buyer in connection with the purchase and sale of the Securities constitutes legal, tax or investment
advice. The Buyer has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Securities.

 

3.           REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

The Company hereby
represents and warrants to the Buyer that:

 

(a)          Organization
and Qualification; Subsidiaries. The Company is duly incorporated and validly existing and in good standing under the laws
of the State of Delaware, and has the requisite power and authorization to own its properties and to carry on its business as
described in the Company’s SEC Documents. The Company is duly qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.
As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business,
properties, assets, liabilities, operations (including results thereof), or condition (financial or otherwise) of the Company,
(ii) the transactions contemplated hereby or in any of the other Transaction Documents or (iii) the authority or ability of the
Company to perform any of its obligations under any of the Transaction Documents; provided, however, that none of the following
shall constitute, or shall be considered in determining whether there has occurred, and no event, circumstance, change or effect
resulting from or arising out of any of the following shall constitute, a Material Adverse Effect: (A) the announcement of the
execution of this Agreement; (B) changes in the national or world economy or financial markets as a whole or changes in general
economic conditions that affect the industries in which the Company conducts its business, so long as such changes or conditions
do not adversely affect the Company in a materially disproportionate manner relative to other similarly situated participants
in the industries or markets in which they operate; (C) any change in applicable law, rule or regulation or GAAP or interpretation
thereof after the date hereof, so long as such changes do not adversely affect the Company, in a materially disproportionate manner
relative to other similarly situated participants in the industries or markets in which they operate; (D) the failure, in and
of itself, of the Company to meet any published or internally prepared estimates of revenues, earnings or other financial projections,
performance measures or operating statistics; provided, however, that the facts and circumstances underlying any such failure
may, except as may be provided in subsections (A), (B), (C), (E), and (F) of this definition, be considered in determining whether
a Material Adverse Effect has occurred; (E) a decline in the price, or a change in the trading volume, of the Company Common Stock
on the Principal Market (as defined below); and (F) compliance with the terms of, and taking any action required by, this Agreement.
The Company has no significant subsidiaries (as such term is defined in Rule 1-02(w) of Regulation S-X promulgated by the Commission).

 

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(b)          Authorization;
Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
The execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Initial Common Shares,
and the reservation for issuance and issuance of the Additional Common Shares issuable upon exercise of the Right) have been duly
authorized by the Company’s board of directors and (other than the filing with the SEC of a Form D with the SEC and any
other filings as may be required by any state securities agencies) no further filing, consent or authorization or action is required
by the Company, its board of directors or its stockholders or other governing body other than Required Approvals (as defined below).
This Agreement has been, and the other Transaction Documents will be prior to the Initial Closing, duly executed and delivered
by the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company
in accordance with its respective terms, except as such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and except as rights to indemnification and to contribution may be limited by federal or state
securities law. “Transaction Documents” means, collectively, this Agreement and the Registration Rights Agreement
and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the
transactions contemplated hereby and thereby, as may be amended from time to time.

 

(c)          Issuance
of Securities. The issuance of the Securities are duly authorized and, upon issuance in accordance with the terms of the Transaction
Documents, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances with respect to the issue thereof. As of the Initial Closing, the Company shall have reserved from
its duly authorized capital stock not less than the maximum number of shares of Common Stock issuable upon exercise of the Right.
The issuance of the Additional Common Shares is duly authorized, and upon exercise in accordance with the Right, the Additional
Common Shares, when issued, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights,
taxes, liens, charges and other encumbrances with respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. Subject to the accuracy of the representations and warranties of the Buyer in this Agreement,
the offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act.

 

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(d)          No
Conflicts. Except as disclosed in the SEC Documents, the execution, delivery and performance of the Transaction Documents
by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Initial Common Shares, and the Additional Common Shares and the reservation for issuance of the Additional
Common Shares) will not (i) result in a violation of the Certificate of Incorporation (as defined below) (including, without limitation,
any certificates of designation contained therein) or other organizational documents of the Company, any capital stock of the
Company, or Bylaws, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any material agreement, indenture or instrument to which the Company is a party, or (iii) subject
to Required Approvals, result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation,
federal and state securities laws and regulations and the rules and regulations of the applicable market on which the Company’s
Common Stock is listed for trading (the “Principal Market”)) applicable to the Company or by which any property
or asset of the Company is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such violations
that could not reasonably be expected to have a Material Adverse Effect.

 

(e)          Consents.
Except as disclosed in the SEC Documents, the Company is not required to obtain any consent from, authorization or order of, or
make any filing or registration with (other than the filing with the SEC of a Form D with the SEC and any other filings as may
be required by any state securities agencies (collectively, the “Required Approvals”)), any court, governmental
agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its
obligations under, or contemplated, by the Transaction Documents, in each case, in accordance with the terms hereof or thereof.
All consents, authorizations, orders, filings and registrations which the Company is required to obtain at or prior to the Initial
Closing have been obtained or effected on or prior to the Initial Closing Date, and the Company is not aware of any facts or circumstances
which might prevent the Company from obtaining or effecting any of the registration, application or filings contemplated by the
Transaction Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge of any
facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.

 

(f)          Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby. The Company further acknowledges that the Buyer is not 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 hereby and thereby, and
any advice given by the Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to the Buyer’s purchase of the Securities. The Company further represents
to the Buyer that the Company’s decision to enter into the Transaction Documents has been based solely on the independent
evaluation by the Company and its representatives.

 

(g)          No
General Solicitation. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged
in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or
sale of the Securities. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory
fees, or brokers’ commissions (other than for Persons engaged by the Buyer or its investment advisor) relating to or arising
out of the transactions contemplated hereby.

 

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(h)          Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate
of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which
is or could become applicable to the Buyer as a result of the transactions contemplated by this Agreement, including, without
limitation, the Company’s issuance of the Securities and the Buyer’s ownership of the Securities. The Company and
its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or
similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the
Company.

 

(i)          SEC
Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements
of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements,
notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC
Documents”). As of their respective dates, the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time they were filed with the SEC, 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. As of their respective dates, except as disclosed in the SEC Documents, the financial
statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Except
as disclosed in the SEC Documents, such financial statements have been prepared in accordance with generally accepted accounting
principles (“GAAP”), consistently applied, during the periods involved (except (i) as may be otherwise indicated
in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may
exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position
of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the
aggregate). No other information provided by or on behalf of the Company to the Buyer which is not included in the SEC Documents
(including, without limitation, information referred to in Section 2(e) of this Agreement) contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the statements therein not misleading, in the light
of the circumstance under which they are or were made.

 

(j)          Absence
of Certain Changes. Except as disclosed in the SEC Documents, since the date of the Company’s most recent audited financial
statements contained in a Form 10-K, the Company has not (i) declared or paid any dividends, (ii) sold any assets, individually
or in the aggregate, outside of the ordinary course of business or (iii) made any material capital expenditures, individually
or in the aggregate. Except as disclosed in the SEC Documents, the Company has not taken any steps to seek protection pursuant
to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up.

 

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(k)          Conduct
of Business; Regulatory Permits. The Company is not in violation of any term of or in default under its Certificate of Incorporation,
any certificate of designation, preferences or rights of any other outstanding series of preferred stock of the Company or Bylaws.
Except as disclosed in the SEC Documents, the Company is not in violation of any judgment, decree or order or any statute, ordinance,
rule or regulation applicable to the Company, and the Company will not conduct its business in violation of any of the foregoing,
except in all cases for possible violations which could not, individually or in the aggregate, have a Material Adverse Effect.
The Company possesses all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary
to conduct its business, except where the failure to possess such certificates, authorizations or permits would not have, individually
or in the aggregate, a Material Adverse Effect, and the Company has not received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit.

 

(l)          Foreign
Corrupt Practices. Neither the Company nor, to the knowledge of the Company, any director, officer, any agent, employee or
other Person acting on behalf of the Company has, in the course of its actions for, or on behalf of, the Company (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government
official or employee.

 

(m)          Sarbanes-Oxley
Act. Except as disclosed in the SEC Documents, the Company is in material compliance with all applicable requirements of the
Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and all applicable rules and regulations promulgated by the
SEC thereunder that are effective as of the date hereof.

 

(n)          Transactions
With Affiliates. Except as disclosed in the SEC Documents, none of the officers, directors or to the knowledge of the Company,
employees of the Company is presently a party to any transaction with the Company (other than for ordinary course services as
employees, officers or 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, or otherwise requiring payments to or from any such officer,
director or employee or, to the knowledge of the Company, any corporation, partnership, trust or other Person in which any such
officer, director, or employee has a substantial interest or is an employee, officer, director, trustee or partner.

 

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(o)          Capitalization.
Except as disclosed in the SEC Documents, the Company has not issued any capital stock since its most
recently filed periodic report under the 1934 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 1934 Act. Except as disclosed in the SEC Documents or as a result of the terms
hereof relating to the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock or Common
Stock Equivalents. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any
stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders
agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company
is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. “Common Stock
Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock, rights, options, warrants 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.

 

(p)          Indebtedness
and Other Contracts. Except as disclosed in the SEC Documents, the Company (i) has no outstanding Indebtedness (as defined
below), (ii) is not a party to any contract, agreement or instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (iii)
is not in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness, except
where such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (iv) is
not a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of
the Company’s officers, has or is expected to have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance
with generally accepted accounting principles) (other than trade payables entered into in the ordinary course of business), (C)
all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all
obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or
other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event
of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement
which, in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified
as a capital lease, and (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person,
even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness,
and (y) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

 

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(q)          Absence
of Litigation. Except as disclosed in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company,
threatened against or affecting the Company, the Common Stock or any of the Company’s officers or directors which is outside
of the ordinary course of business or individually or in the aggregate would have or reasonably expect to result in a Material
Adverse Effect. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation
by the SEC involving the Company or any current director or officer of the Company. The SEC has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the Company under the 1933 Act or the 1934 Act.

 

(r)          Insurance.
The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the businesses in which the Company is engaged. The Company
has not been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it will be unable
to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

(s)          Employee
Relations. The Company is not a party to any collective bargaining agreement or employs any member of a union. The Company
believes that its relations with its employees are good. No executive officer or other key employee of the Company is, or is now
expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information
agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment
of each such executive officer or other key employee (as the case may be) does not subject the Company to any liability with respect
to any of the foregoing matters. The Company is in compliance with all federal, state and local laws and regulations respecting
labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where
failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

 

(t)          Title.
Except as disclosed in the SEC Documents, the Company has good and marketable title in fee simple to all real property, and has
good and marketable title to all personal property, owned by it which is material to the business of the Company free and clear
of all liens, charges, security interests, encumbrances, rights of first refusal, preemptive rights or other restrictions (“Liens”),
encumbrances and defects except such as do not materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company. Any real property and facilities held under lease by the Company
are held by it under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such property and buildings by the Company.

 

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(u)          Intellectual
Property Rights. The Company has or has adequate rights or licenses to use all trademarks, trade names, service marks, service
mark registrations, service names, patents, patent rights, copyrights, original works, inventions, licenses, approvals, governmental
authorizations, trade secrets and other intellectual property rights and all applications and registrations therefor (“Intellectual
Property Rights”) necessary to conduct its business as described in the SEC Documents. None of the Company’s Intellectual
Property Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned, within three
years from the date of this Agreement, except as set forth in the SEC Documents or except where such expiration, termination or
abandonment would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
The Company has 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.

 

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

 

(w)          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 has filed all necessary federal, state and foreign income and franchise tax returns and has
paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted or
threatened against the Company. The Company is not operated in such a manner as to qualify as a passive foreign investment company,
as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.

 

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(x)          Internal
Accounting and Disclosure Controls. Except as disclosed in the SEC Documents, the Company maintains internal control over
financial reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with GAAP. Except as disclosed in the SEC Documents, the Company maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring that information required to be disclosed by the
Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure
that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated
and communicated to the Company’s management, including its principal executive officer or officers and its principal financial
officer or officers, as appropriate, to allow timely decisions regarding required disclosure.

 

(y)          Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company and an unconsolidated
or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is not so disclosed
or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

(z)          Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” as such term is defined in the Investment Company Act of 1940, as amended.

 

(aa)         U.S.
Real Property Holding Corporation. The Company is not nor has ever 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 any Buyer’s
request.

 

(bb)         Transfer
Taxes. On the Initial Closing Date or the Additional Closing Date, all stock transfer or other taxes (other than income or
similar taxes) which are required to be paid in connection with the issuance, sale and transfer of the Securities to be sold to
the Buyer hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will
be or will have been complied with.

 

(cc)         Bank
Holding Company Act. The Company is not subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”)
or to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the
Company nor any of its 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 equity that is subject
to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its 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.

 

(dd)         Shell
Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).

 

(ee)         Public
Utility Holding Act. The Company is not a “holding company,” or an “affiliate” of a “holding
company,” as such terms are defined in the Public Utility Holding Act of 2005.

 

(ff)         Federal
Power Act. The Company is not subject to regulation as a “public utility” under the Federal Power Act, as amended.

 

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(gg)         Money
Laundering. The Company is in compliance with, and has not previously violated, the
USA Patriot Act of 2001 and any other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not
limited to, the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets
Control, including, but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, "Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism" (66 Fed. Reg. 49079 (2001)); and (ii) any
regulations contained in 31 CFR, Subtitle B, Chapter V.

 

4.           COVENANTS.

 

(a)          Best
Efforts. The Buyer shall use its reasonable best efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Section 6 of this Agreement. The Company shall use its reasonable best efforts to timely satisfy each of the conditions
to be satisfied by it as provided in Section 7 of this Agreement.

 

(b)          Form
D and Blue Sky. The Company shall file a Form D with respect to the Securities as required under Regulation D. The Company
shall, on or before the Initial Closing Date, 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 Buyers at the Initial Closing pursuant to this Agreement
under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from
such qualification) if so required by such applicable state laws. Without limiting any other obligation of the Company under this
Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Securities required under
all applicable securities laws (including, without limitation, all applicable federal securities laws and all applicable “Blue
Sky” laws), and the Company shall comply with all applicable federal, state and local laws, statutes, rules, regulations
and the like relating to the offering and sale of the Securities to the Buyers.

 

(c)          Reporting
Status. Until the date on which the Buyers shall have sold all of the Registrable Securities (the “Reporting Period”),
the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not
terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would no longer require or otherwise permit such termination.

 

(d)          Financial
Information. The Company agrees to send the following to each Investor (as defined in the Registration Rights Agreement) during
the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the
EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K and (ii) copies of any notices and other information made
available or given to the stockholders of the Company generally, contemporaneously with the making available or giving thereof
to the stockholders. Notwithstanding the foregoing, nothing in this Section 4(d) shall require the Company to disclose to any
Investor any redacted part of any filing in which the Company has requested confidential treatment by the SEC.

 

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(e)          Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that
the Securities may be pledged by the Buyer in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees to execute
and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities
to such pledgee by the Buyer.

 

(f)          Disclosure
of Transactions and Other Material Information. The Company shall, on or before 9:30 a.m.,
New York time, within two Business Days of the date of this Agreement, issue a press release (the “Press
Release”) reasonably acceptable to the Buyer disclosing all the material terms of the transactions contemplated by the
Transaction Documents. On or before 9:30 a.m., New York time, on the date within two Business Days of the date of this
Agreement, the Company shall file a Current Report on Form 8-K describing all the material terms of the transactions contemplated
by the Transaction Documents in the form required by the 1934 Act and attaching all the material Transaction Documents (including,
without limitation, this Agreement and the Registration Rights Agreement) (including all attachments, the “8-K Filing”).

 

(g)          Reservation
of Shares. So long as the Right remains outstanding, the Company shall take all action necessary to at all times have authorized,
and reserved for the purpose of issuance, no less than the maximum number of shares of Common Stock issuable upon exercise of
the Right.

 

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

 

(i)          Passive
Foreign Investment Company. The Company shall conduct its business in such a manner as will ensure that the Company will not
be deemed to constitute a passive foreign investment company within the meaning of Section 1297 of the U.S. Internal Revenue Code
of 1986, as amended.

 

(j)          Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent
of the Company, any other Person, that the Buyer 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 the Buyer could be deemed to trigger the provisions of any such plan or arrangement,
by virtue of receiving Securities under the Transaction Documents.

 

5.           TRANSFER
AGENT INSTRUCTIONS; LEGEND.

 

(a)          Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer agent
in a form acceptable to each of the Buyers (the “Irrevocable Transfer Agent Instructions”) to issue certificates
or credit shares to the applicable balance accounts at The Depository Trust Company (“DTC”), registered in
the name of the Buyer or its respective nominee(s), for the Securities in such amounts as specified from time to time by the Buyer
to the Company upon delivery of the Securities.

 

    	16

    	 

    

  

(b)          Legends.
The Buyer understands that the Securities have been issued (or will be issued in the case of the Additional Common Shares) pursuant
to an exemption from registration or qualification under the 1933 Act and applicable state securities laws, and except as set forth
below, the Securities shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend
in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

 

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

 

(c)          Removal
of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 50 above or
any other legend (i) while a registration statement covering the resale of such Securities is effective under the 1933 Act, (ii)
following any sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii)
if such Securities are eligible to be sold, assigned or transferred under Rule 144 (provided that the Buyer provides the Company
with reasonable assurances that such Securities are eligible for sale, assignment or transfer under Rule 144 which shall not include
an opinion of counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144), provided that
the Buyer provides the Company with an opinion of counsel to the Buyer, in a generally acceptable form, to the effect that such
sale, assignment or transfer of the Securities may be made without registration under the applicable requirements of the 1933
Act or (v) if such legend is not required under applicable requirements of the 1933 Act (including, without limitation, controlling
judicial interpretations and pronouncements issued by the SEC).

 

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

 

(a)          The
obligation of the Company hereunder to issue and sell the Initial Common Shares and the related Right to the Buyer at the
Initial Closing is subject to the satisfaction, at or before the Initial Closing Date, of each of the following conditions, provided
that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion
by providing the Buyer with prior written notice thereof:

 

    	17

    	 

    

 

(i)          The
Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.

 

(ii)         The
Buyer shall have delivered to the Company the Purchase Price for the Initial Common Shares being purchased by the Buyer at the
Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.

 

(iii)        The
representations and warranties of the Buyer shall be true and correct in all material respects (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as
of the date when made and as of the Initial Closing Date as though originally made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct as of such date), and the Buyer shall have performed,
satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Buyer at or prior to the Initial Closing Date.

 

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

 

(a)          The
obligation of the Buyer hereunder to purchase the Initial Common Shares and the related Right at the Initial Closing is
subject to the satisfaction, at or before the Initial Closing Date, of each of the following conditions, provided that these conditions
are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion by providing the Company
with prior written notice thereof:

 

(i)          The
Company shall have duly executed and delivered to the Buyer (A) each of the other Transaction Documents and (B) a copy of
the irrevocable instructions to the Company’s transfer agent instructing the transfer agent to deliver the Initial Common
Shares (in the number as is set forth across from such Buyer’s name in the Schedule of Buyers) being purchased by
the Buyer at the Initial Closing pursuant to this Agreement.

 

(ii)         Each
representation and warranty of the Company shall be true and correct in all material respects (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as
of the date when made and as of the Initial Closing Date as though originally made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to
the Initial Closing Date.

 

(iii)        The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities.

 

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(iv)        No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.

 

(v)         The
Company shall have delivered to the Buyer such other documents, instruments or certificates relating to the transactions contemplated
by this Agreement as the Buyer or its counsel may reasonably request.

 

8.           TERMINATION.

 

In the event that the
Closing shall not have occurred with respect to the Buyer within fifteen (15) Business Days of the date hereof, then the Buyer
shall have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close
of business on such date without liability of the Buyer to any other party; provided, however, the right to terminate this Agreement
under this Section 8 shall not be available to the Buyer if the failure of the transactions contemplated by this Agreement to have
been consummated by such date is the result of the Buyer’s breach of this Agreement. Nothing contained in this Section 8
shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement
or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents.

 

9.           MISCELLANEOUS.

 

(a)          Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State 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, 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 brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. 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 to such party at the address for such 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 manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

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(b)          Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that
any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of
an executed signature page, such signature page 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 signature page were an original thereof.

 

(c)          Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.

 

(d)          Severability.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

(e)          Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyer,
the Company, their affiliates and Persons acting on their behalf solely with respect to the matters contained herein and therein,
and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein
and therein; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed
to) (i) have any effect on any agreements the Buyer has entered into with the Company prior to the date hereof with respect to
any prior investment made by the Buyer in the Company or (ii) waive, alter, modify or amend in any respect any obligations of
the Company, or any rights of or benefits to the Buyer or any other Person, in any agreement entered into prior to the date hereof
between or among the Company and the Buyer and all such agreements shall continue in full force and effect. Except as specifically
set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may
be amended or waived other than by an instrument in writing signed by the Company and the Buyer.

 

    	20

    	 

    

  

(f)          Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile or electronic mail (provided confirmation of transmission is mechanically or electronically generated and kept
on file by the sending party); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery
specified, in each case, properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications
shall be:

 

If to the Company:

 

TranSwitch Corporation

3 Enterprise Drive

Shelton, Connecticut 06484

Telephone: (203) 929-8810

Facsimile: (203) 926-9453

Attention: President

Email: ali.khatibzadeh@transwitch.com

 

With a copy (for informational
purposes only) to:

 

Pierce Atwood LLP

100 Summer Street

Suite 2250

Boston, Massachusetts 02110

Telephone: (617) 488-8140

Facsimile: (617) 824-2020

Attention: Timothy C. Maguire, Esq.

Email: tmaguire@pierceatwood.com

 

If to the Buyer, to its address and facsimile
number set forth on the Schedule of Buyer, or to such other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness
of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i),
(ii) or (iii) above, respectively.

 

    	21

    	 

    

 

(g)          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including, as contemplated below, any assignee of any of the Securities. Neither the Company nor the Buyer shall
assign this Agreement or any rights or obligations hereunder without the prior written consent of the other.

 

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

 

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

 

[signature
pages follow] 

 

    	22

    	 

    

 

IN WITNESS WHEREOF,
the Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.

 

	 	COMPANY:	 
	 	 	 
	 	TRANSWITCH CORPORATION	 
	 	 	 	 
	 	By:	/s/ Robert Bosi	 
	 	 	Name: Robert Bosi	 
	 	 	Title: Chief Financial Officer	 

  

    	 

    	 

    

 

IN WITNESS WHEREOF,
the Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.

 

	 	BUYER:	 
	 	 	 
	 	ILEX PARTNERS, LLC	 
	 	 	 
	 	By:	/s/ Michael Steinhardt	 
	 	 	Name: Michael Steinhardt	 
	 	 	Title: Managing Member	 

 

    	 

    	 

    

 

SCHEDULE OF BUYERS

 

	(1)	 	(2)	 	(3)	 	 	(4)
    	 	 	(5)
    	 
	

    Buyer	 	

    Address and Facsimile Number	 	Number of

    Initial
 Common
 Shares	 	 	

    Initial Common

    Share Purchase
 Price	 	 	

    Aggregate Initial
 Purchase Price	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Ilex
    Partners, LLC	 	c/o
                                                                  Michael L. Scoli
 Steinhardt
                                                                                              Management Co., Inc.
 712
                                                                                                                              Fifth
                                                                                                                              Avenue,
                                                                                                                              34th
                                                                                                                              Floor
 New
                                                                                                                                                     York,
                                                                                                                                                     NY
                                                                                                                                                     10019-4108 
	 	 	9,803,921	 	 	$	0.255	 	 	$	2,500,000	 

 

    	 

    	 

    

 

Exhibit A

 

EXERCISE NOTICE FOR EXERCISE OF RIGHT

 

See Attached

 

    	 

    	 

    

 

Exhibit B

 

REGISTRATION RIGHTS AGREEMENT

 

See AttachedMASTER TOLL SERVICES AGREEMENT

 

This Master Toll Services
Agreement (“Agreement”)
is made as of April 3, 2013 (“Effective Date”), by and among IDK PETROL ALBANIA SH.A, an Albanian
corporation (“IDK”) on the one hand, and PETROSONIC ENERGY, INC., a Nevada corporation (“Parent”)
and its wholly-owned subsidiary PETROSONIC ALBANIA SH.A, an Albanian corporation (“Petrosonic”) on the
other hand.

 

RECITALS

 

WHEREAS, Petrosonic is a processor
and producer of heavy hydrocarbon emulsion fuel oil and emulsified bitumen (referred to as “SFOTM”), and
owns proprietary Technology (defined below) relating to the same;

 

WHEREAS, IDK is an energy company
registered in Albania, which is interested in pursuing projects in Albania;

 

WHEREAS, the parties wish to
enter into this Agreement under which IDK may request Petrosonic’s services in the manufacture of SFOTM for a fee; and

 

WHEREAS, Petrosonic is willing
to perform and provide such services, subject to and in accordance with the terms and conditions of this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the mutual promises and covenants set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Petrosonic and IDK agree as follows:

 

1.      Definitions.

 

The defined terms in this Agreement shall
have the meaning set forth immediately below or set forth elsewhere herein.

 

1.1         “Deliverables”
means SFOTM or other output mutually agreed upon, under any Purchase Order.

 

1.2         “Delivery
Dates” means the dates on which the Deliverables are due to be delivered to
SSB under this Agreement and each Purchase Order.

 

1.3         “Feedstock”
means the hydrocarbon materials delivered by IDK on site for processing by Petrosonic. 

 

1.4         “Technology”
of Petrosonic means any and all Intellectual Property Rights and proprietary knowledge and methodology owned, developed or previously
developed by Petrosonic, including all improvements, and Intellectual Property Rights licensed by Petrosonic from third parties,
relating to the production of SFOTM under this Agreement. 

 

 

    	1

    	 

    

 

1.5         “Intellectual
Property Rights” means, on a world-wide basis, any and all now-known or hereafter-known tangible and intangible (a) rights
associated with works of authorship including, without limitation, copyrights, copyright rights, and moral rights, (b) trademark
and trade name rights and similar rights, (c) trade secret rights, (d) patents and other patent rights, (e) other
rights with respect to inventions, discoveries, improvements, know-how, formulas, algorithms, processes, technical information
and other technology, (f) all other intellectual and industrial property rights of every kind or nature and however designated,
whether arising by operation of law, contract, license or otherwise, and (g) all registrations, initial applications, renewals,
extensions, continuations, divisions or reissues thereof, now or hereafter existing, made or in force (including any rights in
any of the foregoing).

 

1.6         “Initial
Term” means the initial term of this Agreement, which shall begin on the Effective
Date and continue for a period of twelve (12) months thereafter, unless earlier terminated as provided in Section 6.

 

1.7         “Material
Change” shall have the meaning set forth in Section 2.4(c).

 

1.8         “Services”
means the hydrocarbon processing services provided by Petrosonic to IDK under this Agreement and any Purchase Order.

 

1.9         “SFOTM”
means synthetic heavy hydrocarbon emulsion fuel oil and emulsified bitumen. 

 

1.10       “Specifications”
means the specifications for a certain chemical composition or other physical properties of the Deliverables, as agreed by the
parties under any Purchase Order.

 

1.11       “Term”
means the Initial Term, as extended in accordance with Section 6.1. 

 

1.12       “SMU”
means a synthetic bitumen and fuel manufacturing unit.

 

1.13       “Purchase
Order” means the written description of the Deliverables to be provided by Petrosonic to IDK, including related Specifications,
quantity or volume, and other terms mutually agreed. 

 

2.      Services.

 

2.1         Purchase
Orders. Any and all Services to be performed hereunder shall be authorized through the
execution of mutually agreed and accepted Purchase Orders in a form substantially similar to the form attached hereto as Exhibit B.
Unless otherwise agreed by the parties in writing, each Purchase Order shall include the following information: (a) a description
and quantity of the Feedstock to be produced by Petrosonic; (b) any additional obligations of IDK in connection with such
Services; (c) the Deliverables to be provided by Petrosonic and their corresponding Specifications and schedule delivery dates;
(d) any additional information, terms or conditions specific to such Purchase Order. Each Purchase Order shall be effective only
upon execution by both parties and shall be deemed, upon its execution, to be incorporated into this Agreement. 

 

2.2         Services;
Personnel. Subject to and in accordance with the terms and conditions of this Agreement,
Petrosonic shall perform the Services set forth in any Purchase Order and deliver to IDK the Deliverables according to the Specifications,
and in accordance with this Agreement and the terms of each Purchase Order. The personnel that Petrosonic assigns to perform the
Services shall be properly trained and qualified for the Services such personnel are to perform hereunder, and shall perform such
Services in a workmanlike manner in accordance with industry standards. 

 

2.3         Feedstock.
The Feedstock furnished by IDK for processing by Petrosonic shall be owned by IDK at all times, except as provided in this Agreement.
Feedstock supplied by IDK shall be within the composition and capacity of the SMU operated by Petrosonic, as determined by Petrosonic’s
engineers and technicians from time to time. 

 

    	2

    	 

    

 

2.4         Units
of Measurement. The unit of measurement of materials for purposes of this Agreement shall
be barrels. Inputs into the SMU shall be measured in barrels of hydrocarbon Feedstock. 

 

2.5         Agreement
to Supply. Subject to the terms contained herein, Petrosonic agrees to manufacture sufficient
quantities of, within the capacity of Petrosonic’s installed equipment, as established and approved by the parties from time
to time. 

 

2.6         Control
of Process. The process and operation of the SMU and production of SFOTM shall be
under the control of Petrosonic and its employees and contractors at all times. 

 

2.7         Availability,
Operation and Maintenance. Petrosoinc shall, on or before March 31, 2013, deliver to the
Albanian Project site, an SFOTM manufacturing SMU capable of processing at least 120 barrels of per hour. Petrosonic shall
retain ownership of the SMU and shall be responsible for its operation and maintenance. Petrosonic shall have sole discretion with
respect to operation and maintenance of the SMU.

 

2.8         IDK
Delays. Any failure or delay by Petrosonic in meeting the applicable scheduled delivery
date for any Deliverable due to events or conditions beyond Petrosonic’s reasonable control or caused, in whole or in part,
by IDK’s failure or delay in performing any of its obligations under this Agreement and/or such Purchase Order (a “Delay”),
shall result in an automatic extension of such delivery date by the period of such Delay. 

 

3.      IDK
Obligations.

 

3.1         Cooperation.
In addition to any payment or other obligations imposed on IDK under this Agreement and/or any Purchase Order, IDK shall use its
best efforts to: (a) supply Feedstock that meets the minimum criteria (to be specified in writing by Petrosonic to IDK, which
criteria may be updated by Petrosonic from time to time with or without advance notice); (b) provide all information necessary
for Petrosonic to perform its obligations hereunder; and (c) cooperate with any other reasonable Petrosonic request to enable
Petrosonic to perform its duties hereunder. 

 

3.2         Non-Use
and Non-Analysis. IDK understands the proprietary and confidential nature of the chemical
mixtures used as part of the emulsification process and accordingly, IDK agrees that it shall not conduct any analysis of the chemicals
used by Petrosonic under this Agreement. Further, IDK agrees that it will not reverse engineer or otherwise attempt to discover
the confidential and proprietary aspects of SFOTM.

 

4.      Acceptance.
IDK shall have no less than five (5) business days from acceptance of Deliverables by Petrosonic,
or such other acceptance period as may be otherwise specified in the applicable Purchase Order (the “Acceptance Period”),
to examine each Deliverable and determine, in good faith, whether such Deliverable substantially conforms to the Specifications
therefor. IDK shall, within the applicable Acceptance Period: (a) provide Petrosonic with written notice (which may be in
electronic form) of its acceptance of such Deliverable; or (b) provide Petrosonic with (i) written notice of its rejection
of such Deliverable, in good faith, for the failure of such Deliverable to conform substantially to the Specifications therefor
and/or in the SSB’s judgment, the Deliverable’s failure to satisfy its intended purpose, and (ii) all information
and assistance reasonably necessary for Petrosonic to correct such non-conformity. IDK’s failure to provide a written rejection
notice to Petrosonic within the applicable Acceptance Period shall be deemed acceptance of such Deliverable. Petrosonic shall
as promptly as practicable following receipt of IDK’s written notice rejecting any Deliverable to correct the conditions
that caused the rejection and resubmit such Deliverable to IDK, in which case the acceptance procedure set forth in this Section 4
shall be repeated until such Deliverable is accepted. 

 

    	3

    	 

    

 

5.      Payments.

 

5.1         Fees.
The fees for each Deliverable shall be set forth in each related Purchase Order. SFOTM manufacturing fee charged by
Petrosonic shall be based on monthly output barrels of manufactured into SFOTM. The actual fee per barrel of SFOTM
shall be dependent on the type of feed stock, chemicals and water used which impacts the chemical concentration. If IDK uses a
vacuum residue or asphaltenes feedstock, the charges will increase, due to a different chemical type and higher chemical concentrations
required. The volumes throughput will have an effect on the cost per barrel of SFOTM because the fixed cost component.
As the volume of the throughput increases above 1,000 barrels per day, the portion of the fixed costs will decrease. The payment
for the toll fee will be prepaid in Petrosonic’s account prior to IDK retrieving the final product. 

 

5.2         Expenses.
Each respective party shall bear its own expenses in the performance of this Agreement. 

 

5.3         Invoices.
Petrosonic shall submit invoices to IDK for all Services and other payments due (as applicable) under this Agreement and any Purchase
Order and, unless otherwise specified in the applicable Purchase Order, IDK shall pre-pay such invoiced amounts before the receipt
by IDK of the delivery.

 

5.4         Taxes.
IDK shall pay all sales, use, excise and other taxes which may be levied upon IDK in connection with this Agreement and any Purchase
Order, except for taxes based on Petrosonic’s net income. 

 

5.5         Late
Payment. IDK agrees to pay interest at the rate of one and one-half percent (1.5%) per
month (or the maximum rate permitted by applicable law, whichever is less) for all amounts not paid from receipt by IDK of the
invoice therefor as per clause 5.3 above.

 

5.6         Security
Interest in Feedstock and Deliverables. As security for the performance of IDK’s
payment obligations under this Agreement and each Purchase Order, IDK hereby grants and does grant without any further required
action or consent, in connection with each subsequent Purchase Order, a security interest in the Feedstock provided to Petrosonic,
and in the resulting Deliverables (“Collateral”). In the event of a default in the performance of IDK’s
payment obligations hereunder for a period of more than 30 days after the due date of such payment, upon such date Petrosonic shall
have the right to take possession of, sell, transfer, use, remove, transport, store, dispose of, collect the proceeds from, and/or
take any other legally permissible action with respect to, the Collateral, in order to discharge and fully satisfy IDK’s
payment obligations under this Agreement. 

 

5.7         Currency.
All monetary references in this Agreement and Purchase Order shall be in United States Dollars, unless otherwise specifically stated.

 

6.      Term;
Termination.

 

6.1         Term.
The “Initial Term” of this Agreement is set forth in Section 1.6 of this Agreement. After the Initial Term, this Agreement
shall automatically renew for successive twelve (12) month periods unless either party shall provide written notice of its desire
not to renew the Agreement at least ninety (90) days prior to the end of the Initial Term or any renewal period. 

 

    	4

    	 

    

 

6.2         Termination
for Convenience. Either party may terminate this Agreement for convenience upon sixty
(60) days prior written notice, provided that any Purchase Orders then in effect shall either be terminated, or the parties shall
mutually agree that specific pending Purchase Orders shall be completed and paid for by IDK. 

 

6.3         Termination
for Cause. Either party may terminate this Agreement and/or any Purchase Order at any
time, in whole or in part, if the other party materially breaches any term or condition of this Agreement and/or any Purchase Order
and fails to cure such breach within ten (10) days after receipt of written notice (specifying in reasonable detail the nature
of the material breach) by the notifying party. During this notice period, the non-breaching party shall have the right to suspend
its performance under this Agreement.

 

6.4         Termination
for Insolvency. Petrosonic or IDK may terminate this Agreement and/or any Purchase Order
at any time, in whole or in part, if Petrosonic or IDK, as the case may be, ceases to conduct business in its normal course, makes
an assignment for the benefit of creditors, is liquidated or otherwise dissolved, becomes insolvent, is adjudicated bankrupt or
a receiver, trustee or custodian is appointed for it. 

 

6.5         Consequences
of Termination. 

 

(a)          Promptly
upon termination of this Agreement and/or any Purchase Order for any reason, IDK shall pay to Petrosonic any and all unpaid amounts
then due and outstanding in connection with any Services and Deliverables provided hereunder, subject to mutual agreement (if any)
regarding disposition of any uncompleted work or incomplete/undelivered Deliverables, through the effective date of termination.

 

(b)          In
the event that any Purchase Order(s) remain in effect after the termination of this Agreement for any reason, the terms of this
Agreement shall continue to apply with full force and effect with respect to such Purchase Order(s), until the termination or expiration
thereof.  

 

(c)          Sections 1,
3.2, 5, 6.5, 8, 9, 10 and 11 shall survive the termination of this Agreement and/or any Purchase Order for any reason.

 

7.      Petrosonic
Intellectual Property Rights. IDK
hereby acknowledges that Petrosonic and/or its licensors own any and all Intellectual Property Rights in the Petrosonic Technology,
and nothing in this Agreement shall be deemed to grant to IDK, directly or by implication, estoppel or otherwise, any right or
license with respect thereto. 

 

8.      Representations,
Warranties and Covenants.

 

8.1         Petrosonic
Representations, Warranties and Covenants. 

 

(a)          Petrosonic
represents, warrants and covenants to SSB that: (i) it has the right and authority to enter into and perform its obligations
under this Agreement; and (ii) the Deliverables as of the date of delivery and acceptance by the IDK, will conform in all
material aspects to the Specifications agreed upon by Petrosonic and IDK.

 

(b)          Notwithstanding
anything in this Agreement to the contrary, the warranty in Section 8.1(a) above shall exclude any failure, impairment, interruption
or non-conformity (i) that is not caused by Petrosonic, (ii) that is caused by or related to changes
to the Deliverables that are not performed by the Petrosonic, (iii) that is caused by non-conformity of the Feedstock to Petrosonic’s
requirements as provided herein; or (iv) that is caused by IDK’s breach of any provision of this Agreement.  

 

    	5

    	 

    

 

(c)          Except
as otherwise expressly provided in this Agreement, Petrosonic’s sole and exclusive obligation and IDK’s sole and exclusive
remedy under the warranty set forth in Section 8.1(a), above, is for Petrosonic to use commercially reasonable efforts to
correct any such non-conformity. 

 

8.2         IDK
Representations, Warranties and Covenants. IDK represents, warrants and covenants to Petrosonic
that: (a) it has the right and authority to enter into and perform its obligations under this Agreement; (b) IDK shall comply at
all times with all applicable environmental, transportation, commercial and other applicable national, state and local laws; (c)
IDK’s conduct shall not violate any third party’s contractual or other rights. 

 

8.3         Disclaimer.
THE PARTIES AGREE THAT ALL WARRANTIES IN CONNECTION WITH THE DEVELOPER’S SERVICES ARE SET FORTH IN THIS SECTION 8.
 EXCEPT AS SET FORTH IN THIS SECTION 8, EACH PARTY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY
OR OTHERWISE, ARISING IN CONNECTION WITH THIS AGREEMENT AND THE PERFORMANCE HEREOF, WITHOUT LIMITATION, ANY WARRANTIES OF TITLE,
NONINFRINGEMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ARISING OUT OF A COURSE OF PERFORMANCE, DEALING OR TRADE
USAGE.   

 

9.      Indemnity.

 

Each party (the “Indemnitor”)
shall defend the other party, its affiliates, and its and their directors, officers, employees, agents and other representatives
(collectively, “Indemnitees”) against any and all third party claims, actions, suits and proceedings or threat
thereof arising out of or in connection with any breach or alleged breach by Indemnitor, its affiliates or any of its or
their directors, officers, employees, agents or other representatives, of any representation, warranty or covenant set forth in
Section 8, and Indemnitor shall indemnify and hold the Indemnitee(s) harmless against any and all liabilities, damages, judgments,
awards, settlements and expenses (including, without limitation, reasonable attorneys’ fees and costs) incurred by same in
connection therewith (collectively, the “Claims”); provided, however, the Indemnitee(s) promptly notifies the
Indemnitor in writing of any such Claim and promptly tenders to the Indemnitor control of the defense and any settlement of such
Claim. Subject to the foregoing, the Indemnitee(s) may join in the defense or settlement of any such Claim with counsel of its
choice, at its own expense.

 

10.   Confidentiality.

 

10.1       Confidential
Information. By virtue of this Agreement, one party (the “Disclosing Party”)
may provide access to its confidential information to the other party (the “Receiving Party”) to this Agreement
as described in this Section 10.1 (“Confidential Information”). For purposes of this Agreement, “Confidential
Information” of a party means information, ideas, materials or other subject matter of such party, whether disclosed orally,
in writing or otherwise, that is provided under circumstances reasonably indicating that it is confidential or proprietary. “Confidential
Information” of a party shall include, without limitation, any and all trade secrets, processes, techniques, drawings, models,
customer-related information and data, computer programs, databases, business plans, technical data, product ideas, marketing data
and plans, contracts and financial information disclosed or otherwise provided by the Disclosing Party to the Receiving Party.
Confidential Information shall not include any information or material that the Receiving Party can document: (a) is or becomes
part of public knowledge other than as a result of any action or inaction of the Receiving Party; (b) was rightfully in the
Receiving Party’s possession prior to disclosure by the Disclosing Party; (c) is disclosed to the Receiving Party without
confidential or proprietary restriction by a third party who rightfully possesses the information (without confidential or proprietary
restriction); or (d) is independently developed by the Receiving Party. 

 

    	6

    	 

    

 

10.2       Restrictions
on Use. Confidential Information of the Disclosing Party shall be received and maintained
by the Receiving Party in strict confidence, shall not be used for any purpose other than as expressly permitted under this Agreement,
and shall not be disclosed to any third party without the prior written consent of the Disclosing Party. Each party agrees to limit
access to the other party’s Confidential Information to those of its affiliates, directors, officers, employees, contractors
and other representatives who have a need to know such Confidential Information for purposes of such party performing its
obligations hereunder. The Receiving Party shall treat the Confidential Information of the Disclosing Party with at least the same
degree of care and protection as it would use with respect to its own confidential and proprietary information (and in no event
less than a reasonable degree of care), and except as expressly authorized by this Agreement, shall not itself, or allow others
to, copy, reverse engineer, disassemble, decompile, translate or create derivative works from all or any part of such Confidential
Information. The Receiving Party shall be fully and directly responsible and liable to the Disclosing Party for any breach of this
Section 10 by the Receiving Party’s employees or other third parties receiving access to the Disclosing Party’s
Confidential Information through or on behalf of the Receiving Party. 

 

10.3       Exclusions.
Notwithstanding the foregoing, this Agreement shall not prevent the Receiving Party from disclosing Confidential Information of
the Disclosing Party to the extent required by a judicial order or other legal obligation, provided that, in such event, the Receiving
Party shall promptly notify the Disclosing Party to allow intervention (and shall cooperate with the Disclosing Party) to contest
or minimize the scope of the disclosure (including application for a protective order). Further, each party may disclose the terms
and conditions of this Agreement: (a) as required by the applicable securities laws, including, without limitation, requirements
to file a copy of this Agreement (redacted to the extent reasonably permitted by applicable law) or to disclose information regarding
the provisions hereof or performance hereunder to applicable regulatory authorities; (b) in confidence, to legal counsel;
(c) in confidence, to accountants, banks and financing sources and their advisors; and (d) in connection with the enforcement
of this Agreement or any rights hereunder. 

 

11.    Miscellaneous.

 

11.1       Governing
Law. This Agreement is to be construed in accordance with and governed by the internal
laws of the State of California without giving effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. Any legal suit,
action or proceeding arising out of or relating to this Agreement shall be commenced in a federal court in the Southern District
of California or in state court in the County of Los Angeles, California, and each party hereto irrevocably submits to the exclusive
jurisdiction and venue of any such court in any such suit, action or proceeding.

 

11.2       Severability;
Waiver. If any provision of this Agreement is held by a court or other tribunal of competent
jurisdiction to be invalid or unenforceable for any reason, the remaining provisions shall continue in full force and effect without
being impaired or invalidated in any way, and the parties agree to replace any invalid provision with a valid provision which most
closely approximates the intent and economic effect of the invalid provision. The waiver by either party of a breach of or default
under any provision of this Agreement shall not be effective unless in writing and shall not be construed as a waiver of any subsequent
breach of or default under the same or any other provision of this Agreement. Further, any failure or delay on the part of either
party to exercise or avail itself of any right or remedy that it has or may have hereunder shall not operate as a waiver of any
such right or remedy or preclude other or further exercise thereof or of any other right or remedy. 

 

    	7

    	 

    

 

11.3       Headings.
Headings used in this Agreement are for reference purposes only and in no way define, limit, construe or describe the scope or
extent of such section or in any way affect this Agreement.

 

11.4       Assignment.
Neither party shall assign, delegate or otherwise transfer any of its rights or obligations hereunder without the prior written
consent of the other party. Notwithstanding the foregoing, either party may assign this Agreement in its entirety, without consent
of the other party, in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all of
assets. Subject to the foregoing, this Agreement shall bind and inure to the benefit of the parties, their respective successors
and permitted assigns.

 

11.5       Relationship
of the Parties. Each party to this Agreement is acting as an independent contractor, and
nothing in this Agreement shall create or be construed to create any partnership, joint venture, agency, franchise, sales representative
or employment relationship between the parties. Except as otherwise provided in this Agreement, neither party shall have any right,
power or authority to act or create any obligation, express or implied, on behalf of the other. 

 

11.6       Force
Majeure. The failure of either party to perform any obligation under this Agreement or
any Purchase Order as a result of governmental action, laws, orders, regulations, directions or requests, or as a result of events,
such as war, acts of public enemies, strikes or other labor disturbances, fires, floods, acts of God or any causes of like or different
kind beyond the reasonable control of that party, shall be excused for so long as such cause exists.

 

11.7       Notices.
Any notices required or permitted hereunder shall be given to the appropriate party at the address specified below or at such other
address as the party may specify in writing. Such notice shall be deemed given: (a) if delivered personally, upon delivery
as evidenced by delivery records; (b) if sent by telephone facsimile, upon confirmation of receipt; (c) if sent by certified
or registered mail, postage prepaid, five (5) days after the date of mailing; (d) if sent by electronic mail with a return
acknowledgement (via electronic mail) from recipient, upon receipt of such acknowledgement; or (e)  if sent by nationally
recognized express courier, upon delivery by such courier.

 

Petrosonic:

 

Petrosonic Albania

c/o Petrosonic Energy, Inc.

Suite 300, 714 – 1 Street SE

Calgary, Alberta T2G 2G8

Canada

E-mail: art@petrosonic.net

 

IDK:

 

Sejdin Berhamaj

E-mail: eldishpk@yahoo.com

Address: As provided on the Signature Page

 

11.8       Counterparts.
This Agreement may be executed in one or more counterparts each of which shall be deemed an original and all of which shall be
taken together and deemed to be one instrument.

 

    	8

    	 

    

 

11.9       Injunctive
Relief. Each party acknowledges and agrees that, due to the unique and valuable nature
of the Confidential Information and other proprietary information and materials of the other party, there can be no adequate remedy
at law for any breach by such party of Sections 7 or 10 of this Agreement, that any such breach may result in irreparable harm
to the non-breaching party for which monetary damages would be inadequate to compensate the non-breaching party, and that the non-breaching
party shall have the right, in addition to any other rights available under applicable law, to obtain from any court of competent
jurisdiction injunctive relief to restrain any breach or threatened breach of, or otherwise to specifically enforce, any covenant
or obligation of such party under Sections 7 or 10, without the necessity of posting any bond or security.

 

11.10    Order
of Precedence. In the event of any conflict, ambiguity or inconsistency between or among
the terms and conditions of this Agreement and any Purchase Order, the terms and conditions of this Agreement shall control.

 

11.11    Entire
Agreement. This Agreement, including the Exhibits attached hereto and incorporated herein
by this reference, sets forth the entire understanding and agreement between the parties as to the subject matter of this Agreement
and supersedes and merges all prior or contemporaneous proposals, discussions, negotiations, understandings, promises, representations,
conditions, communications and agreements, whether written or oral, between the parties with respect to such subject matter, and
all past courses of dealing or industry custom. This Agreement may be modified or amended only by a writing signed by both parties.
Neither party is relying upon any warranties, representations, assurances or inducements not expressly set forth herein.

 

11.12    Applicable
Laws. Each party shall: (a) obtain and maintain in full force and effect during the Term,
all material licenses, permits, approvals and other authorizations that are necessary or required to perform its obligations hereunder;
and (b) comply with all material applicable laws, statutes, ordinances, rules, regulations and judicial and administrative orders
and decrees.

 

11.13    Cumulative
Rights. Any specific right or remedy provided in this Agreement shall not be exclusive
but shall be cumulative upon all other rights and remedies set forth in this Agreement and allowed under applicable law.

 

[Remainder of Page Left Blank]

 

    	9

    	 

    

 

In
Witness Whereof, each of the parties has executed this Agreement as of the Effective Date.

 

	Petrosonic	 	IDK	 
	 	 	 	 	 	 
	By:	/s/ Art Agolli	 	 	By:	 
	 	 	 	 	 	 
	Name:	Art Agolli	 	 	Name:	Islam Mylkaj  /s/ Islam Mylkaj
	 	 	 	 	 	 
	Title:	CEO	 	 	Title:	CEO

 

	 	 	 	 
	Address for Notices:	 	Address for Notices:	IDK Petrol
	 	 	 	 	 	Albania Sha
	 	 	 	 	 	 
	Petrosonic Energy, Inc.	 	 	 
	 	 	 	 	 
	57 Valley Woods Way NW	 	 	Lagja 29 Nentou Fier
	 	 	 	 	 
	Calgary, AB, T3B 6A5, Canada	 	 	Albania
	 	 	 	 	 
	Fax:	 	 	Fax:	 
	 	 	 	 	 
	E-mail:	art@petrosonic.net	 	E-mail:	eberhomaj@live.net 

 

    	10

    	 

    

 

EXHIBIT
A

Purchase
Order Form

 

Purchase Order No. ___

 

	Commencement Date:	 	 
	 	 	 
	Completion Date:	 	 
	 	 	 
	Petrosonic Project Manager:	 	 
	 	 	 
	Description of Services:	 	 

 

	 
	 
	 

 

Deliverables, Specifications and Delivery Date:

 

	Quantity	 	Deliverable	 	Specifications	 	Delivery Date
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

Fees:

 

Obligations of IDK:

 

	 
	 
	 

 

Additional Terms and Conditions:

 

	 
	 
	 

 

Master Services Agreement 

 

    	 

    	 

    

 

	Agreed and Accepted:	 	 	 
	 	 	 	 	 
	Petrosonic	 	IDK	 
	 	 	 	 	 
	By:	 	 	By:	 
	 	 	 	 	 
	Name:	 	 	Name:	 
	 	 	 	 	 
	Title:	 	 	Title:	 

 

Master Services Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}]]