Document:

Nanophase Technologies Corporation 8-K

 

Exhibit 4.1

NANOPHASE TECHNOLOGIES CORPORATION

COMMON STOCK PURCHASE AGREEMENT

This Common Stock Purchase Agreement (this
“Agreement”) is made as of December 19, 2017 by and between Nanophase
Technologies Corporation, a Delaware corporation with its principal office at 1319 Marquette Drive, Romeoville, Illinois
60446 (the “Company”), and Bradford T. Whitmore (the “Purchaser”).

Recitals

A.       

The Company has authorized the sale and
issuance of up to 2,500,000 shares (the “Shares”) of the common stock of the Company, $0.01 par value per share
(the “Common Stock”), to an investor in a private placement (the “Offering”).

B.       

Under
Section 4(a)(2) of the Securities Act of 1933 (the “Securities Act”) and Rule 506(b) promulgated thereunder,
the Company desires to sell to the Purchaser and the Purchaser desires to purchase from the Company 2,500,000 shares of
Common Stock on the terms and subject to the conditions set forth in this Agreement.

Terms
and Conditions

The parties agree
as follows:

1.       

Purchase of the Shares.

1.1       

Agreement to Sell and Purchase. 
At the Closing (as hereinafter defined), the Company shall issue and sell to the Purchaser, and Purchaser shall purchase from the
Company 2,500,000 shares of Common Stock for an aggregate purchase price of $1,000,000 (the “Purchase Price”).
The purchase price for each Share purchased hereunder is $0.40.

1.2       

Closing; Closing Date. The parties
shall complete the sale and purchase of the Shares (the “Closing”) at 9:00 a.m. (Chicago time) on the date hereof
(the “Closing Date”), remotely by.pdf or other electronic transmission of documents or at such other time and
place as the Company and Purchaser may agree.

1.3       

Delivery of the Shares. At the Closing,
subject to the terms and conditions hereof, the Company will deliver to the Purchaser a stock certificate or certificates in such
denominations and registered in such names as the Purchaser may designate by notice to the Company, representing the Shares, dated
as of the Closing Date (each a “Certificate”), against payment of the purchase price therefor by cash in the
form of wire transfer, unless other means of payment is agreed upon by the Purchaser and the Company.

2.       

Representations and Warranties of the
Company.  The Company hereby represents and warrants to the Purchaser:

2.1       

Authorization. All corporate action
on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of
this Agreement has been taken. The Company has the requisite corporate power to enter into this Agreement and carry out and perform
its obligations under the terms of this Agreement. The Company has the requisite corporate power to issue and sell the Shares.
This Agreement has been duly authorized, executed and delivered by the Company and, upon due execution and delivery by the Purchaser,
this Agreement will be a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms,
except as rights to indemnity hereunder may be limited by federal or state securities laws and except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by
equitable principles.

2.2       

Organization, Good Standing and Qualification.
The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to carry on its business as now conducted.

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2.3       

SEC Filings; Financial Statements.
As used herein, the “Company SEC Documents” means all reports, schedules, forms, statements and other documents
filed or furnished, as applicable, by the Company under the Securities Exchange Act of 1934 (the “Exchange Act”),
including pursuant to Section 13(a) or 15(d) thereof, including the exhibits thereto and documents incorporated by reference therein.
As of their respective filing dates, the Company SEC Documents since December 31, 2016 complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and regulations of the Securities and Exchange Commission
(the “SEC”) promulgated thereunder, and none of these Company SEC Documents, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made not misleading. The Company SEC Documents include all filings
on Form 8-K which may have been required by reason of events occurring after December 31, 2016. The financial statements contained
in the Company SEC Documents since December 31, 2016: (i) complied in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods covered, except as may be indicated in the notes to
such financial statements and (in the case of unaudited statements) as permitted by Form 10-Q of the SEC, and except that unaudited
financial statements may not contain footnotes and are subject to year-end audit adjustments; and (iii) fairly present the financial
position of the Company as of the respective dates thereof and the results of operations, cash flows and the changes in stockholders’
equity of the Company for the periods covered thereby.

2.4       

Valid Issuance of Shares. The Shares
are duly authorized and, when issued, sold and delivered and paid for in accordance with the terms hereof, will be duly and validly
authorized and issued, fully paid and non-assessable, free from all taxes, liens, claims, encumbrances and charges with respect
to the issue thereof; provided, however, that the Shares may be subject to restrictions on transfer under state and/or federal
securities laws or as otherwise set forth herein. The issuance, sale and delivery of the Shares in accordance with the terms hereof
will not be subject to preemptive rights of stockholders of the Company.

3.       

Representations and Warranties of the
Purchaser. The Purchaser represents and warrants to the Company as follows:

3.1       

Legal Power.  The Purchaser has the
requisite authority to enter into this Agreement and to carry out and perform his obligations under the terms of this Agreement.
All action on the Purchaser’s part required for the lawful execution and delivery of this Agreement have been or will be
effectively taken prior to the Closing.

3.2       

Due Execution. This Agreement has
been duly authorized, executed and delivered by the Purchaser, and, upon due execution and delivery by the Company, this Agreement
will be a valid and binding agreement of the Purchaser, except as rights to indemnity hereunder may be limited by federal or state
securities laws and except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally or by equitable principles.

3.3       

Investment Representations. In connection
with the sale and issuance of the Shares, the Purchaser makes the following representations:

(a)       

Investment for Own Account. The
Purchaser is acquiring the Shares for his own account, not as nominee or agent, and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the Securities Act; provided,
however, that by making the representations herein, the Purchaser does not agree to hold any of the Shares for any minimum or 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 from the registration requirements of the Securities Act.

(b)       

Transfer Restrictions; Legends. The
Purchaser understands that (i) the Shares have not been registered under the Securities Act; (ii) the Shares are being offered
and sold pursuant to an exemption from registration, based in part upon the Company’s reliance upon the statements and representations
made by the Purchaser in this Agreement, and that the Shares must be held by the Purchaser indefinitely, and that the Purchaser
must, therefore, bear the economic risk of such investment indefinitely, unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration; (iii) each Certificate representing the Shares will be endorsed with
the following legend until the earlier of (1) such date as the Shares have been registered for resale by the Purchaser or (2) the
date the Shares are eligible for sale under Rule 144 under the Securities Act:

THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES
LAWS OF ANY STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
UNLESS SOLD PURSUANT TO EITHER AN EFFECTIVE REGISTRATION STATEMENT OR RULE 144 UNDER THE SECURITIES ACT, THE ISSUER OF THESE SECURITIES
MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

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(iv) the Company will instruct any transfer agent not to register
the transfer of the Shares (or any portion thereof) until the applicable date set forth in clause (iii) above unless (A) the conditions
specified in the foregoing legends are satisfied, (B) if the opinion of counsel referred to above is to the further effect that
such legend is not required in order to establish compliance with any provisions of the Securities Act or this Agreement, (C)
if the Purchaser provides the Company with reasonable assurance, such as through a representation letter, that the Shares may be
sold pursuant to Rule 144 under the Securities Act, or (D) other reasonably satisfactory assurances of such nature are given
to the Company. If so required by the Company’s
transfer agent, the Company shall cause its counsel to issue and deliver a legal opinion to the transfer agent to effect the removal
of the restrictive legend contemplated by this Agreement.

Purchaser may from time to time pledge,
and/or grant a security interest in some or all of the Shares pursuant to a bona fide margin agreement in connection with a bona
fide margin account and, if required under the terms of such agreement or account, the Purchaser may transfer pledged or secured
Shares to the pledgees or secured parties. Such a pledge or transfer is not subject to approval or consent of the Company and no
legal opinion of legal counsel to the pledgee, secured party or pledgor is required in connection with the pledge, but such legal
opinion may be required in connection with a subsequent transfer following default by the Purchaser to the transferee of the pledge.
No notice is required of such pledge. At the Purchaser’s expense, the Company will execute and deliver such reasonable documentation
as a pledgee or secured party of Shares may reasonably request in connection with a pledge or transfer of the Shares.

Certificates evidencing the Shares will
not contain any legend (including the legend set forth in this Section): (i) upon the effectiveness of a registration statement
(including the Registration Statement (as defined below)) covering the resale of the Shares, or (ii) following a sale of such Shares
pursuant to Rule 144, or (iii) while such Shares are eligible for sale under Rule 144, if such Shares have been held for one year
or more pursuant to the requirements of Rule 144, or (iv) if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the Staff of the SEC). Following such time as restrictive
legends are not required to be placed on certificates representing Shares, the Company will, no later than three business days
following the delivery by the Purchaser to the Company or the Company’s transfer agent of a certificate representing Shares
containing a restrictive legend and such other documentation and representations as the Company, its legal counsel or transfer
agent may reasonably request to confirm compliance with the preceding sentence as applicable (provided, however, that neither the
Company nor its legal counsel will require a legal opinion in connection with any sale pursuant to Rule 144), deliver or cause
to be delivered to the Purchaser a certificate representing such Shares that is free from all restrictive and other legends. The
Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the effective date
of a registration statement covering the Shares if required by the Company’s transfer agent to effect the removal of the
legend hereunder. The Company may not make any notation on its records or give instructions to any transfer agent of the Company
that enlarge the restrictions on transfer set forth in this Section. Certificates for Shares subject to legend removal hereunder
shall be transmitted by the transfer agent of the Company to the Purchaser by crediting the account of the Purchaser’s prime
broker with the Depository Trust Company system. The Company will pay all fees and expenses of its transfer agent and the Depository
Trust Company in connection with the removal of legends pursuant to this Section 3.3(b).

Removal of the restrictive legend from
certificates representing Shares as set forth in this Section 3.3(b) is predicated upon the Company’s reliance that
the Purchaser will sell any Shares pursuant to either the registration requirements of the Securities Act, including any applicable
prospectus delivery requirements, or an exemption therefrom.

(c)       

Financial Sophistication; Due Diligence.
The Purchaser has such knowledge and experience in financial or business matters that he is capable of evaluating the merits
and risks of the investment in connection with the transactions contemplated in this Agreement. The Purchaser has, in connection
with his decision to purchase the Shares, relied only upon the representations and warranties contained herein and the information
contained in the Company SEC Documents. Further, the Purchaser has had such opportunity to obtain additional information and to
ask questions of, and receive answers from, the Company, concerning the terms and conditions of the investment and the business
and affairs of the Company, as the Purchaser considers necessary in order to form an investment decision.

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(d)       

Accredited Investor Status. The
Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of the rules and regulations promulgated
under the Securities Act.

(e)       

General
Solicitation. The Purchaser is not purchasing the
Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper,
magazine or similar media or broadcast over the television or radio or presented at any seminar or any other general solicitation
or general advertisement. Prior to the time that the Purchaser was first contacted by the Company the Purchaser had a pre-existing
and substantial relationship with the Company.

3.4       

No Investment, Tax or Legal Advice.
The Purchaser understands that nothing in the Company SEC Documents, this Agreement, or any other materials presented to the Purchaser
in connection with the purchase and sale of the Shares constitutes legal, tax or investment advice. The Purchaser has consulted
such legal, tax and investment advisors as he, in his sole discretion, has deemed necessary or appropriate in connection with his
purchase of Shares.

3.5       

Additional Acknowledgement. The Purchaser
acknowledges that he has independently evaluated the merits of the transactions contemplated by this Agreement, that he has independently
determined to enter into the transactions contemplated hereby, and that he is not relying on any advice from or evaluation by any
other person.

3.6       

No
Short Position.  As of the date hereof, and as of the date of the public announcement of the Offering, the Purchaser
does not and will not (between the date hereof and the date of the public announcement of the Offering) engage in any short sale
of the Company’s voting stock or any other type of hedging transaction involving the Company’s securities (including,
without limitation, depositing shares of the Company’s securities with a brokerage firm where such securities are made available
by the broker to other customers of the firm for purposes of hedging or short selling the Company’s securities).

3.7       

4.       

Reporting Status. With a view to
making available to the Purchaser the benefits of certain rules and regulations of the SEC which may permit the sale of the Shares
to the public without registration, the Company agrees to use its reasonable efforts to file with the SEC, in a timely manner all
reports and other documents required of the Company under the Exchange Act. The Company will otherwise take such further action
as the Purchaser may reasonably request, all to the extent required from time to time to enable the Purchaser to sell the Shares
without registration under the Securities Act or any successor rule or regulation adopted by the SEC.

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5.       

Registration Rights.

5.1       

Demand Registration.

(a)       

Requests for Registration. At any
time after four years after the date of this Agreement, the Purchaser may demand that the Company register all or part of the Registrable
Securities (as defined below) under the Securities Act (a “Demand Registration”) on Forms S-1 or S-3 (or similar
forms then in effect) (each, a “Registration Statement”) promulgated by the SEC under the Securities Act. Within
ten days after receipt of a demand, the Company shall notify in writing all holders of Registrable Securities of the demand. Any
holder who wants to include his, her, or its Registrable Securities in the Demand Registration must notify the Company within ten
business days of receiving the notice of the Demand Registration. Except as provided in this Section 5, the Company shall include
in all Demand Registrations all Registrable Securities for which the Company receives timely written demands for inclusion. All
demands made pursuant to this Section 5.1(a) must specify the number of Registrable Securities to be registered (which may not
be less than one third of the Registrable Securities) and the intended method of disposing of the Registrable Securities. The Company
shall prepare and file with (or confidentially submit to) the SEC a Registration Statement covering all of the Registrable Securities
that the holders thereof have requested to be included pursuant to such Demand Registration within 90 days after the date on which
the initial request is given and will use its commercially reasonable efforts to cause such Registration Statement to be declared
effective by the SEC as soon as practicable thereafter, subject to compliance with review by the SEC. Once a Registration Statement
is declared effective by the SEC, the Company shall maintain its effectiveness for at least one hundred 120 days (or such shorter
period as will terminate when all Registrable Securities covered by such Registration Statement have been sold or withdrawn). The
Company shall not be obligated to effect, or to take any action to effect, a registration pursuant to any demand notice in accordance
with this Section 5.1(a) after the Company has filed with the SEC three Registration Statements (counting for these purposes
only registrations which have been declared or ordered effective). For purposes of this Agreement, the term “Registrable
Securities” means (i) the Shares, and (ii) any Common Stock of the Company issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, any Shares.

(b)       

Selection of Underwriters.
The Company shall select the investment bankers and managers that will administer the offering as long as the investment bankers
and the managers are reasonably satisfactory to the holders of a majority of the Registrable Securities requested to be included
in a Demand Registration. The Company shall enter into a customary underwriting agreement with those investment bankers and managers.

(c)       

Delay in Filing.
The Company may delay the filing of the Registration Statement in connection with a Demand Registration for a period of not more
than 120 days upon the advice of the investment bankers and managers that will administer the offering that a delay is necessary
or appropriate under the circumstances to prevent a material adverse effect on the Company. The Company may not use this right
to delay more than once during the term of this Agreement.

(d)       

Priority on Demand
Registration. If the managing underwriters give the Company and the holders of the Registrable Securities being registered
a written opinion that the number of Registrable Securities requested to be included exceeds the number of securities that can
be sold, the Company will include in the registration only the number of Registrable Securities that the underwriters believe can
be sold. The number of securities registered shall be allocated pro rata among the holders of Registrable Securities on the basis
of the total number of Registrable Securities requested to be included in the registration.

5.2       

Piggyback Registration.

(a)       

If at any time the Company proposes to
prepare and file a Registration Statement or post-effective amendments thereto covering the sale for cash of shares of Common Stock,
including shares of Common Stock held by stockholders of the Company (in any such case, other than in connection with a merger,
acquisition, pursuant to Form S-8 or successor form, or on any form which does not include substantially the same information as
would be required to be included in a Registration Statement covering the sale of Registrable Securities), it will give written
notice of its intention to do so (“Notice”), at least 30 days prior to the filing of each such Registration
Statement, to the Purchaser. Upon the written request of the Purchaser, made within 20 days after the Notice is given, that the
Company include any or all of the Purchaser’s Registrable Securities in the proposed Registration Statement, the Company
shall use its best efforts to effect the registration under the Securities Act of the Registrable Securities which it has been
so requested to register (the “Piggyback Registration”).

(b)       

Notwithstanding the provisions of this
Section 5.2, the Company may at any time after it has given written notice pursuant to this Section 5.2 (irrespective of whether
any written request for inclusion of Registrable Securities shall have already been made) to elect not to file any such proposed
Registration Statement, or to withdraw the same after the filing but prior to the effective date thereof, without incurring any
liability to the Purchaser.

(c)       

If any Piggyback Registration is an underwritten
offering, the Company shall select the investment bankers and managers that will administer the offering, as long as the investment
bankers and managers are reasonably satisfactory to the holders of a majority of the Registrable Securities. The Company shall
enter into a customary underwriting agreement with the investment bankers and managers.

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5.3       

Registration Procedures.

(a) 

Whenever the Purchaser
requests the registration of any Registrable Securities under this Agreement, the Company shall use its reasonable best efforts
to register and permit the sale of the Registrable Securities in accordance with the intended method of disposition, and to effect
such registration and any related qualification or compliance with respect to all Registrable Securities held by the Purchaser.
If the Company is not eligible to use Form S-3 at the time of filing, and the Company subsequently becomes eligible to use Form
S-3, the Company shall file, as promptly as reasonably practicable, a new Registration Statement on Form S-3 covering the resale
of the Registrable Securities and replace the Registration Statement on Form S-1 with the new Registration Statement on Form S-3
upon the effectiveness of the new Registration Statement on Form S-3.

(b)       

The Company shall use
its best efforts to:

(i)       

prepare and file with
the SEC such amendments and supplements to the Registration Statement and the Prospectus used in connection therewith as may be
necessary or advisable to keep the Registration Statement current and effective for the Registrable Securities held by the Purchaser
for a period ending on the earlier of (i) the date on which all Registrable Securities may be sold pursuant to Rule 144 under the
Securities Act or any successor rule (“Rule 144”) during any three-month period without the requirement for
the Company to be in compliance with the current public information required under Rule 144(c)(1), or (ii) such time as all Registrable
Securities have been sold pursuant to a registration statement or Rule 144. The Company shall notify the Purchaser promptly upon
the Registration Statement and each post-effective amendment thereto, being declared effective by the SEC and advise the Purchaser
that the form of Prospectus contained in the Registration Statement or post-effective amendment thereto, as the case may be, at
the time of effectiveness meets the requirements of Section 10(a) of the Securities Act or that it intends to file a Prospectus
pursuant to Rule 424(b) under the Securities Act that meets the requirements of Section 10(a) of the Securities Act;

(ii)       

furnish to the Purchaser
with respect to the Registrable Securities registered under the Registration Statement such number of copies of the Registration
Statement and the Prospectus (including supplemental prospectuses) filed with the SEC in conformance with the requirements of the
Securities Act and other such documents as the Purchaser may reasonably request, in order to facilitate the public sale or other
disposition of all or any of the Registrable Securities by the Purchaser;

(iii)        make
any necessary blue sky filings;

(iv)        pay
the expenses incurred by the Company and the Purchaser in complying with Section 5, including, all registration and filing fees,
FINRA fees, exchange listing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees and expenses
and the expense of any special audits incident to or required by any such registration (but excluding attorneys’
fees of the Purchaser and any and all underwriting discounts and selling commissions applicable to the sale of Registrable
Securities by the Purchaser);

(v)        advise
the Purchaser, promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the SEC delaying
or suspending the effectiveness of the Registration Statement or of the initiation of any proceeding for that purpose; and it will
promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest
possible moment if such stop order should be issued; and

(vi)       

with a view to making
available to the Purchaser the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit the
Purchaser to sell Registrable Securities to the public without registration, the Company covenants and agrees to: (i) make and
keep public information available, as such term is understood and defined in Rule 144, until the earlier of (A) such date as all
of the Registrable Securities qualify to be resold immediately pursuant to Rule 144 or any other rule of similar effect during
any three-month period without the requirement for the Company to be in compliance with the current public information required
under Rule 144(c)(1) or (B) such date as all of the Registrable Securities shall have been resold pursuant to Rule 144 (and
may be further resold without restriction); (ii) file with the SEC in a timely manner all reports and other documents required
of the Company under the Securities Act and under the Exchange Act; and (iii) furnish to the Purchaser upon request, as long as
the Purchaser owns any Registrable Securities, (A) a written statement by the Company as to whether it has complied with the reporting
requirements of the Securities Act and the Exchange Act, (B) a copy of the Company’s most recent Annual Report on Form 10-K
or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail the Purchaser
of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration.

The Company understands
that the Purchaser disclaims being an underwriter, but acknowledges that a determination by the SEC that the Purchaser is deemed
an underwriter does not relieve the Company of any obligations it has hereunder.

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5.4       

Transfer of Shares
After Registration; Suspension. 

(a)       

Except if Section 5.4(b)
applies, the Company shall: (i) if deemed necessary or advisable by the Company, prepare and file from time to time with the SEC
a post-effective amendment to the Registration Statement or a supplement to the related Prospectus or a supplement or amendment
to any document incorporated therein by reference or file any other required document so that such Registration Statement will
not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and so that, as thereafter delivered to purchasers of the Registrable Securities
being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading; (ii) provide the Purchaser copies of any documents filed pursuant to Section 5.4(a)(i); and (iii) upon request,
inform the Purchaser if he so requests that the Company has complied with its obligations in Section 5.4(b)(i) (or that, if the
Company has filed a post-effective amendment to the Registration Statement which has not yet been declared effective, the Company
will notify the Purchaser to that effect, will use its reasonable best efforts to secure the effectiveness of such post-effective
amendment as promptly as possible and will promptly notify the Purchaser pursuant to Section 5.4(b)(i) when the amendment has become
effective).

(b)       

If: (i) of any request
by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement
for amendments or supplements to the Registration Statement or related Prospectus or for additional information; (ii) of the issuance
by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; (iii) of the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation of any proceeding for such purpose; or (iv) of any event or circumstance which necessitates the making of any
changes in the Registration Statement or Prospectus, or any document incorporated or deemed to be incorporated therein by reference,
so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case
of the Prospectus, it will not contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
then the Company shall promptly deliver a certificate in writing to the Purchaser (the “Suspension Notice”)
to the effect of the foregoing and, upon receipt of such Suspension Notice, the Purchaser will refrain from selling any Registrable
Securities pursuant to the Registration Statement (a “Suspension”) until the Purchaser is advised in writing
by the Company that the current Prospectus may be used, and has received copies from the Company of any additional or supplemental
filings that are incorporated or deemed incorporated by reference in any such Prospectus. If any Suspension occurs, the Company
will use its reasonable best efforts to cause the use of the Prospectus so suspended to be resumed as soon as reasonably practicable
after delivery of a Suspension Notice to the Purchaser. In addition to and without limiting any other remedies (including, without
limitation, at law or at equity) available to the Company and the Purchaser, each of the Company and the Purchaser is entitled
to specific performance if the other party fails to comply with the provisions of this Section 5.4(b).

(c)       

Notwithstanding the
foregoing paragraphs of this Section 5.4, the Company shall use its reasonable best efforts to ensure that (i) a Suspension shall
not exceed 30 days individually, (ii) Suspensions covering no more than 45 days, in the aggregate, shall occur during any twelve
month period and (iii) each Suspension must be separated by a period of at least 30 days from a prior Suspension (each Suspension
that satisfies the foregoing criteria being referred to herein as a “Qualifying Suspension”).

(d)       

The Company shall, immediately
following the Registration Statement being declared effective, cause its counsel to issue a legal opinion to the Company’s
transfer agent to effect the removal of the restrictive legend contemplated by this Agreement. The Company may not make any notation
on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in
this Agreement. Certificates for Registrable Securities subject to legend removal hereunder shall be transmitted by the transfer
agent of the Company to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust
Company system.

5.5       

Indemnification.
For the purpose of this Section 5.5:

(a)       

the term “Registration
Statement” includes any final Prospectus, exhibit, supplement or amendment included in or relating to, and any document
incorporated by reference in, the Registration Statement (or deemed to be a part thereof) referred to in Section 5.1; and

    	 	 	Page 7

    	 

    

 

(b)       

the term “untrue
statement” means any untrue statement or alleged untrue statement of a material fact, or any omission or alleged omission
to state in the Registration Statement a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

(c)       

The Company shall indemnify
and hold harmless the Purchaser from and against any losses, claims, damages or liabilities to which the Purchaser may become subject
(under the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon (i) any untrue statement of a material fact contained in the Registration Statement, (ii)
any inaccuracy in the representations and warranties of the Company contained in this Agreement or the failure of the Company to
perform its obligations hereunder or (iii) any failure by the Company to fulfill any undertaking included in the Registration Statement,
and the Company will reimburse the Purchaser for any reasonable legal expense or other actual accountable out-of-pocket expenses
reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided, however,
that the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of, or
is based upon, an untrue statement made in such Registration Statement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Purchaser specifically for use in preparation of the Registration Statement or
the failure of the Purchaser to comply with his covenants and agreements contained herein or any statement or omission in any Prospectus
that is corrected in any subsequent Prospectus that was delivered to the Purchaser prior to the pertinent sale or sales by the
Purchaser.

(d)       

The Purchaser shall
indemnify and hold harmless the Company (and each person, if any, who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, each officer of the Company who signs the Registration Statement and each
director of the Company) from and against any losses, claims, damages or liabilities to which the Company (or any such officer,
director or controlling person) may become subject (under the Securities Act or otherwise), insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, (i) any failure by the Purchaser
to comply with the covenants and agreements contained in this Section 5 or (ii) any untrue statement of a material fact contained
in the Registration Statement if, and only if, such untrue statement was made in reliance upon and in conformity with written information
furnished by or on behalf of the Purchaser specifically for use in preparation of the Registration Statement, and the Purchaser
will reimburse the Company (or such officer, director or controlling person, as the case may be), for any reasonable legal expense
or other reasonable actual accountable out-of-pocket expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim. The obligation to indemnify is limited to the net amount of the proceeds received by the
Purchaser from the sale of the Registrable Securities pursuant to the Registration Statement.

(e)       

Promptly after receipt
by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against
an indemnifying person pursuant to this Section 5.5, such indemnified person shall notify the indemnifying person in writing of
such claim or of the commencement of such action, but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party under this Section 5.5 (except to the extent that such omission materially
and adversely affects the indemnifying party’s ability to defend such action) or from any liability otherwise than under
this Section 5.5. Subject to the provisions hereinafter stated, in case any such action is brought against an indemnified person,
the indemnifying person is entitled to participate therein, and, to the extent that it elects by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such indemnified party, is entitled to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified person. After notice from the indemnifying person to such indemnified
person of his or its election to assume the defense thereof (unless it has failed to assume the defense thereof and appoint counsel
reasonably satisfactory to the indemnified party), such indemnifying person is not liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the defense thereof; provided, however, that if there
exists a conflict of interest that would make it inappropriate, in the reasonable opinion of counsel to the indemnified person,
for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof,
the indemnified person is entitled to retain his or its own counsel (who shall not be the same as the opining counsel) at the expense
of such indemnifying person; provided, however, that no indemnifying person is responsible for the fees and expenses of more than
one separate counsel (together with appropriate local counsel) for all indemnified parties. In no event is any indemnifying person
liable in respect of any amounts paid in settlement of any action unless the indemnifying person has approved the terms of such
settlement; provided that such consent may not be unreasonably withheld. No indemnifying person shall, without the prior written
consent of the indemnified person, effect any settlement of any pending or threatened proceeding in respect of which any indemnified
person is or could reasonably have been a party and indemnification could have been sought hereunder by such indemnified person,
unless such settlement includes an unconditional release of such indemnified person from all liability on claims that are the subject
matter of such proceeding.

    	 	 	Page 8

    	 

    

 

(f)       

If the indemnification
provided for in this Section 5.5 is unavailable to or insufficient to hold harmless an indemnified party under subsection (c) or
(d) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and the Purchaser on the other in connection with the statements or omissions or other matters which
resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault is determined by reference to, among other things, in the case of an untrue statement, whether
the untrue statement relates to information supplied by the Company on the one hand or the Purchaser on the other and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement. The Company and
the Purchaser agree that it would not be just and equitable if contribution pursuant to this subsection (f) were determined by
pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred
to above in this subsection (f). The amount paid or payable by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to above in this subsection (f) is deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (f), the Purchaser is not required to contribute any amount in excess of the
amount by which the net amount received by that the Purchaser from the sale of the Registrable Securities to which such loss relates
exceeds the amount of any damages which the Purchaser has otherwise been required to pay to the Company by reason of such untrue
statement. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) is entitled
to contribution from any person who was not guilty of such fraudulent misrepresentation.

(g)       

The parties to this
Agreement hereby acknowledge that they are sophisticated business persons who were represented by counsel during the negotiations
regarding the provisions hereof including, without limitation, the provisions of this Section 5.5, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 5.5 fairly allocate the risks in light of the ability
of the parties to investigate the Company and its business in order to assure that adequate disclosure is made in the Registration
Statement as required by the Securities Act and the Exchange Act.

(h)       

The obligations of the
Company and of the Purchaser under this Section 5.5 survive completion of any offering of Registrable Securities in such Registration
Statement for a period of two years from the effective date of the Registration Statement. No indemnifying party, in the defense
of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or litigation.

5.6       

Termination of Conditions
and Obligations. The conditions precedent imposed by Section 3 or this Section 5 upon the transferability of the Registrable
Securities cease and terminate as to any particular number of the Registrable Securities when such Registrable Securities have
been effectively registered under the Securities Act and sold or otherwise disposed of in accordance with the intended method of
disposition set forth in the Registration Statement covering such Registrable Securities or at such time as an opinion of counsel
satisfactory to the Company has been rendered to the effect that such conditions are not necessary in order to comply with the
Securities Act. The Company shall request an opinion of counsel promptly upon receipt of a request therefor from the Purchaser.

5.7       

Information Available.
So long as the Registration Statement is effective covering the resale of Registrable Securities owned by the Purchaser, the
Company will furnish (or, to the extent such information is available electronically through the Company’s filings with the
SEC, the Company will make available via the SEC’s EDGAR system or any successor thereto) to the Purchaser:

(a)       

as soon as practicable
after it is available, one copy of (i) its Annual Report to Stockholders (which Annual Report shall contain financial statements
audited in accordance with generally accepted accounting principles by a national firm of certified public accountants) and (ii)
if not included in substance in the Annual Report to Stockholders, its Annual Report on Form 10-K (the foregoing, in each case,
excluding exhibits);

    	 	 	Page 9

    	 

    

 

(b)       

upon the request of
the Purchaser, all exhibits excluded by the parenthetical to subparagraph (a)(ii) of this Section 5.7 as filed with the SEC and
all other information that is made available to stockholders; and

(c)       

upon the reasonable
request of the Purchaser, an adequate number of copies of the Prospectuses to supply to any other party requiring such Prospectuses;
and the Company, upon the reasonable request of the Purchaser, will meet with the Purchaser or a representative thereof at the
Company’s headquarters during the Company’s normal business hours to discuss all information relevant for disclosure
in the Registration Statement covering the Registrable Securities and will otherwise reasonably cooperate with the Purchaser conducting
an investigation for the purpose of reducing or eliminating the Purchaser’s exposure to liability under the Securities Act,
including the reasonable production of information at the Company’s headquarters; provided, that the Company is not required
to disclose any confidential information to or meet at its headquarters with the Purchaser until and unless the Purchaser has entered
into a confidentiality agreement in form and substance reasonably satisfactory to the Company with the Company with respect thereto.

5.8       

Assignment of Registration
Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 5 may be assigned by the
Purchaser to a party that acquires, other than pursuant to the Registration Statement or Rule 144, any of the Registrable Securities
originally issued or issuable to the Purchaser as contemplated by this Agreement, or to any affiliate of the Purchaser that acquires
any Registrable Securities. Any such permitted assignee has all the rights of the Purchaser under this Section 5 with respect to
the Registrable Securities transferred.

5.9       

Selling
Stockholder Questionnaire. The Purchaser agrees to furnish to the Company a completed questionnaire in the form attached to
this Agreement as Exhibit A (a “Selling Stockholder Questionnaire”). The Company is not required to include
the Registrable Securities of the Purchaser in a Registration Statement and is not be required to pay any liquidated or other damages
hereunder to the Purchaser if he fails to furnish to the Company a fully completed Selling Stockholder Questionnaire at least three
business days prior to the filing of the Registration Statement.

6.       

Miscellaneous.

6.1       

Governing Law. This Agreement is
governed by and construed in accordance with the laws of the State of Illinois, without regard to the choice of law provisions
thereof, and the federal laws of the United States.

6.2       

Successors and Assigns. Except as
otherwise expressly provided herein, the provisions hereof inure to the benefit of, and are binding upon, the successors, assigns,
heirs, executors, and administrators of the parties hereto. Notwithstanding the foregoing, the Company may not assign this Agreement
or any rights or obligations hereunder without the prior written consent of the Purchaser, and
the Purchaser may not assign this Agreement or any rights or obligations hereunder without the assignee agreeing to be bound by
the terms hereof applicable to the Purchaser and make the representations required of the Purchaser hereunder.

6.3       

Entire Agreement. This Agreement
and the exhibits hereto, and the other documents delivered pursuant hereto, constitute the full and entire understanding and agreement
among the parties with regard to the subjects hereof and no party is liable or bound to any other party in any manner by any representations,
warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto and their respective successors and assigns, any rights,
remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.

6.4       

Severability.  If any provision of
this Agreement is invalid, illegal, or unenforceable, it is to the extent practicable, modified so as to make it valid, legal and
enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of
the remaining provisions are not in any way be affected or impaired thereby.

6.5       

Amendment and Waiver. Except as otherwise
provided herein, any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively, and either for a specified period of time or indefinitely),
with the written consent of the Company and the Purchaser. Any amendment or waiver made in accordance with this Section 6.5 is
binding upon any holder of any Shares purchased under this Agreement, each future holder of all such securities, and the Company.

    	 	 	Page 10

    	 

    

 

6.6       

Fees and Expenses. Except as otherwise
set forth herein, the Company and the Purchaser bear its or his own expenses and legal fees incurred on its or his behalf with
respect to this Agreement and the transactions contemplated hereby. Each party hereby agrees to indemnify and to hold harmless
of and from any liability the other parties for any commission or compensation in the nature of a finder’s fee to any broker
or other person or firm (and the costs and expenses of defending against such liability or asserted liability) for which such indemnifying
party or any of his or its employees or representatives are responsible.

6.7       

Notices. All notices, requests, consents
and other communications hereunder must be in writing, delivered (A) if within the United States, by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid or by facsimile or electronic mail, or (B)
if from outside the United States, by International Federal Express (or comparable service) or by facsimile or electronic mail,
and deemed given (i) if delivered by first-class registered or certified mail domestic, upon the business day received, (ii) if
delivered by nationally recognized overnight carrier, one business day after timely delivery to such carrier, (iii) if delivered
by International Federal Express (or comparable service), two business days after so mailed, or (iv) if delivered by facsimile
or electronic mail at or prior to 5:30 p.m. (Chicago time) on a business day, on the business day so delivered or, if delivered
by facsimile or electronic mail after 5:30 p.m. (Chicago time) on a business day or on a day that is not a business day, the next
business day after the date of delivery, and addressed as follows, or to such other address or addresses as may have been furnished
in writing by a party to another party pursuant to this paragraph:

	 	●	if to the Company, to the address of the Company’s principal office set forth on the first page of this Agreement, Attention: Chief Executive Officer, e-mail: jjankowski@nanophase.com 
	 	 	 
	 	●	if to the Purchaser, at his address on the signature page to this Agreement.

 

6.8       

Survival of Representations, Warranties
and Agreements. Notwithstanding any investigation made by any party to this Agreement, all covenants, agreements, representations
and warranties made by the Company and the Purchaser herein survive the execution of this Agreement, the delivery to the Purchaser
of the Shares being purchased and the payment therefor, and a party’s reliance on such representations and warranties are
not affected by any investigation made by such party or any information developed thereby.

6.9       

Counterparts. This Agreement may
be executed by electronic or facsimile signature and in any number of counterparts, each of which is deemed an original, but all
of which together constitute one instrument.

6.10       

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

 

[The Remainder of this Page is Blank;
Signature Pages Follow]

 

    	 	 	Page 11

    	 

    

 

Signed:

 

	 	NANOPHASE TECHNOLOGIES CORPORATION
	 	 
	 	 
	 	By: 	/s/ Jess Jankowski
	 	Name:	Jess Jankowski
	 	Title: 	President & Chief Executive Officer

 

 

[Signature Page to Common Stock Purchase
Agreement]

 

    	 

    	 

    

 

Signed:

 

	 	/s/ Bradford T. Whitmore
	 	Bradford T. Whitmore
	 	 
	 	 
	 	 
	 	 
	 	Investment Amount (# shares): 2,500,000
	 	Investment Amount ($ @ $0.40/share): $1,000,000
	 	 
	 	 
	 	Address for Notice:
	 	 
	 	1603 Orrington Avenue, Ste 900
	 	Evanston, IL 60201
	 	Attention:     Bradford Whitmore
	 	Telephone:   847 733 1230
	 	Facsimile:     847 454 3651
	 	 
	 	Delivery Instructions (if different from above):
	 	 
	 	 
	 	 
	 	 
	 	Attention: ______________________________
	 	Telephone: _____________________________

 

[Signature Page to Common Stock Purchase
Agreement]

 

    	 

    	 

    

 

EXHIBIT A

SELLING STOCKHOLDER QUESTIONNAIRE

NANOPHASE TECHNOLOGIES CORPORATION

Questionnaire for Selling Stockholder

This questionnaire is necessary to obtain
information to be used by Nanophase Technologies Corporation (the “Company”) to complete a Registration Statement
(the “Registration Statement”) covering the resale of certain shares of Company Common Stock currently outstanding.
Please complete and return this questionnaire to Faegre Baker Daniels LLP, the Company’s legal counsel, to the attention
of Janelle Blankenship either by mail to Faegre Baker Daniels LLP, 600 East 96th Street, Suite 600, Indianapolis,
Indiana 46240 or by fax to 317.569.4800. Please return the questionnaire by [Day], [Month Day], 20__ or sooner, if possible.
Call Janelle Blankenship at 317.569.4881 with questions.

FAILURE TO RETURN THE QUESTIONNAIRE MAY
RESULT IN THE EXCLUSION OF YOUR NAME AND SHARES FROM THE REGISTRATION STATEMENT.

Please answer all questions. If the
answer to any question is “None” or “Not Applicable,” please so state.

If there is any question about which you
have any doubt, please set forth the relevant facts in your answer.

1.       

Please correct your name and/or address
if not correct below

 

	 	Name:  	 

 

 

	 	Address: 	 
	 	 	 
	 	 	 

 

 

___________________

*See Appendix A for definitions

 

    	 	 	Page A-1

    	 

    

 

	2.	Please state the total number of currently outstanding shares of Company Common Stock that you beneficially own* and the form of ownership and the date that you acquired such stock.  Include shares registered in your name individually or jointly with others and shares held in the name of a bank, broker, nominee, depository or in “street name” for your account. (DO NOT list options, warrants or other derivative securities.  See Question #3). 

 

 

 

 

	3.	Please list any outstanding options and warrants to purchase Company Common Stock or other derivative securities to acquire Company Common Stock that you beneficially own*, including (i) the number of shares of Company Common Stock to be issued upon the exercise of such option or warrant, (ii) the date such option or warrant is exercisable, (iii) the expiration date and (iv) the exercise price per share of EACH such option and warrant.

 

	Number of Shares Covered by Option or Warrant	Date Exercisable	Exercise Price	Expiration Date
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

 

	4.	Please list the number of shares of Common Stock listed under Question #2 above that you wish to include in the Registration Statement.

 

 

___________________

*See Appendix A for definitions

 

    	 	 	Page A-2

    	 

    

 

	5.	Please list the number of shares of Common Stock underlying warrants listed under Question #3 above that, upon exercise of such warrants, you wish to include in the Registration Statement.

 

 

 

 

	6.	If you are a limited liability company or limited partnership, please name the managing member or general partner and each person controlling such managing member or general partner.

 

 

 

 

	7.	If you are an entity, please identify the natural persons who exercises sole or shared voting power* and/or sole or shared investment power* with regard to the shares listed under Question #2 and Question #3.

 

 

 

 

	8.	Please advise whether you are a registered broker-dealer or an affiliate* thereof.  If you are an affiliate of a registered broker-dealer, please explain the nature of the affiliation and disclose whether you acquired the shares in the ordinary course of business and whether at the time of the acquisition you had any plans or proposals, directly or with any other person, to distribute the shares listed under Question #2 and Question #3.

 

 

 

 

	9.	List below the nature of any position, office or other material relationship that you have, or have had within the past three years, with the Company or any of its predecessors or affiliates*.

 

 

___________________

*See Appendix A for definitions

 

    	 	 	Page A-3

    	 

    

 

	10.	If you expressly wish to disclaim any beneficial ownership* of any shares listed under Question #2 for any reason in the Registration Statement, indicate below the shares and circumstances for disclaiming such beneficial ownership*.

 

 

 

 

	11.	With respect to the shares that you wish to include in the Registration Statement, please list any party that has or may have secured a lien, security interest or any other claim relating to such shares, and please give a full description of such claims.

 

 

 

 

	12.	Please review Appendix B “Plan of Distribution.”  Please identify and describe any method of distribution, other than described in Appendix B, that you plan on using to sell your shares of the Company’s Common Stock.  By signing below you agree to distribute your shares of the Company’s Common Stock as described in Appendix B and this Item 12 and to notify the Company of any plan to distribute the Company’s Common Stock that is not described in Appendix B or herein under Item 12.

 

 

 

 

The undersigned, a Selling Stockholder of the
Company, hereby furnishes the foregoing information for use by the Company in connection with the preparation of the Registration
Statement. The undersigned will notify Janelle Blankenship, at the address specified above, in writing immediately of any changes
in the foregoing answers that should be made as a result of any developments occurring prior to the time that all the shares of
Common Stock of the Company are sold pursuant to the Registration Statement referred to above. Otherwise, the Company is to understand
that the above information continues to be, to the best of the undersigned’s knowledge, information and belief, complete
and correct.

Dated: ___________ __, 20___

 

	 	 
	 	 
	 	 
	 	 
	 	By:	 
	 	Name:	 
	 	Its:	 

 

 

___________________

*See Appendix A for definitions

 

    	 	 	Page A-4

    	 

    

 

APPENDIX A

To Exhibit A

Certain
Terms Used in Questionnaire

AFFILIATE

An “affiliate” of a
company is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under
common control with, such company.

 

BENEFICIAL OWNERSHIP

A person “beneficially owns”
a security if such person, directly or indirectly, has or shares voting power or investment power of such security, whether through
a contract, arrangement, understanding, relationship or otherwise. A person is also the beneficial owner of a security if he has
the right to acquire beneficial ownership at any time within 60 days through the exercise of any option, warrant or right, or the
power to revoke a trust, discretionary account or similar arrangement.

 

INVESTMENT POWER

“Investment power”
includes the power to dispose, or to direct the disposition of, a security.

 

VOTING POWER

“Voting power” includes
the power to vote, or to direct the voting of, a security.

    	 	 	Page A-5

    	 

    

 

APPENDIX B

To
Exhibit A

PLAN OF DISTRIBUTION

We
are registering for resale by the selling stockholder and certain transferees a total of _________ shares of common stock, all
of which are issued and outstanding. We will not receive any of the proceeds from the sale by the selling stockholder of the shares
of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock. If the shares
of common stock are sold through broker-dealers or agents, the selling stockholder will be responsible for any compensation to
such broker-dealers or agents.

The
selling stockholder may pledge or grant a security interest in some or all of the shares of common stock owned by him and, if he
defaults in the performance of his secured obligations, the pledgees or secured parties may offer and sell the shares of common
stock from time to time pursuant to this prospectus.

The
selling stockholder also may transfer and donate the shares of common stock in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The
selling stockholder will sell his shares of common stock subject to the following:

	 	●	all of a portion of the shares of common stock beneficially owned by the selling stockholder or his perspective pledgees, donees, transferees or successors in interest, may be sold on the OTC Bulletin Board Market, any national securities exchange or quotation service on which the shares of our common stock may be listed or quoted at the time of sale, in the over-the counter market, in privately negotiated transactions, through the writing of options, whether such options are listed on an options exchange or otherwise, short sales or in a combination of such transactions;
	 	●	each sale may be made at market price prevailing at the time of such sale, at negotiated prices, at fixed prices or at carrying prices determined at the time of sale;
	 	●	some or all of the shares of common stock may be sold through one or more broker-dealers or agents and may involve crosses, block transactions or hedging transactions.  The selling stockholder may enter into hedging transactions with broker-dealers or agents, which may in turn engage in short sales of the common stock in the course of hedging in positions they assume. The selling stockholder may also sell shares of common stock short and deliver shares of common stock to close out short positions or loan or pledge shares of common stock to broker-dealers or agents that in turn may sell such shares;
	 	●	in connection with such sales through one or more broker-dealers or agents, such broker-dealers or agents may receive compensation in the form of discounts, concessions or commissions from the selling stockholder and may receive commissions from the purchasers of the shares of common stock for whom they act as broker-dealer or agent or to whom they sell as principal (which discounts, concessions or commissions as to particular broker-dealers or agents may be in excess of those customary in the types of transaction involved).  Any broker-dealer or agent participating in any such sale may be deemed to be an “underwriter” within the meaning of the Securities Act and will be required to deliver a copy of this prospectus to any person who purchases any share of common stock from or through such broker-dealer or agent.  We have been advised that, as of the date hereof, the selling stockholder has not made any arrangements with any broker-dealer or agent for the sale of his shares of common stock; and
	 	●	in connection with any other sales or transfers of common stock not prohibited by law.

 

The
selling stockholder and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be “underwriters”
within the meaning of the Securities Act, and any profits realized by the selling stockholder and any commissions paid, or any
discounts or concessions allowed to any such broker-dealer may be deemed to be underwriting commissions or discounts under the
Securities Act. In addition, any shares of common stock covered by this prospectus which qualify for sale pursuant to Rule 144
may be sold under Rule 144 rather than pursuant to this prospectus. The selling stockholder may also transfer, devise or gift the
shares of common stock by other means not covered in this prospectus in which case the transferee, devisee or giftee will be the
selling stockholder under this prospectus.

    	 	 	Page A-6

    	 

    

 

If
required at the time a particular offering of the shares of common stock is made, a prospectus supplement or, if appropriate, a
post-effective amendment to the shelf registration statements of which this prospectus is a part, will be distributed which will
set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name or names
of any broker-deals or agents, any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.

Under
the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers
or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified
for sale in such state or an exemption from registration or qualification is available and is complied with. There can be no assurance
that the selling stockholder will sell any or all of the shares of common stock registered pursuant to the shelf registration statement,
of which this prospectus forms a part.

The
selling stockholder and any other person participating in such distribution will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit
the timing of purchases and sales of any of the shares of common stock by the selling stockholder and any other participating person.
Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in
market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares
of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common
stock.

We will bear all expenses of the registration
of the shares of common stock including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance
with the state securities of “blue sky” laws. The selling stockholder will pay all underwriting discounts and selling
commissions and expenses, brokerage fees and transfer taxes, as well as the fees and disbursements of counsel to and experts for
the selling stockholder, if any. We will indemnify the selling stockholder against liabilities, including some liabilities under
the Securities Act, in accordance with the registration rights agreement or the selling stockholder will be entitled to contribution.
We will be indemnified by the selling stockholder against civil liabilities, including liabilities under the Securities Act that
may arise from any written information furnished to us by the selling stockholder for use in this prospectus, in accordance with
the related securities purchase agreement or will be entitled to contribution. Once sold under this shelf registration statement,
of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than our
affiliates.

 

    	 	 	Page A-7Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of December 21, 2017, between Nxt-ID, Inc., a Delaware corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, a “Purchaser” and collectively the “Purchasers”).

 

WHEREAS, subject to the
terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

 

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

 

ARTICLE I.

DEFINITIONS

 

1.1       Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:

 

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.

 

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

 

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

 

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

 

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

 

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

 

“Closing”
means the closing of the purchase and sale of the Shares pursuant to Section 2.1.

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Shares, in each case, have been satisfied or waived, but in no event later than
the third Trading Day following the date hereof.

    

     

    

 

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

“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

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

 

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

 

“Company
Counsel” means Robinson Brog Leinwand Greene Genovese & Gluck P.C., with offices located at 875 Third Avenue, 9th
Floor, New York, NY 10022.

 

“DVP”
shall have the meaning ascribed to such term in Section 2.1.

 

“DWAC”
shall have the meaning ascribed to such term in Section 2.2(a)(iii).

 

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

 

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

 

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

 

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

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock, options or other equity-based awards to employees, officers,
directors, consultants or vendors of the Company for services rendered to the Company pursuant to any stock or option plan or agreement
that was duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the
members of a committee of non-employee directors established for such purpose, (b) securities upon the exchange of any Shares issued
hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding
on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than
in connection with stock splits or combinations) or to extend the term of such securities, (c) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance
shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) securities
issued by the Company in connection with an acquisition or strategic transaction, where such issuance and transaction are approved
by the shareholders of the Company prior to such issuance, and (e) securities issued upon the exercise or exchange of or conversion
of any of the Company’s securities issued hereunder and/or other securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the date of this Agreement, and (f) unregistered shares of Common Stock or
Common Stock Equivalents issued in the ordinary course of the Company’s business and prior practices.

    -1- 

     

    

 

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Per
Share Purchase Price” equals $4.00, subject to adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

 

    -2- 

     

    

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

 

“Placement
Agent” means Aegis Capital Corp.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition) pending or, to the Company’s knowledge, threatened in writing, against or affecting the
Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign).

 

“Prospectus”
means the final prospectus filed for the Registration Statement.

 

“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to each Purchaser at the Closing.

 

“Purchaser”
or “Purchasers” shall have the meanings ascribed to such terms in the Preamble.

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.

 

“Registration
Statement” means the effective registration statement with Commission (File No. 333-203637), which registers the sale
of the Shares.

 

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

 

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

 

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

 

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

 

    -3- 

     

    

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

 

“Shares”
means the shares of registered Common Stock issued or issuable to each Purchaser pursuant to this Agreement.

 

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

 

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

 

“Subsidiary”
or “Subsidiaries” means any direct or indirect subsidiary of the Company, and shall, where applicable, also
include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

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

 

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

 

“Transaction
Documents” means this Agreement and any other documents or agreements executed in connection with the transactions contemplated
hereunder.

 

“Transfer
Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette
Place, Woodmere, New York 11598, and a facsimile number of (646) 536-3179, and any
successor transfer agent of the Company.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1       Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, an aggregate of up to $7,000,000 of Shares. Each Purchaser shall deliver to the account designated by the Company,
immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed
by such Purchaser. The Company and each Purchaser shall deliver the items set forth in Section 2.2 at the closing (“Closing”).
Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of
the Placement Agent or such other location as the parties shall mutually agree. Unless otherwise directed by the Placement Agent,
settlement of the Shares pursuant to Section 2.2(a) shall occur via “Delivery Versus Payment” (“DVP”) (i.e.,
on the Closing Date, the Company shall issue the Shares registered in the Purchasers’ names and addresses and released by
the Transfer Agent directly to the account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares,
the Placement Agent shall promptly electronically deliver such Shares to the applicable Purchaser, and payment therefor shall be
made by the Placement Agent (or its clearing firm) by wire transfer to the Company).

    -4- 

     

    

 

2.2       Deliveries.

 

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

 

(i)       this
Agreement duly executed by the Company;

 

(ii)       a
legal opinion of Company Counsel and intellectual property counsel to the Company, substantially in the form agreed to prior to
the Closing Date;

 

(iii)       if
settlement of the Shares is not occurring via DVP in accordance with the last sentence of Section 2.1, a copy of the irrevocable
instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company
(the “DTC”) Deposit and Withdrawal at Custodian system (“DWAC”) Shares equal to such Purchaser’s
Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser;

 

(iv)       the
Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act);

 

(v)        a
comfort letter in form and substance reasonably satisfactory to the Placement Agent and the Purchasers; and

 

(vi)        a
closing certificate in form and substance reasonably satisfactory to the Placement Agent and the Purchasers.

 

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

 

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

 

(ii)       such
Purchaser’s Subscription Amount, which shall be made available for DVP settlement with the Company.

 

    -5- 

     

    

2.3       Closing
Conditions.

 

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

 

(i)       the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as
of a specific date therein in which case they shall be accurate as of such date);

 

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

 

(iii)        the
delivery by each Purchaser of the items set forth in Section 2.2(b); and

 

(iv)       if
the settlement of the Shares is occurring via DVP, the delivery of each Purchaser’s Subscription Amount by the Placement
Agent to the account of the Company.

 

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

 

(i)       the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein
(unless as of a specific date therein, in which case they shall be accurate as of such date);

 

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

 

(iii)       the
delivery by the Company of the items set forth in Section 2.2(a);

 

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

 

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

    -6- 

     

    

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1       Representations
and Warranties of the Company. The Company hereby makes the following representations and warranties to each Purchaser:

 

(a) Subsidiaries.
The Company’s Subsidiaries are disclosed in the SEC Reports.

 

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

 

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

 

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

    -7- 

     

    

 

(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.4; (ii) the filing with the Commission of the Prospectus Supplement; (iii) the filing
and approval of the application(s) to each applicable Trading Market for the listing of the Shares for trading thereon in the time
and manner required thereby; and (iv) such filings as are required to be made under applicable state securities laws (collectively,
the “Required Approvals”).

 

(f) Issuance
of the Shares; Registration. The Shares are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company,
other than any restrictions on transfer provided in the Transaction Documents. The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement. The Company has prepared and filed
the Registration Statement in conformity with the requirements of the Securities Act, which became effective on May 14, 2015 (the
“Effective Date”), including the Prospectus, and such amendments and supplements thereto as may have been required
to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing or
suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued
by the Commission and no Proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened
by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus Supplement
with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective,
at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will
conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein
not misleading; and the Prospectus and any amendments or supplements thereto filed in connection with, or relating to, the transactions
contemplated by this Agreement, at the time the Prospectus or any such amendment or supplement thereto was issued and at the Closing
Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain
an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.

 

(g) Capitalization.
The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plans, pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the
most recently filed periodic report under the Exchange Act and the issuance of restricted stock to a vendor for services rendered
to the Company. As of the date hereof, all Series A preferred stock and Series B preferred stock of the Company have been converted
into Common Stock and as such, there are no Series A preferred stock or Series B preferred stock outstanding. Except as disclosed
in the SEC Reports, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Shares,
as disclosed in the SEC Reports and in respect of equity-based awards pursuant to equity incentive plans disclosed in the SEC Reports,
there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common
Stock Equivalents or capital stock of any Subsidiary. Except as disclosed in the SEC Reports, the issuance and sale of the Shares
will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the
Purchasers and the Placement Agent) and will not result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities. There are no outstanding securities or instruments of the Company
or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary.
The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in compliance with all applicable 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. 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.

    -8- 

     

    

 

(h) SEC Reports;
Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed
by the Company under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date
hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein, together with the Registration Statement, the Prospectus
and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis
or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Exchange
Act. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

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

 

(j) Litigation.
Except as set forth in the SEC Reports, there is no Proceeding that (i) adversely affects or challenges the legality, validity
or enforceability of any of the Transaction Documents or the Shares or (ii) could, if there were an unfavorable decision, have
or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or has been the subject of any Proceeding involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or
any Subsidiary under the Exchange Act or the Securities Act.

    -9- 

     

    

 

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

 

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

 

(m) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all applicable federal, state, local and foreign laws relating
to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface
or subsurface strata), including 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 (“Environmental
Laws”); (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals
or failure to comply with the terms and conditions of such permits, licenses or approvals would not, individually or in the aggregate,
have a Material Adverse Effect.

 

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

    -10- 

     

    

 

(o) Title
to Assets. Except as set forth in the SEC Reports, the Company and the Subsidiaries do not own any real property. The Company
and the Subsidiaries have good title in all personal property owned by them that is material to the business of the Company and
the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries
and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance
with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company
and the Subsidiaries are in compliance, except where failure to be in compliance would not reasonably be expected to have a Material
Adverse Effect.

 

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

 

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

 

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

    -11- 

     

    

 

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

 

(t) Certain
Fees. Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be payable
by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank
or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in
this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

 

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

 

(v) Registration
Rights. Except as set forth in the SEC Reports, no Person has any right to cause the Company or any Subsidiary to effect the
registration under the Securities Act of any securities of the Company or any Subsidiary.

 

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

 

    -12- 

     

    

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

 

(y) Disclosure.
The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in
securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company
and its Subsidiaries, their respective businesses and the transactions contemplated hereby, is true and correct and does not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof.

 

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

 

(aa) Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Shares hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry
on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Except as set forth in the
SEC Reports, as of the date hereof, there is no outstanding secured or unsecured Indebtedness of the Company or any Subsidiary,
or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course
of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

    -13- 

     

    

 

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

 

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

 

(dd) Accountants.
The Company’s independent registered public accounting firm is Marcum, LLP. To the knowledge and belief of the Company, such
accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with
respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31,
2017.

 

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

 

(ff) Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers
has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Shares
for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently
may have a “short” position in the Common Stock, and (iv) each Purchaser shall not be deemed to have any affiliation
with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands
and acknowledges that (y) one or more Purchasers may engage in hedging activities (subject to compliance with applicable laws)
at various times during the period that the Shares are outstanding, and (z) such hedging activities (if any) could reduce the value
of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being
conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction
Documents.

    -14- 

     

    

 

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

 

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

 

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

 

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

 

(kk) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and there is no Proceeding with respect to the Money Laundering Laws.

 

(ll)Intentionally
Omitted.

 

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

 

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

    -15- 

     

    

 

(b) Understandings
or Arrangements. Such Purchaser is acquiring the Shares as principal for its own account and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the distribution of such Shares (this representation and warranty
not limiting such Purchaser’s right to sell the Shares pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws). Such Purchaser is acquiring the Shares hereunder in the ordinary course of
its business.

 

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

 

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

 

(e) Access to
Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all
exhibits and schedules thereto) and the SEC Reports and has been afforded: (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering
of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial
condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment;
and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges
and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information
or advice with respect to the Shares nor is such information or advice necessary or desired. Neither the Placement Agent nor any
Affiliate has made or makes any representation as to the Company or the quality of the Shares and the Placement Agent and any Affiliate
may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it. In
connection with the issuance of the Shares to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as
a financial advisor or fiduciary to such Purchaser.

 

(f) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any
purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth
the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Shares covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives,
including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such
Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence
and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute
a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement to borrow,
identification of the availability of, and/or securing of, securities of the Company in order for such Purchaser (or its broker
or other financial representative) to effect Short Sales or similar transactions in the future.

    -16- 

     

    

 

(g) Ownership.
Assuming the truthfulness of the representations and warranties of the Company hereunder, the sale of the Shares to such Purchaser
under this Agreement will not result in such Purchaser beneficially owning greater than 9.99% of the total issued and outstanding
Common Stock.

 

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

 

(i) Consent
to Transactions. Such Purchaser consents to the issuance of all Shares issued hereunder. For the avoidance of doubt, such Purchaser
agrees that it waives any and all rights of participation, rights of first refusal, consent to the Transactions contemplated hereunder,
and any other similar rights, as set forth in any and all prior agreements, contracts, securities, and/or documents between such
Purchaser and the Company. Notwithstanding the foregoing, such Purchaser only waives its rights of participation contained in all
prior agreements, contracts, and/or documents between such Purchaser and the Company solely for the purposes of the Transactions
contemplated hereunder (i.e., a one-time waiver).

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1       Intentionally
Omitted.

 

4.2       Intentionally
Omitted.

 

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

 

4.4       Securities
Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m. (New York City time) on the Trading Day immediately following
the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) within the
time required by Commission rules, file a Current Report on Form 8-K with the Commission, including the Transaction Documents as
exhibits thereto. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have
publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries,
or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries
or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any
of their Affiliates on the other hand, shall terminate. Notwithstanding the foregoing, the Company shall not publicly disclose
the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with
the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under
this clause (b).

    -17- 

     

    

 

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

 

4.6       Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting
on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably
believes constitutes material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of
such information and agreed with the Company to keep such information confidential. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that
the Company delivers any material, non-public information to a Purchaser after the date hereof without such Purchaser’s consent,
the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its
Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of
its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of,
such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any
future notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding
the Company or any Subsidiaries, the Company shall simultaneously file such material, non-public information with the Commission
pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.

 

4.7       Use
of Proceeds. The Company shall use the net proceeds from the sale of the Shares hereunder as described in the Prospectus Supplement
and shall not use such proceeds in violation of FCPA or OFAC regulations.

 

4.8       Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and reasonable costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to (a) any material breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other Transaction Documents (or, to the extent such representations,
warranties, covenants or agreements are qualified by materiality or Material Adverse Effect, any breach of the same) or (b) any
action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder
of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction
Documents. If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this
Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized
by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel
or (iii) in such action there is, in the reasonable opinion of counsel (which opinion is furnished to the Company), a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not
be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a
loss, claim, damage or liability is solely attributable to (A) any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents or (B)
any violations by such Purchaser of federal securities laws or any conduct by such Purchaser which constitutes fraud, gross negligence,
willful misconduct or malfeasance. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others
and any liabilities the Company may be subject to pursuant to law.

 

    -18- 

     

    

4.9       Reservation
of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company
to issue Shares pursuant to this Agreement.

 

4.10       Listing
of Common Stock. The Company hereby agrees to use commercially reasonable efforts to maintain the listing or quotation of the
Common Stock on the Trading Market on which it is currently listed, and the Company shall apply to list or quote all of the Shares
on such Trading Market and promptly secure the listing of all of the Shares on such Trading Market. The Company further agrees,
if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application all
of the Shares and will take such other action as is necessary to cause all of the Shares to be listed or quoted on such other Trading
Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading
of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Trading Market. For so long as the Company maintains a listing or quotation of the Common Stock
on a Trading Market, it agrees to maintain the eligibility of the Common Stock for electronic transfer through the DTC or another
established clearing corporation, including, without limitation, by timely payment of fees to the DTC or such other established
clearing corporation in connection with such electronic transfer.

 

4.11       Intentionally
Omitted.

 

4.12       Intentionally
Omitted.

4.13       Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration
is also offered to all of the parties to this Agreement. For clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat
the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect
to the purchase, disposition or voting of Shares or otherwise.

 

4.14       Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither
it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including
Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending
at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time
as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release
as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction. Notwithstanding
the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting
any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in
Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company
to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only
apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the
Shares covered by this Agreement.

 

4.15       Intentionally
Omitted.

 

4.16       Shareholder
Approval. In the event that the transactions contemplated in the Transaction Documents are deemed to be subject to approval
of the Company’s shareholders, the Company shall use commercially reasonable efforts to include a proposal to approval the
transactions contemplated in the Transaction Documents in the next annual or special meeting of the Company’s shareholders,
provided, however, that such meeting shall be held within 180 days following Closing.

    -19- 

     

    

 

ARTICLE V.

MISCELLANEOUS

 

5.1       Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing
has not been consummated on or before December 29, 2017; provided, however, that no such termination will affect
the right of any party to sue for any breach by any other party (or parties).

 

5.2       Fees
and Expenses. Except as expressly set forth in the Prospectus Supplement and the Transaction Documents to the contrary, each
party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall
pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter
delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection
with the delivery of any Shares to the Purchasers.

 

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

 

5.4       Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile or email attachment at the facsimile number or email address as set forth on the signature pages attached hereto
at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile or email attachment at the facsimile number or email address as set forth on
the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service
or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction
Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall
simultaneously file such notice with the Commission on a Current Report on Form 8-K.

 

5.5       Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and holders of at least a majority of the aggregate amount of Shares issued hereunder
that are then held by Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waived provision
is sought; provided, that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser
(or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required.
No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser
relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely
affected Purchaser. Any amendment effected in accordance with accordance with this Section 5.5 shall be binding upon each Purchaser
and holder of Shares and the Company.

 

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

    -20- 

     

    

 

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

 

5.8       No
Third-Party Beneficiaries. The Placement Agent shall be the third-party beneficiary of the representations and warranties of
the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended
for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8. 

5.9       Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence
a suit, action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the
Company under Section 4.8, the prevailing party in such suit, action or proceeding shall be reimbursed by the non-prevailing party
for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such suit, action or proceeding.

 

5.10       Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Shares for a period of no
longer than three years from the Closing.

 

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

    -21- 

     

    

 

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

 

5.13       Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser
may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company and within five (5) Business
Days, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

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

 

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

 

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

    -22- 

     

    

 

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

 

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

 

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

 

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

 

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

 

(Signature Pages Follow)

 

    -23- 

     

    

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

 

	NXT-ID, INC.	 	Address for Notice:
	 	 	285 North Drive
	 	 	Suite D
	 	 	Melbourne, FL 32904
	By:	 	 	 	 
	 	Name: Gino M. Pereira	 	 
	 	Title: Chief Executive Officer	 	 
	 	 	 	 
	With a copy to (which shall not constitute notice):	 	 
	 	Robinson Brog Leinwand Greene Genovese & Gluck P.C.	 	 
	 	875 Third Avenue	 	 
	 	9th Floor	 	 
	 	New York, NY 10022	 	 
	 	Telephone: (212) 603-6300	 	 
	 	Facsimile: (212) 956-2164	 	 
	 	Attention: David E. Danovitch, Esq.	 	 

 

 [REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

    -24- 

     

    

 

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

 

	Name of Purchaser:	 	 

 

	Signature of Authorized Signatory of Purchaser:	 	 

 

	Name of Authorized Signatory:	 	 

 

	Title of Authorized Signatory:	 	 

 

	Email Address of Authorized Signatory:	 	 

 

	Facsimile Number of Authorized Signatory:	 	 

 

Address for Notice to Purchaser:

 

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

 

	Subscription Amount:	$	 	 

 

	Shares:	 	 

 

	EIN Number:	 	 

 

 

 

 

[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE
AGREEMENT]

    -26-

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