Document:

EMPLOYMENT
AGREEMENT

 

This
EMPLOYMENT AGREEMENT is effective as of the 30th day of August 2017 by and between Wayne Harding, an individual (“Employee”),
and Two Rivers Water & Farming Company, a Colorado corporation (the “Company”).

 

WHEREAS,
Employee has been employed by the Company as CFO under an Employment Agreement dated January 1, 2011; and

 

WHEREAS,
On June 13, 2016 Employee was made CEO of the Company and elected to the Company’s Board of Directors (the “Board”);
and

 

WHEREAS,
Board has determined that it is in the best interests of the Company and its stockholders to enter into a new Employment Agreement
(the “Agreement”) with Employee setting forth the rights, obligations and duties of both the Company and the Employee;
and

 

WHEREAS,
the Company wishes to assure itself of the services of the Employee for the period hereinafter provided, and the Employee is willing
to be employed by the Company for said period, upon the terms and conditions provided in this Agreement.

 

IN
CONSIDERATION of the mutual covenants and promises herein contained, and subject to the terms and conditions herein set forth,
Employee and the Company hereby agree as follows:

 

1.
Term of Employment; Duties.

 

(a)
The “Term of Employment” shall commence on the effective date of this Agreement and shall continue for an initial
term of one (1) year unless earlier terminated as provided in this Agreement (the “Initial Term”). After the
Initial Term, the Term of Employment will automatically renew for successive one (1) year terms unless and until either party
delivers notice of termination to the other within thirty (30) days of the expirations of the then current term.

 

(b)
During the Term of Employment, the Company shall employ Employee, and Employee shall work for the Company as Chief Executive Officer.
In such capacity, Employee shall perform such duties as are traditional and customary to that position and as may be reasonably
directed by the Board.

 

(c)
During the Term of Employment, except as set forth below, Employee shall devote full time and effort to carrying out Employee’s
duties for the Company hereunder, shall not engage in any activity which would be inconsistent with such duties or with the objectives
of the Business (as defined below), and shall diligently perform Employee’s obligations and discharge Employee’s duties
hereunder; provided, however, nothing in this Paragraph shall prevent Employee from devoting time to managing investments,
family businesses, participating with charitable organizations and trade groups or other similar activities. The “Business”
of the Company is to investigate, acquire, and manage business opportunities for the Company.

 

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2.
Compensation. During the Term of Employment, the following compensation and benefits shall be payable and provided to Employee:

 

(a)
Employee shall receive from the Company an annual base salary of $150,000.00 (“Base Salary”), which shall be
payable in accordance with the standard practice of the Company in the payment of salaries of its employees.

 

No
less frequently than annually, the Base Salary and other compensation of Employee will be reviewed and may be adjusted upward
at the discretion of the Board.

 

(b)
The Company shall provide Employee with such medical, hospitalization, insurance, including but not limited to disability insurance,
pension plan, profit sharing and employee benefits and such other similar employment privileges and benefits (“Benefits”)
as are afforded generally from time to time to other executive employees of the Company, and paid vacation each year in accordance
to the Company’s policy and Employee Handbook.

 

(c)
At the sole discretion of the Board, Employee shall receive in addition to his Base Salary annual incentive compensation (an “Annual
Bonus”) in an amount and in a form to be determined by the Board.

 

(d)
Employee shall be entitled to receive prompt reimbursement for all pre- approved reasonable employment-related expenses incurred
by Employee, upon the receipt by the Company of an accounting in accordance with the practices, policies and procedures applicable
to other executive employees of the Company.

 

3.
Early Termination: Death. Notwithstanding anything to the contrary in Paragraph 1 hereof, if Employee dies during the Term
of Employment, the Term of Employment shall terminate. Upon such termination, Employee’s estate or beneficiaries shall be
entitled to receive any Base Salary and Benefits earned and accrued but unpaid through the date on which his death occurs. Employee’s
estate shall receive Employee’s Annual Bonus (if any), prorated for the number of months during the fiscal year during which
Employee was paid his Base Salary (“Prorated Annual Bonus”). The Prorated Annual Bonus shall be calculated
and paid in the ordinary course after completion of the fiscal year. In addition, Employee’s family (“Family”)
shall continue to receive health insurance coverage (“Family Health Insurance”) during such one (1) year period,
to the extent permitted by the Company’s health plan contract(s), or if not permitted, as purchased by the Company at no
cost to the Family. The parties shall have no further obligation under this Agreement.

 

4. Early
Termination: Disability. Notwithstanding anything to the contrary in Paragraph 1 hereof, if Employee has at any time been
unable, by virtue of illness or other physical or mental disability, to perform substantially and continuously the
duties assigned to Employee under this Agreement for a period of ninety (90) consecutive days or one hundred twenty (120)
calendar days out of any period of one hundred eighty (180) consecutive calendar days during the Term of Employment and the
Board has received a medical opinion from a physician reasonably acceptable to both the Company and the Employee that
Employee remains disabled after said period (“Disability”), then the Company shall have the right to
terminate the Term of Employment upon notice to Employee. Upon such termination, Employee shall be entitled to receive any
Base Salary and Benefits earned and accrued but unpaid through the date of termination, including, without limitation, the
additional disability insurance described in Paragraph 2(b) hereof. In addition, the Employee shall have the right to receive
a Prorated Annual Bonus to the date of termination. Employee and Family shall continue to receive health insurance coverage
during a six month period following the date of termination, to the extent permitted by the Company’s health plan
contract(s), or if not permitted, as purchased by the Company at no cost to the Family. The parties shall have no further
obligation under this Agreement except that Employee shall not be relieved of Employee’s obligations under Paragraph
8.

 

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5.
Early Termination: Termination by the Company for Cause. Notwithstanding anything to the contrary in Paragraph 1 hereof,
the Term of Employment may be terminated by the Company upon notice to Employee for “Cause.” The term “Cause”
shall mean Employee’s: (a) unsatisfactory job performance as determined by a seventy five percent (75%) or greater vote
of the Board (excluding the vote of Employee) and the Employee’s performance is not corrected to the satisfaction of the
Board within 30 calendar days; (b) a final, unappealable conviction of a felony involving fraud, dishonesty or moral turpitude;
(c) willful or intentional violation of Paragraph 8 of this Agreement which breach is not cured within thirty (30) days after
Employee’s receipt of written notice from the Company; (d) willful or intentional material breach of this Agreement which
breach is not cured within thirty (30) days after Employee’s receipt of written notice from the Company. Upon such termination,
Employee shall be entitled to receive any Base Salary and Benefits earned and accrued but unpaid through the date of termination
and a Prorated Annual Bonus to the date of termination. The parties shall have no further obligation under this Agreement except
that Employee shall not be relieved of Employee’s obligations under Paragraph 8.

 

6.
Early Termination: Termination by the Company without Cause. Early termination by the Company without Cause includes any
termination instituted by the Company not covered in Section 5. In the event that the Term of Employment is terminated by the
Company without Cause, Employee shall be entitled to receive: (a) any Base Salary and Benefits earned and accrued but unpaid through
the date of termination; (b) a lump sum cash payment (or twelve monthly payments based on the Company’s financial status
as determined by the Board), net of any applicable withholding taxes, in an amount equal to twelve month’s salary at the
highest base salary in effect during the twelve months prior to termination plus the Annual Bonus paid to Employee for the last
fiscal year prior to termination prorated to the date of termination; (c) continuation of Benefits to the extent allowed under
the Company’s plans for twelve months from the date of termination; and (d) notwithstanding any provision to the contrary
in any plan or agreement relating to stock options for shares of the Company, immediate vesting of all of Employee’s non-vested
options for shares of the Company’s capital stock (“Accelerated Option Vesting”) (collectively, the “Severance
Payments”). In the event the Company cannot, pursuant to any of its benefits plans, pay any Benefits under such plan,
Employee shall be entitled to a lump sum payment equal to the after-tax value of such Benefits. The parties shall have no further
obligation under this Agreement. Employee acknowledges and agrees that payment of Severance Payments pursuant to this Agreement
shall be conditioned upon the Company’s receipt of a release, in form satisfactory to the Company, of all claims that Employee
may have against the Company, its directors, officers, employees and/or agents and the Employee’s satisfaction of the requirements
of Paragraph 8 below.

 

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7.
Early Termination: Resignation by the Employee.

 

(a)
For Good Reason.

 

(i)
Notwithstanding anything to the contrary in Paragraph 1 hereof, the Term of Employment may be terminated by Employee upon notice
to the Company for “Good Reason.” For purposes of this Agreement, “Good Reason” includes the occurrence
of any of the following circumstances, without Employee’s express consent: (i) a material adverse change or material diminution
in Employee’s position, duties, reporting relationships or responsibilities (as reasonably determined by Employee in his
good faith discretion); (ii) a change in the required location of the performance of Employee’s duties (outside the greater
Denver metropolitan area); (iii) a reduction in either Employee’s annual rate of Base Salary or level of participation in
any non-discretionary bonus plan for which he is eligible under Paragraph 2(c); (iv) an elimination or reduction of Employee’s
participation in any benefit plan generally available to executive employees of the Company, unless the Company continues to offer
Employee benefits substantially similar to those made available by such plan; (v) the election or appointment of 50% or more new
members of the Company’s board, or (vi) a breach of this Agreement by the Company which is not cured within sixty (60) days
of written notice to the Company. Employee’s continued employment will not constitute consent to, or a waiver of rights
with respect to, any circumstance constituting Good Reason; provided, however, that Employee will be deemed to have waived his
rights pursuant to the circumstances constituting Good Reason set forth in clauses (i) through (v) of the preceding sentence if
he has not provided to the Company a notice of termination (described below) within ninety (90) days following his knowledge of
the circumstances constituting Good Reason.

 

(ii)
Upon such termination for Good Reason, Employee shall be entitled to receive the Severance Payments as described in Paragraph
6 of this Agreement. In the event the Company cannot, pursuant to any of its benefits plans, pay any Benefits under such plan,
Employee shall be entitled to a lump sum payment equal to the after-tax value of such benefits. The parties shall have no further
obligation under this Agreement except that Employee shall not be relieved of Employee’s obligations under Paragraph 8.

 

(iii)
Any termination of Employee’s employment by Employee must be communicated by written notice of termination to the Company
in accordance with Paragraph 20 which notice must set forth in reasonable detail the facts and circumstances claimed to provide
a basis for termination of Employee’s employment under this Paragraph 7.

 

(b)
Other than for Good Reason. In the event that the Term of Employment is terminated by Employee other than as set forth in Paragraph
7(a) above, Employee shall be entitled to receive any Base Salary and Benefits earned and accrued but unpaid through the date
of termination. The parties shall have no further obligation under this Agreement except that Employee shall not be relieved of
Employee’s obligations under Paragraph 8.

 

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8.
Confidentiality and Non-Competition.

 

(a)
Employee acknowledges that Employee has had or shall have unlimited access to Confidential Information (as defined below) and
business methods relating to the Company’s Business and operations and that the Company would be injured and the goodwill
of the Company would be damaged if Employee were to breach the covenants set forth in this Paragraph 8. Employee further acknowledges
that the covenants set forth in this Paragraph 8 are reasonable in scope and duration. “Confidential Information”
shall include, without limitation: (i) specific business strategies relating to the Company’s Business, as its Business
is being conducted at the time of any alleged breach of this Paragraph 8; (ii) methodologies of pricing used by the Business;
(iii) customer lists; and (iv) all other information reasonably deemed by the Company to be confidential and/or proprietary in
nature that Employee knows, or should reasonably know, is confidential and/or proprietary.

 

(b)
During the Term of Employment and thereafter, except as may be required by law or necessary in connection with any dealings with
any public agency or authority, Employee shall not disclose, disseminate, divulge, discuss, copy or otherwise use or suffer to
be used, in competition with, or in a manner harmful to the interests of, the Company, any written Confidential Information respecting
any material aspect of the Company’s Business, excepting only use of such data or information as is: (i) at the time disclosed,
through no act or failure to act on the part of Employee, generally known or available to the public; (ii) furnished to Employee
by a third party as a matter of right and without restriction on disclosure; or (iii) required to be disclosed by court order.
Upon termination of the Term of Employment, Employee shall return to the Company or, at the Company’s direction, destroy,
any and all materials in tangible or electronic form containing Confidential Information belonging to the Company.

 

(c)
During the Term of Employment and for a period of one (1) year thereafter (except in the event this Agreement is terminated by
the Company pursuant to Paragraph 6 or this Agreement is terminated by the Employee pursuant to Paragraph 7(a) and Employee has
waived his right to collect the Severance Payments), Employee shall not in North America, or in any international market in which
the Company is, as of the date of termination, doing business, directly or indirectly, whether as an individual on Employee’s
own account, or as a shareholder, partner, joint venturer, director, officer, employee, consultant, creditor and/or agent, of
any person, firm or organization or otherwise:

 

(i)
own, manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated
or associated as a consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship, firm,
association or other business entity or otherwise engage in any business that is engaged in, or otherwise directly competes with,
the Business of the Company or any of the Company’s Subsidiaries (as defined herein), as such Business is conducted on the
date Employee ceases to be employed by the Company, in any capacity, including as a consultant;

 

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(ii)
solicit any person who, at the time of termination, is an employee or officer of the Company or any Subsidiary, or a customer
of the Business of the Company or any Subsidiary (in its capacity as a customer of the Business) to terminate his, her or its
relationship with the Company or the Business (in the case of a customer);

 

(iii)
solicit any supplier of the Company or any Subsidiary (in its capacity as a supplier of the Business), to refuse to do business
with the Company or any Subsidiary, or to do business on any less favorable terms than the Supplier’s previous terms with
the Company or its Subsidiary, as the case may be; or

 

(iv)
engage in disparagement (which shall not include the providing of accurate information without invidious intent) of the Company
or any Subsidiary by any means to any person.

 

(d)
The Company will not engage in disparagement of the Employee at any time during employment or after employment.

 

9.
Change in Control.

 

(a)
If there is a Change in Control (as defined below), Employee shall be entitled to Accelerated Option Vesting.

 

(b)
For purposes of this Agreement, a “Change in Control” will occur: (i) upon the sale or other disposition to
a person, entity or group (as defined for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended) (each,
a “Person”) of 50% or more of the consolidated assets of the Company taken as a whole; (ii) if any Person becomes
the beneficial owner of, or has the right to acquire (by contract, option, warrant, conversion of convertible securities or otherwise),
50% or more of the outstanding equity securities of the Company entitled to vote for the election of directors; and (iii) upon
the merger, consolidation or reorganization with another corporation. Notwithstanding anything herein to the contrary, a “Change
in Control” does not occur upon an initial public offering of the Company’s equity securities pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or upon a transaction, merger, consolidation or reorganization
in which the Company exchanges or offers to exchange newly issued or treasury shares in an amount less than 50% of the then outstanding
equity securities of the Company entitled to vote for the election of directors, for 51% or more of the outstanding equity securities
entitled to vote for the election of at least the majority of the directors of a corporation (the “Acquired Corporation”),
or for all or substantially all of the assets of the Acquired Corporation.

 

(c)
If all or any portion of the amount payable to Employee under this Agreement, either alone or together with other amounts that
Employee is entitled to receive in connection with a Change in Control constitutes “excess parachute payments,” within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), or successor provision,
that are subject to the excise tax imposed by Section 4999 of the Code (or any similar tax or assessment), the amounts payable
to Employee under this Agreement will be increased to the extent necessary to place Employee in the same after-tax position as
Employee would have been in had no such excise tax or assessment (including any interest or penalties thereon) been imposed on
any such payment paid or payable to Employee under this Agreement or any other payment that Employee may receive as a result of
such Change in Control. The determination of the amount of any such tax or assessment and the resulting amount of incremental
payment required by this Paragraph 9(c) will be made by the independent accounting firm employed by the Company immediately prior
to the applicable Change in Control, within thirty (30) calendar days after the payment of the amount payable to Employee under
this Agreement which triggered an incremental payment under this Paragraph 9(c), and such incremental payment will be made within
five (5) business days after the determination has been made.

 

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10.
Rights and Remedies Upon Breach.

 

(a)
Employee expressly agrees and understands that the remedy at law for any breach by Employee of Paragraph 8 may be inadequate and
that the damages flowing from such breach may not be readily susceptible to being measured in monetary terms. Accordingly, it
is acknowledged that upon adequate proof of Employee’s violation of Paragraph 8, the Company may be entitled, among other
remedies, to injunctive relief and may obtain a temporary restraining order restraining any threatened or further breach. Nothing
in this Paragraph 10(a) shall be deemed to limit the Company’s remedies at law or in equity for any breach by Employee of
any of the provisions of this Agreement which may be pursued or availed of by the Company.

 

(b)
In the event any court of competent jurisdiction determines that the specified time period or geographical area set forth in Paragraph
8 is unreasonable, arbitrary or against public policy, then a lesser time period or geographical area that is determined by the
court to be reasonable, non-arbitrary and not against public policy may be enforced.

 

(c)
In the event the Company has asserted in a formal legal action that Employee is violating any legally enforceable provision of
Paragraph 8 as to which there is a specific time period during which Employee is prohibited from taking certain actions or engaging
in certain activities, then, in such event the violation shall toll the running of the time period from the date of the assertion
until the violation ceases.

 

11.
Expenses. Employee is authorized to incur reasonable expenses for carrying out and promoting the business of the Company,
including expenses for entertainment, travel and similar items, but only in accordance with the policies of the Company, as from
time to time adopted.

 

12.
Withholding Taxes. All payments to Employee or his beneficiary shall be subject to withholding on account of federal, state
and local taxes as required by law. If any payment hereunder is insufficient to provide the amount of such taxes required to be
withheld, the Company may withhold such taxes from any other payment due Employee or his beneficiary. In the event all cash payments
due Employee are insufficient to provide the required amount of such withholding taxes, Employee or his beneficiary, within five
(5) days after written notice from the Company, shall pay to the Company the amount of such withholding taxes in excess of all
cash payments due Employee or his beneficiary.

 

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13.
Assignability; Binding Nature. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors, heirs (in the case of Employee) and assigns. No rights or obligations of the Company under this Agreement may be assigned
or transferred by the Company, except in connection with a Change in Control where the assignee or transferee agrees, in writing,
to assume such rights and obligations of the Company under this Agreement. No obligations of Employee under this Agreement may
be assigned or transferred by Employee.

 

14.
Entire Agreement. Except to the extent otherwise provided herein, this Agreement contains the entire understanding and
agreement between the parties concerning the subject matter hereof and supersedes any prior agreements, whether written or oral,
between the parties concerning the subject matter hereof.

 

15.
Amendment or Waiver. No provision in this Agreement may be amended unless such amendment is agreed to in writing and signed
by both Employee and an authorized officer of the Company. No waiver by either party of any breach by the other party of any condition
or provision contained in this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or any prior or subsequent time. Any waiver must be in writing and signed by the Employee or
an authorized officer of the Company, as the case may be.

 

16.
Severability. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable
for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in
full force and effect to the fullest extent permitted by law.

 

17.
Survivorship. The respective rights and obligations of the parties hereunder shall survive any termination of Employee’s
employment with the Company to the extent necessary to the intended preservation of such rights and obligations as described in
this Agreement.

 

18.
Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State
of Colorado, without reference to principles of conflict of laws.

 

19.
Arbitration. With the sole exception of the injunctive relief contemplated by Paragraph 10(a), any controversy or claim
arising out of any aspect of the relationship of the parties hereto, will be settled by binding arbitration in Denver, Colorado
by a panel of three arbitrators in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Judgment
upon any arbitration award may be entered in any court having jurisdiction thereof and the parties consent to the jurisdiction
of the courts of the State of Colorado for this purpose.

 

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20.
Notices. Any notice given to either party shall be in writing and shall be effective when given, and shall in any event
be deemed to be given upon receipt, or if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other applicable
postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one (1) business
day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid or (d) one (1) business
day after the business day of facsimile transmission, if delivered by facsimile transmission with copy by first class mail, postage
prepaid, and shall be duly addressed to the party concerned at the address indicated below or to such changed address as such
party may subsequently give such notice of:

 

If
to the Company, to:

3025
S Parker Road, Suite 140

Aurora
CO 80014

 

If
to Employee, to:

22586
E Weaver Dr.

Aurora
CO 80016

 

21.
Headings. The headings of the Paragraphs contained in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any provision of this Agreement.

 

22.
Counterparts; Facsimile Signatures. This Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together will constitute one and the same instrument. This Agreement may be executed by facsimile
signature and the facsimile signature of any party shall constitute and original in all respects.

 

IN
WITNESS WHEREOF, the parties hereto have executed or caused to be executed this instrument on the date first above written.

 

	By:	/s/
    Wayne Harding	 
	Name:	Wayne
    Harding	 

 

Two
Rivers Water & Farming Company

 

	By:	/s/
    Samuel W. Morris, Jr.	 
	 	Samuel
    W. Morris, Jr. 	 
	 	Chairman
    of the Compensation Committee 	 

 

    	Page
                                         9SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of ____________, 2018, by and between Two
Rivers Water & Farming company, a Colorado corporation, with headquarters located at 3025 S. Parker Road, Ste.
140, Aurora,. CO 80014 (the “Company”), and YANIV EQUITY, LLC, a Delaware limited liability company,
with its address at c/o Lucosky Brookman LLP, 101 Wood Avenue South, 5th Floor, Woodbridge, NJ 08830 (the “Purchaser”).

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell
to the Purchaser, and the Purchaser 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 the Purchaser agree as follows:

 

ARTICLE
I.

DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	 	 

     

    

 

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

 

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

 

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

 

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

 

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

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, consultants or directors
of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of
the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, (b)
securities upon the exercise of or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable
or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided
that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities, (c) shares issued pursuant to any equipment loan or
leasing arrangement, reap property leasing arrangement or debt financing from a bank or similar institution approved by a majority
of the disinterested directors of the Company, (d) securities issued pursuant to acquisitions or strategic transactions approved
by a majority of the disinterested directors of the Company, and (e) shares with respect to which the holders of a majority of
the outstanding Note waive their anti-dilution rights, 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.

 

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

 

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

 

“Grantor
Subsidiary” means TR El Paso Land, LLC, a wholly owned subsidiary of the Company.

 

    	 	2	 

     

    

 

“Holder”
means the holder of the Securities.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.16.

 

“Mortgage”
means that certain Deed of Trust made as of the Closing Date by the Grantor Subsidiary for the benefit of the Purchaser and filed
with respect to the real property located in El Paso County, Colorado.

 

“Note”
means the 12.5% Original Issue Discount Convertible Promissory Note due, subject to the terms therein, 12 months from their date
of issuance, issued by the Company to the Purchaser hereunder, in the form of Exhibit A attached hereto.

 

“Obligations”
means, now existing or in the future, any debt, liability or obligation of any nature whatsoever (including any required performance
of any covenants or agreements), whether secured, unsecured, recourse, nonrecourse, liquidated, unliquidated, accrued, voluntary
or involuntary, direct or indirect, absolute, fixed, contingent, ascertained, unascertained, known, unknown, whether or not jointly
owed with others, whether or not from time to time decreased or extinguished and later decreased, created or incurred, or obligations
existing or incurred under this Agreement, the Note or any other Transaction Documents, or any other agreement between the Company
and the Purchaser, as such obligations may be amended, supplemented, converted, extended or modified from time to time.

 

“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.

 

“Principal
Amount” means $675,000.

 

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

 

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

 

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

 

    	 	3	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

“Securities”
means the Note and the Underlying Shares.

 

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

 

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

 

“Subscription
Amount” means $600,000.

 

“Subsidiary”
means any subsidiary of the Company as set forth on Exhibit 21.01 to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2016.

 

“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 American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

 

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

 

“Transfer
Agent” means Broadridge Financial Solutions, Inc.

 

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

 

    	 	4	 

     

    

 

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

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.12.

 

ARTICLE
II.

PURCHASE
AND SALE

 

2.1
Purchase. The Purchaser shall pay to the Company an aggregate of $600,000 for the Note with an aggregate Principal Amount
of $675,000, to be issued by the Company to the Purchaser.

 

2.2
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchaser agrees to purchase
an aggregate of $600,000 in Subscription Amount in connection with the Principal Amount of the Note. At the Closing, the Purchaser
shall deliver to the Company, via wire transfer or a certified check, immediately available funds equal to the Subscription Amount,
and the Company shall deliver to the Purchaser the Note, and the Company and the Purchaser shall deliver the other items set forth
in Section 2.3 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4
for the Closing, the Closing shall occur at the offices of Lucosky Brookman LLP, located at 101 Wood Avenue South, 5th Floor,
Woodbridge, New Jersey 08830, or such other location as the parties shall mutually agree.

 

2.3
Deliveries.

 

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

 

(i)
this Agreement, duly executed by the Company;

 

(ii)
the Mortgage;

 

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

 

(iv)
the Note registered in the name of the Purchaser, duly executed by the Company; and

 

(v)
a certificate of Secretary of the Company certifying as to the resolutions of the Board of Directors approving the Transaction
Documents and the transactions contemplated thereby.

 

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

 

(i)
this Agreement, duly executed by the Purchaser;

 

(ii)
the Mortgage; and

 

(iii)
the Subscription Amount, by wire transfer to the account specified in writing by the Company.

 

    	 	5	 

     

    

 

2.4
Closing Conditions.

 

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

 

(i)
the accuracy in all material respects on the Closing Date of the representations and warranties of the Purchaser 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 Purchaser required to be performed at or prior to the Closing Date shall have
been performed; and

 

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

 

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

 

(i)
the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein 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 2.3(a) of this Agreement;

 

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

 

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

 

(vi)
from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg
L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are
reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States
or New York State authorities.

 

ARTICLE
III.

REPRESENTATIONS
AND WARRANTIES

 

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

 

(a)
Subsidiaries. The Company does not have any direct or indirect subsidiary other than the Subsidiaries. All of the capital
stock or other equity interests of each Subsidiary owned by the Company, directly or indirectly, is owned free and clear of any
Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

    	 	6	 

     

    

 

(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 or default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

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

 

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

 

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

 

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

 

(g)
Capitalization. As of the date hereof, the authorized capital stock of the Company consists of 200,000,000 shares of Common
Stock, [32,687,221] shares of which are issued and outstanding. The Company has not issued any capital stock since December 31,
2017, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance
of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion
and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange
Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities, there
are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance
and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other
than the Purchaser) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange
or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none
of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale
of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s
stockholders.

 

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

 

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

 

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

 

    	 	9	 

     

    

 

(k)
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or the
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 the Subsidiaries is a party to a collective bargaining agreement, and the Company
and the 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 the Subsidiaries to any liability with respect to any of the foregoing matters. The Company and
the Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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

 

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

 

(n)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company and
the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries,
(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, and (iii) such other Liens as do not, and
could not reasonably be expected to, have a Material Adverse Effect. 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.

 

    	 	10	 

     

    

 

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

 

(p)
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 been notified in writing 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.

 

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

 

    	 	11	 

     

    

 

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

 

(s)
Certain Fees. Other than as set forth in the engagement letter dated November 11, 2016 between the Company and Wellington
Shields & Co. LLC (a true and complete copy has been provided to the Purchaser), 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 Purchaser
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 3.1(s) that may be due in connection with the transactions contemplated by the Transaction
Documents.

 

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

 

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

 

(v)
Registration Rights. With the exception of the registration rights related to the Underlying Shares, no Person has any
right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

 

    	 	12	 

     

    

 

(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.

 

(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 Purchaser as a result of
the Purchaser and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including
without limitation as a result of the Company’s issuance of the Securities and the Purchaser’s ownership of the Securities.

 

(y)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Purchaser or its agents
or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company
understands and confirms that the Purchaser will rely on the foregoing representation in effecting transactions in securities
of the Company. The Company has delivered to the Purchase a completed copy of the Due Diligence Questionnaire in the form provided
by the Purchaser, and the responses of the Company reflected therein are true and complete in all material respects. As of the
date hereof, the representations of the Company in this Section 3.1, collectively with the information set forth in the SEC Reports,
do 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
the Purchaser makes or has made no 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 Purchaser’s representations and warranties set forth in Section
3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would
require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.

 

    	 	13	 

     

    

 

(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 Securities 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. 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.

 

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

 

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

 

(dd)
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.

 

(ee)
Accountants. The Company has engaged M&K CPAS, PLLC to audit its consolidated financial statements as of, and for the
year ended, December 31, 2017. To the knowledge and belief of the Company, such accounting firm is a registered public accounting
firm as required by the Exchange Act.

 

    	 	14	 

     

    

 

(ff)
Seniority. The Note is not, by its terms, subordinated in right of payment, or in its claim upon the assets or earnings
of the Company, to any other Indebtedness of the Company (without giving effect to any security interests granted with respect
to any such Indebtedness).

 

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

 

(hh)
Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Purchaser
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 Purchaser is not acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any
advice given by the Purchaser or any of its representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchaser’s purchase of the Securities. The Company further represents
to the 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.

 

(ii)
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement
or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f), 4.12 and 4.13 hereof), it is understood and acknowledged
by the Company that: (i) the Purchaser has not been asked by the Company to agree, nor has the Purchaser agreed, to desist from
purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or other transactions
by the Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or
after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities, (iii) the Purchaser, and counter-parties in “derivative” transactions to which Purchaser
is a party, directly or indirectly, may presently have a “short” position in the Common Stock and (iv) the 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) the Purchaser may engage in hedging activities at
various times during the period that the Securities are outstanding, including, without limitation, during the periods that the
value of the Underlying Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if
any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the
hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute
a breach of any of the Transaction Documents.

 

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

 

    	 	15	 

     

    

 

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

 

(ll)
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”).

 

(mm)
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.

 

(nn)
Bank Holding Company Act. Neither the Company nor any of the 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 the Subsidiaries or Affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of the 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.

 

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

 

(pp)
Environmental Matters. There are, to the Company’s knowledge, with respect to the Company or any of the Subsidiaries
or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material
into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may
give rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of the Subsidiaries
has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge,
threatened in connection with any of the foregoing. The term “Environmental Laws” means all federal, state,
local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes
(collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans
or regulations issued, entered, promulgated or approved thereunder. Other than those that are or were stored, used or disposed
of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased
or used by the Company or any of the Subsidiaries, and no Hazardous Materials were released on or about any real property previously
owned, leased or used by the Company or any of the Subsidiaries during the period the property was owned, leased or used by the
Company or any of the Subsidiaries, except in the normal course of the Company’s or any of the Subsidiaries’ business.
There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of the Subsidiaries
that are not in compliance with applicable law.

 

    	 	16	 

     

    

 

(qq)
Bad Actor. No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act is
applicable to the Company or, to the Company’s knowledge, any Company Covered Person listed in the first paragraph of Rule
506(d)(1) of the Securities Act, except for any such event as to which Rule 506(d)(2)(ii-iv) or (d)(3) of the Securities Act is
applicable.

 

3.2
Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date hereof and
as of the Closing Date to the Company as follows (unless as of a specific date therein):

 

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

 

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

 

    	 	17	 

     

    

 

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

 

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

 

(e)
General Solicitation. The Purchaser is not purchasing the Securities as a result of any advertisement, article, notice
or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television
or radio or presented at any seminar or any other general solicitation or general advertisement. Neither the Purchaser, nor any
of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the Securities.

 

(f)
Access to Information. The Purchaser and its advisors (and its counsel), if any, have been furnished with all materials
relating to the business, finances and operations of the Company and information it deemed material to making an informed investment
decision. The Purchaser and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management
and have received answers to such questions. Neither such inquiries nor any other due diligence investigations conducted by the
Purchaser or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right to rely on
the Company’s representations and warranties contained in this Agreement. The Purchaser understands that its investment
involves a high degree of risk. The Purchaser has sought such accounting, legal and tax advice, as it has considered necessary
to make an informed investment decision with respect to the transactions contemplated hereby.

 

(g)
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser
has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
the Purchaser first received a term sheet (written or oral) from the Company representing the Company setting forth the material
terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Other than to other Persons
party to this Agreement, the Purchaser has maintained the confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing
contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of
the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the
future.

 

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

 

    	 	18	 

     

    

 

ARTICLE
IV.

OTHER
AGREEMENTS OF THE PARTIES

 

4.1
Registration; Transfer Restrictions.

 

(a)
On the Closing Date, the Company shall file a Registration Statement on Form S-1 (the “Registration Statement”)
for the registration of the resale by the Purchaser of the Underlying Shares under the Securities Act, as shall be permitted to
be included thereon in accordance with applicable Commission rules, regulations and interpretations so as to permit the resale
of the Securities by the Purchaser, including but not limited to under Rule 415 under the Securities Act at then prevailing market
prices (and not fixed prices), as mutually determined by both the Company and the Purchaser in consultation with their respective
legal counsel, subject to the aggregate number of authorized shares of the Company’s Common Stock then available for issuance
in its certificate of incorporation. The initial Registration Statement shall register only 8,000,000 of Underlying Shares. The
Purchaser and its counsel shall have a reasonable opportunity to review and comment upon such Registration Statement and any amendment
or supplement to such Registration Statement and any related prospectus prior to its filing with the Commission, and the Company
shall give due consideration to all reasonable comments. The Purchaser shall furnish all information reasonably requested by the
Company for inclusion therein. The Company shall use its reasonable best efforts to have the Registration Statement and any amendment
declared effective by the SEC at the earliest possible date (in any event, within sixty calendar days after the date of this Agreement).
The Company shall use reasonable best efforts to keep the Registration Statement effective, including but not limited to pursuant
to Rule 415 promulgated under the Securities Act and available for the resale by the Purchaser of all of the Underlying Shares
covered thereby at all times the date on which the Purchaser shall have sold all the Underlying Shares covered thereby. The Registration
Statement (including any amendments or supplements thereto and prospectuses contained therein) shall 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 light of the circumstances in which they were made, not misleading.

 

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

 

(c)
The Purchaser agrees to the imprinting, in the event that the Registration Statement is not effective and so long as is required
by this Section 4.1, of a legend on any of the Securities in the following form:

 

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

 

    	 	19	 

     

    

 

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

 

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

 

    	 	20	 

     

    

 

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

 

4.2
Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the
outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges
that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares
pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay
or reduction, regardless of the effect of any such dilution or any claim the Company may have against the Purchaser and regardless
of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company. In the event of
an issuance of stock involving tranches or other multiple closings, the anti-dilution adjustment shall be calculated as if all
stock was issued at the Closing.

 

4.3
Furnishing of Information; Public Information.

 

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

 

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

 

    	 	21	 

     

    

 

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

 

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

 

4.6
Securities Laws Disclosure; Publicity. The Company shall (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)
file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time
required by the Exchange Act. From and after the issuance of such press release, the Company represents to the Purchaser that
it shall have publicly disclosed all material, non-public information delivered to the Purchaser by the Company or any of the
Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated
by the Transaction Documents. The Company and the Purchaser shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither the Company nor the Purchaser shall issue any such press release
nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of the
Purchaser, or without the prior consent of the Purchaser, with respect to any press release of the Company, which consent shall
not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of the Purchaser, or include the name of the Purchaser in any filing with the Commission
or any regulatory agency or Trading Market, without the prior written consent of the Purchaser, except: (a) as required by federal
securities law in connection with any registration statement and (b) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide the Purchaser with prior notice of such disclosure permitted under
this clause (b).

 

4.7
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other
Person, that the 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 the Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchaser.

 

    	 	22	 

     

    

 

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

 

4.9
Use of Proceeds. The Company shall use the net proceeds of the Note for working capital and other general corporate purposes,
and shall not use such proceeds for the repurchase or redemption of any Common Stock or Common Stock Equivalents or in violation
of FCPA or OFAC regulations.

 

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

 

    	 	23	 

     

    

 

4.11
Reservation and Listing of Securities.

 

(a)
The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents. On a monthly
basis, the Company will adjust the reserve as necessary to make sure that 300% of the Required Minimum is available. However,
at no point should the reserve be adjusted downwards.

 

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

 

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

 

4.12
Subsequent Equity Sales. From the date hereof until such time that the Purchaser no longer holds the Note, the Company
shall not enter into an agreement to effect any issuance by the Company of Common Stock or Common Stock Equivalents (or a combination
of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in
which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for,
or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange
rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock
or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities
at a future determined price. For purposes of clarity, it is understood and agreed that no action taken by the Company in accordance
with the Promissory Note issued by the Company to Black Mountain Equities Inc., as amended and in effect as of the date hereof,
shall not be deemed to constitute a Variable Rate Transaction. In the event the Company or any of its Subsidiaries does not follow
the provisions of this Section 4.12, then the Purchaser shall be entitled to obtain injunctive relief against the Company to preclude
any such issuance, which remedy shall be in addition to any right to collect damages.

 

    	 	24	 

     

    

 

4.13
Certain Transactions and Confidentiality. The Purchaser covenants that neither it, nor any Affiliate acting on its behalf
or pursuant to any understanding with it will (i) execute any 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 4.6 and (ii) execute any Short Sales
of the Common Stock from the date hereof until the earlier of (x) 5 months after the date hereof and (y) the date that the Note
is no longer outstanding (provided that this provision shall not prohibit any sales made where a corresponding Notice of Conversion
or Notice of Exercise is tendered to the Company and the shares received upon such conversion or exercise are used to close out
such sale) (a “Prohibited Short Sale”). The Purchaser 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 4.6, the
Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the
Transaction Documents. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary,
the Company expressly acknowledges and agrees that (i) the Purchaser makes no 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 4.6, (ii) except
for a Prohibited Short Sale, the Purchaser shall not 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 4.6 and (iii) the Purchaser
shall have no duty of confidentiality to the Company or the Subsidiaries after the issuance of the initial press release as described
in Section 4.6.

 

4.14
Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of the Purchaser. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser
at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide
evidence of such actions promptly upon request of the Purchaser.

 

ARTICLE
V.

MISCELLANEOUS

 

5.1
Termination. This Agreement may be terminated by the Purchaser, as to such Purchaser’s obligations hereunder, by
written notice to the Company, if the Closing has not been consummated on or before _____________, 2018; provided, however,
that such termination will not affect the right of any party to sue for any breach by any other party (or parties).

 

5.2
Fees and Expenses. Except as expressly set forth in this Agreement or any other writing 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. Notwithstanding the
foregoing, at the Closing, the Company has agreed to pay the Purchaser the sum of $25,000 for its legal fees, $5,000 of which
was previously paid and $20,000 of which shall be paid at the Closing, plus all out-of-pocket costs of the Purchaser, including,
but not limited to, due diligence costs and expenses, background search costs, filing costs, and local counsel costs. The Company
shall deliver to the Purchaser, prior to the Closing, a completed and executed copy of the Closing Statement, attached hereto
as Annex A. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company and any conversion or exercise notice delivered by the Purchaser),
stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.

 

    	 	25	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	26	 

     

    

 

5.9
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement, the Note or any other agreement, certificate, instrument or document contemplated hereby shall be brought only
in the state courts of New York or in the federal courts located in the Southern District of the State of New York, provided,
however, that the Purchaser may elect to bring an action or proceeding by arbitration in its sole and absolute discretion.
The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder
and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. The prevailing party shall be entitled to recover from the other
party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement
delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute
or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability
of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process
being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document 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.

 

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

 

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

 

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

 

5.13
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar
provisions of) any of the other Transaction Documents, whenever the 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
the Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however,
that in the case of a rescission of a conversion of a Note, the Purchaser shall be required to return any shares of Common Stock
subject to any such rescinded conversion concurrently with the return to Purchaser of the aggregate exercise price paid to the
Company for such shares and the restoration of Purchaser’s right to acquire such shares.

 

    	 	27	 

     

    

 

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

 

5.15
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of
damages, Purchaser 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 the Purchaser pursuant to any Transaction
Document or the Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other
Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

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

 

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.

 

    	 	28	 

     

    

 

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.

 

(Signature
Pages Follow)

 

    	 	29	 

     

    

 

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.

 

TWO
RIVERS WATER & FARMING COMPANY

 

	By:	 	 	Address
    for Notice:
	 	Wayne
    Harding	 	 
	 	Chief
    Executive Officer	 	3025
    S Parker Rd., Ste. 140
	 	 	 	Aurora,
    Colorado 80014
	With
a copy to (which shall not constitute notice):	 	Email:
    WHarding@2riverswater.com
	 	 K&L
Gates LLP

State
Street Financial Center

One
Lincoln Street

Boston,
MA 02111-2950

Attention:
Mark L. Johnson

Email:
mark.johnson@klgates.com

	 	 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

[COMPANY
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

 

    	 	 	 

     

    

 

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.

 

Name
of Purchaser: YANIV EQUITY, LLC

 

	Signature
    of Authorized Signatory of Purchaser:	 	 
	 	 	 
	Name
    of Authorized Signatory:	 	 
	 	 	 
	Title
    of Authorized Signatory:	 	 
	 	 	 
	Email
    Address of Authorized Signatory:	 	 
	 	 	 
	Facsimile
    Number of Authorized Signatory:	 	 
	 	 	 
	Address
    for Notice to Purchaser:	 	 

 

 

 

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

 

 

 

Closing
Subscription Amount: $600,000

Closing
Principal Amount: $675,000

 

	EIN
    Number:	 	 

 

[PURCHASER
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

 

    	 	 	 

     

    

 

Annex
A 

 

CLOSING
STATEMENT

 

Pursuant
to the attached Securities Purchase Agreement, dated as of the date hereof, the Purchaser shall purchase Note from Two Rivers
Water & Farming Company (the “Company”). All funds will be wired into an account maintained by the Company.
All funds will be disbursed in accordance with this Closing Statement.

 

Disbursement
Date:

 

 

 

I.
PURCHASE PRICE

 

	Gross
    Proceeds to be Received	 	$	600,000	 

 

II.
DISBURSEMENTS

 

	Purchaser Legal Fees	 	$	20,000
                                         (pre-paid $5,000)	 
	 	 	$		 
	Purchaser
    Expenses	 	$	7,861	 
	 	 	 	 	 
	Wellington Shields
    & Co., LLC	 	$	42,000	 
	 	 	 	 	 
	Total
    Amount Disbursed:	 	$	530,139	 

 

WIRE
INSTRUCTIONS:

 

	Bank
    Name: 	Account
    Number:
	 	 
	 	Beneficiary:
	Routing
    Number:	 
		Beneficiary
    Address:

 

Duly
executed this _____________, 2018

 

Two
Rivers Water & Farming Company

 

	By:	 	 
	 	Wayne
    Harding	 
	 	Chief
    Executive Officer	 

 

    	 	 	 

     

    

 

Exhibit
A

 

Note

 

    	 	 	 

     

    

 

Exhibit
B

 

Transfer
Agent Instruction Letter

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00279-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00279-of-00352.parquet"}]]