The authorized capital stock of the Company as of the date of this Agreement consists of 3,500,000 shares of Common Stock, of which, as of December 15, 2016, 2,484,211 shares were issued and outstanding, 140,000 shares of Series A Preferred Stock, par value $0.01 per share, of which 105,303 shares were issued and outstanding as of September 30, 2016, and 360,000 shares of Series B Preferred Stock, of which 244,263 shares were issued and outstanding as of December 31, 2016 . All of the issued and outstanding shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and nonassessable, except as may be provided by Section 630 of the New York Business Corporation Law, and are free from preemptive rights.

Capitalization. As of the date hereof, the authorized capital stock of the Company, and number of shares issued and outstanding, is as set forth in the Company’s most recent periodic report filed with the SEC. Except as disclosed on [Schedule 3(c)] hereof, no shares are reserved for issuance pursuant to the Company’s stock option plans. Except as disclosed in the SEC Documents no shares are reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for shares of Common Stock. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, and except as disclosed in the SEC Documents, # there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities, notes or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, # there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and # there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of any of the Securities. The Company has furnished to the Purchaser true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto.

“Common Stock” means # the Company’s shares of common stock, $0.001 par value per share, and # any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

Market Capitalization. The Borrower fails to maintain a market capitalization of at least $500,000 on any Trading Day, which shall be calculated by multiplying # the closing price of the Borrower’s common stock on the Trading Day immediately preceding the respective date of calculation by # the total shares of the Borrower’s common stock issued and outstanding on the Trading Day immediately preceding the respective date of calculation.

Equity Capitalization. Except as disclosed in the SEC Documents: # none of [[Organization B:Organization]]’s or any Subsidiary’s capital stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by [[Organization B:Organization]] or any Subsidiary; # there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of [[Organization B:Organization]] or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which [[Organization B:Organization]] or any of its Subsidiaries is or may become bound to issue additional capital stock of [[Organization B:Organization]] or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of [[Organization B:Organization]] or any of its Subsidiaries, other than future potential issuances of additional shares of Common Stock to Sichenzia Ross Ference Kesner LLP for any future financings by [[Organization B:Organization]] at a price per share less than $0.50, and the potential issuance to a certain lead investor in [[Organization B:Organization]]’s prior financings of additional shares of common stock or convertible preferred stock to obtain the consent of the lead investor to future financings below $2.25 per share, with such issuance obligations to cease when the investor no longer owns any Series L Preferred Shares; # there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing indebtedness of [[Organization B:Organization]] or any of its Subsidiaries or by which [[Organization B:Organization]] or any of its Subsidiaries is or may become bound, other than that certain loan and security agreement with Oxford Finance LLC dated January 15, 2016, and equipment leases and equipment financing in the ordinary course of business; # there are no financing statements securing obligations in any amounts filed in connection with [[Organization B:Organization]] or any of its Subsidiaries; # there are no agreements or arrangements under which [[Organization B:Organization]] or any of its Subsidiaries is obligated to register the sale of any of their securities under the Securities Act other than various prior issuances of securities that have not been previously registered; # there are no outstanding securities or instruments of [[Organization B:Organization]] or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which [[Organization B:Organization]] or any of its Subsidiaries is or may become bound to redeem a security of [[Organization B:Organization]] or any of its Subsidiaries; # there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; # neither [[Organization B:Organization]] nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and # neither [[Organization B:Organization]] nor any of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents, other than those incurred in the ordinary course of [[Organization B:Organization]]’s or its Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or could not have a Material Adverse Effect. [[Organization B:Organization]] has furnished to [[Organization A:Organization]] true, correct and complete copies of [[Organization B:Organization]]’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and [[Organization B:Organization]]’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all securities convertible into, or exercisable or exchangeable for, shares of Common Stock and the material rights of the holders thereof in respect thereto that have not been disclosed in the SEC Documents.

Company Capitalization. The Company has an authorized capitalization as set forth in the Registration Statement, the Prospectus and the Prospectus Supplement, and all of the issued shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and non-assessable, have been issued in all material respects in compliance with United States federal and state securities laws, and conform to the description thereof contained in the Registration Statement, the Prospectus and the Prospectus Supplement. All of the Company’s options and warrants have been duly authorized and validly issued and were issued in all material respects in compliance with United States federal and state securities laws. None of the outstanding shares of Common Stock was issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding shares of capital stock, options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any Subsidiary other than those described above or accurately described in the Registration

Subsidiary Capitalization. All the outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued, are fully paid and non-assessable and, except to the extent set forth in the Registration Statement, the Prospectus and the Prospectus Supplement, are owned by the Company directly or indirectly through one or more wholly-owned Subsidiaries, free and clear of any claim, lien, encumbrance, security interest, restriction upon voting or transfer or any other claim of any third party.

In the event of a change in capitalization, the Committee shall make appropriate adjustments in accordance with [Section 4.3] of the Plan to reflect the change in capitalization, provided that any such additional Shares or additional or different shares or securities reflected in any such adjustment shall remain subject to the restrictions in this Agreement.

Section # Termination, Suspension or Modification of Plan. Provided no employee member of the Board participates as provided by Section 3.2(b) hereof, the Board may at any time terminate, suspend or modify this Plan, except that the Board shall not, without the authorization of the holders of a majority of the outstanding shares present or represented and entitled to vote at a duly held meeting of the Company’s shareholders, effect any change (other than through adjustment for changes in capitalization as hereinabove provided) which # increases the aggregate number of Shares underlying Grants; # changes the class of Eligible Grantees eligible to be awarded Grants; # lowers the minimum Option Price or Base Amount or otherwise materially increases the benefits accruing to Grantees through Grants under this Plan; # renders any member of the Committee eligible to receive a Grant while serving thereon except as provided by this Plan; # extends the effective period of this Plan; or # removes the restrictions set forth in Section 3.2(b). No termination, suspension or modification of this Plan shall adversely affect any right acquired by any Grantee or any Successor under the terms of a Grant awarded before the date of such termination, suspension or modification, unless such Grantee or Successor shall consent; but it shall be conclusively presumed that any adjustment for changes in capitalization as provided in Section 5.3 does not adversely affect any such right.

"Share Pool" means the number of shares authorized for issuance under paragraph 4.1, as adjusted for awards and payouts under paragraph 4.2 and as adjusted for changes in corporate capitalization under paragraph 4.3.