Exhibit 10(t)
SECURITIES PURCHASE AGREEMENT
This Securities
Purchase Agreement (this “Agreement”) is dated as of July [___], 2015, between Dataram Corporation, a New Jersey
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its
successors and permitted assigns, a “Purchaser” and collectively, the “Purchasers”).
PREAMBLE
WHEREAS, subject
to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser,
and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described
in this Agreement (the “Offering”).
NOW, THEREFORE,
IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.18.
“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.
“Buy-In”
shall have the meaning ascribed to such term in Section 4.1(g).
“Closing”
shall have the meaning ascribed to such term in Section 2.1.
“Closing
Date” shall mean such date on which the Closing is held, and is the Trading Day on which all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations
to pay the Subscription Amount at such Closing and (ii) the Company’s obligations to deliver the Securities to be issued
and sold at such Closing, in each case, have been satisfied or waived.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $1.00 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.
“Contingent
Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect
to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring
such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will
be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will
be protected (in whole or in part) against loss with respect thereto.
“Copyrights”
shall have the meaning ascribed to such term in Section 3.1(w).
“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.
“Disqualification
Event” shall have the meaning ascribed to such term in Section 3.1(r).
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(ii).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“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).
“Governmental
Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature,
federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including
any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national organization
or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory,
or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned
or controlled by a government or a public international organization or any of the foregoing
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(0).
“Indemnitee”
shall have the meaning ascribed to such term in Section 3.1(g).
“Indemnified
Liabilities” shall have the meaning ascribed to such term in Section 3.1(g).
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).
“Issuer
Covered Person” shall have the meaning ascribed to such term in Section 3.1(r)
“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).
“Liens”
means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Listing
Default” shall have the meaning ascribed to such term in Section 4.9.
“Marks”
shall have the meaning ascribed to such term in Section 3.1(w).
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(m).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(u).
“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.21.
“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(bb).
“NASDAQ
CM” shall have the meaning ascribed to such term in Section 3.1(x).
“NASDAQ
CM Conclusion” shall have the meaning ascribed to such term in Section 3.1(d).
“NASDAQ
Rules” means the rules and regulations of The NASDAQ Stock Market LLC
“OFAC”
shall have the meaning ascribed to such term in Section 3.1(y).
“Offering”
shall have the meaning ascribed to such term in the Preamble.
“Patents”
shall have the meaning ascribed to such term in Section 3.1(w).
“Permitted
Indebtedness” means Indebtedness existing as of the date hereof as it exists on the date hereof.
“Per
Share Purchase Price” equals $1.00, subject to appropriate 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.
“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.
“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 4.2(b).
“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.7.
“Removal
Date” means the date that all of the issued 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 requirements under Rule 144
and without volume or manner-of-sale restrictions.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(d).
“Required
Minimum” shall have the meaning ascribed to such term in Section 4.8.
“Rights
in Mask Works” shall have the meaning ascribed to such term in Section 3.1(w).
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“SEC
Filings” shall have the meaning ascribed to such term in Section 3.1(e).
“Securities”
means the Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Series
B Escrow” means the escrow agreement entered into at or about the date hereof, by and among the Company, Signature Bank
N.A. and the purchasers of Series B Preferred, pursuant to which the purchasers shall deposit Series B Subscription Agreements
and the subscription amounts therefor with Signature Bank N.A. to be applied to the transactions contemplated thereunder.
“Series
B Preferred” means the 0% Convertible Series B Preferred Stock of the Company, par value $1.00 per share, offered, issued
or sold by the Company as Units, and all additional securities and agreements in connection therewith, contemporaneous or following
the date hereof.
“Series
B Subscription Agreements” means, as to each purchaser of Series B Preferred, the subscription agreement executed by
such purchaser for the Series B subscription amount set forth therein.
“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser at each Closing, the aggregate amount to be paid for Shares purchased hereunder at
such Closing as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately available funds.
“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable and with regard to future
events, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Termination
Date” shall have the meaning ascribed to such term in Section 2.1.
“Trade
Secrets” shall have the meaning ascribed to such term in Section 3.1(w).
“Trading
Day” means a day on which the principal Trading Market is open for trading; provided, that in the event that the Common
Stock is not listed or quoted for trading on a Trading Market on the date in question, then Trading Day shall mean a Business Day.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, NASDAQ CM, The NASDAQ Global Market, The NASDAQ Global Select Market, the New York Stock Exchange,
OTCQB, OTCQX, the Bulletin Board or the OTC Pink (or any successors to any of the foregoing). Notwithstanding the foregoing, term
“Trading Market” shall only include the OTC Pink for any interim period of time required upon the Company’s delisting
from any other Trading Market provided that the Company shall be required to list its Common Stock for trading or quotation on
another Trading Market (excluding the OTC Pink) promptly upon such delisting and the failure to do so shall constitute a default
under the terms of this Agreement and the other Transaction Documents.
“Transaction
Documents” means this Agreement all exhibits and schedules thereto and hereto and any other documents or agreements executed
in connection with the transactions contemplated hereunder.
“Transfer
Agent” means American Stock Transfer & Trust Company, LLC, and any successor transfer agent of the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or
quoted for trading on a Trading Market and if prices for the Common Stock are then reported on the OTC Pink Marketplace maintained
by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent
closing price per share of the Common Stock so reported, or (c) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities
then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and each of the Purchasers, severally and not
jointly, agrees to purchase Shares for an aggregate purchase price $500,000 (or such lesser amount as shall not exceed 19.99%
of the issued and outstanding shares of Common Stock of the Company, as determined in accordance with the NASDAQ Rules) at the
Per Share Purchase Price, and such purchase and sale being the “Closing”). Prior to the Closing, each Purchaser
shall deliver to the Company such Purchaser’s Closing Subscription Amount as set forth on the signature page hereto executed
by such Purchaser by a wire transfer of immediately available funds and the Company shall, on the Closing Date, deliver to each
Purchaser a certificate representing the number of Shares purchased by such Purchaser at the Closing as determined pursuant to
Section 2.2(a). The Company and each Purchaser shall also deliver the other items set forth in Section 2.2 deliverable at the Closing.
Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3 and receipt of the aggregate Offering amount
by the Company, the Closing shall occur at the principal offices of the Company or such other location as the parties shall mutually
agree. Notwithstanding anything herein to the contrary, the Closing Date shall occur on or before August 15, 2015 (such outside
date, “Termination Date”). If the Closing is not held on or before the Termination Date, the Company shall cause
each Subscription Amount to be returned, without interest thereon or deduction therefrom to the Purchaser who delivered such Subscription
Amount.
2.2 Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Purchasers the following:
(i) this
Agreement duly executed by the Company;
(ii) legal
opinion of Baker & Hostetler LLP, counsel to the Company, substantially in the form of Exhibit B attached hereto;
(iii) a certificate
evidencing a number of Shares equal to such Purchaser’s Closing Subscription Amount divided by the Per Share Purchase Price,
registered in the name of such Purchaser;
(iv) the
Officer’s Certificate (as defined herein);
(v) the Secretary’s
Certificate (as defined herein); and
(vi) evidence
of NASDAQ CM Conclusion.
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i) this
Agreement duly executed by such Purchaser; and
(ii) such
Purchaser’s Closing Subscription Amount by wire transfer to the account specified by the Company on Exhibit A hereto.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy
in all material respects on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as
of a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser under this Agreement required to be performed at or prior to the Closing
Date shall have been performed in all material respects;
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement;
(iv) the
Company shall have received executed signature pages to this Agreement from Purchasers and the Company shall have received payment
of immediately available funds representing corresponding Subscription Amounts equal to $500,000, in the aggregate, from such Purchasers
in cash; and
(v) the Company
shall, on the Closing Date or, in any event, no later than 45 days after the Closing Date, have accepted subscriptions for at least
$6,000,000 of units consisting of Series B Preferred and warrants to purchase securities of the Company, subject to terms of the
Series B Subscription Agreements, the Series B Escrow and the governing Certificate of Designation of Rights, Powers, Preferences,
Privileges and Restrictions of the 0% Series B Convertible Preferred Stock of Dataram Corporation, substantively in the form in
existence on the Closing Date, which substantively final form shall have been approved by the Company’s Board of Directors
as of the Closing Date, the failure of which shall be deemed a material breach of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being
met:
(i) the representations
and warranties of the Company shall have been true and correct in all material respects on the date of this Agreement (except whether
such representations are qualified by material or material adverse effect, which shall be true and correct in all respects) and
shall be true and correct as of the Closing as if made on the Closing Date and the Company shall have performed, satisfied and
complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by
the Company in connection with the consummation of the transactions contemplated by the Transaction Documents at or prior to the
Closing Date and the Company shall deliver a certificate, executed by its Chief Executive Officer, dated as of the Closing Date,
certifying that the foregoing is true (the “Officer’s Certificate”);
(ii) the
Company shall deliver to the Purchasers, a certificate from the Company, signed by its Secretary or Assistant Secretary, including
incumbency specimen signatures of any signatory of any Transaction Document of the Company and certifying that the attached copies
of the Company’s restated certificate of incorporation, as amended and bylaws, as amended, and resolutions of the Board of
Directors of the Company approving this the transactions contemplated by this Agreement, are all true, complete and correct and
remain in full force and effect (the “Secretary’s Certificate”);
(iii) all
obligations, covenants and agreements of the Company under this Agreement required to be performed at or prior to the Closing Date
shall have been performed;
(iv) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(v) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof;
(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 from the date hereof prior to the Closing Date, trading in securities generally as reported
by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market
which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities
at the Closing; and
(vi) the
Company shall have received executed signature pages to this Agreement from Purchasers and the Company shall have received corresponding
Subscription Amounts from such Purchasers in cash.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed
a part hereof and shall qualify any representation or warranty made herein only to the extent of the disclosure contained in the
corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each
Purchaser as of the Closing Date:
(a) Organization
and Qualification. The Company and each of the direct and indirect subsidiaries of the Company (the “Subsidiaries”)
is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. The Company
and each of its Subsidiaries is duly qualified to do business, and is in good standing in the states required due to (i) the ownership
or lease of real or personal property for use in the operation of the Company's business or (ii) the nature of the business conducted
by the Company, except where the failure to so qualify would not, individually or in the aggregate, have a Material Adverse Effect
(as defined herein). The Company and each of its Subsidiaries has all requisite power, right and authority to own, operate and
lease its properties and assets, to carry on its business as now conducted, to execute, deliver and perform its obligations under
this Agreement and the other Transaction Documents to which it is a party, and to carry out the transactions contemplated hereby
and thereby, subject to the Required Approvals. All actions on the part of the Company and its officers and directors necessary
for the authorization, execution, delivery and performance of this Agreement and the other Transaction Documents, the consummation
of the transactions contemplated hereby and thereby, and the performance of all of the Company's obligations under this Agreement
and the other Transaction
Documents
have been taken or will be taken prior to the Closing. This Agreement has been, and the other Transaction Documents to which the
Company is a party on the Closing will be, duly executed and delivered by the Company, and this Agreement is, and each of the other
Transaction Documents to which it is a party on the Closing will be, a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium
and similar laws of general application relating to or affecting the enforcement of rights of creditors, and except as enforceability
of the obligations hereunder are subject to general principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or law). All of the Subsidies and the Company’s ownership interests therein are set forth on Schedule
3(a). The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free
and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
(b) Issuance
of Securities. The Shares to be issued to the Purchaser pursuant to this Agreement and the applicable Transaction Documents,
when issued and delivered in accordance with the terms of this Agreement, will be duly and validly issued and will be fully paid
and non-assessable.
(c) Authorization;
Enforcement. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Company,
and the consummation of the transactions contemplated hereby and thereby, will not (i) constitute a violation (with or without
the giving of notice or lapse of time, or both) of any provision of any law or any judgment, decree, order, regulation or rule
of any court, agency or other governmental authority applicable to the Company, (ii) except as set forth in Section 3(d)
below, require any consent, approval or authorization of, or declaration, filing or registration with, any person, (iii) result
in a default (with or without the giving of notice or lapse of time, or both) under, acceleration or termination of, or the creation
in any party of the right to accelerate, terminate, modify or cancel, any agreement, lease, note or other restriction, encumbrance,
obligation or liability to which the Company is a party or by which it is bound or to which any assets of the Company are subject,
(iv) result in the creation of any lien or encumbrance upon the assets of the Company, or upon any shares of Common Stock, preferred
stock or other securities of the Company, (v) conflict with or result in a breach of or constitute a default under any provision
of the certificate of incorporation or bylaws of the Company, or (vi) invalidate or adversely affect any permit, license, authorization
or status used in the conduct of the business of the Company.
(d) 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)
satisfactory conclusion of the review by The NASDAQ Capital Market (“NASDAQ CM Conclusion”) of the Offering
and the issuance of the Shares and the Listing of Additional Shares Application covering the Shares, such that NASDAQ deems that
no further actions or approvals are required by the Company in order to consummate the transactions contemplated hereby, and (ii)
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”).
(e) SEC
Filings. The Company is subject to, and in full compliance with, the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). The Company has made available to each Purchaser through
the EDGAR system true and complete copies of the Company’s filings for the prior two full fiscal years plus any interim period
(collectively, the “SEC Filings”), and all such SEC Filings are incorporated herein by reference. The SEC Filings,
when they were filed with the Commission (or, if any amendment with respect to any such document was filed, when such amendment
was filed), complied in all material respects with the applicable requirements of the Exchange Act and the rules and regulations
thereunder and did not, as of such date, contain an untrue statement of a material fact or omit 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. All reports and statements required to be filed by the Company under the Exchange Act have been filed, together
with all exhibits required to be filed therewith. The Company and each of its direct and indirect Subsidiaries are engaged in all
material respects only in the business described in the SEC Filings, and the SEC Filings contain a complete and accurate description
in all material respects of the business of the Company and the Subsidiaries.
(f) No
Financial Advisor. The Company acknowledges and agrees that each Purchaser is acting solely in the capacity of an arm’s
length purchaser with respect to the Securities and the transactions contemplated hereby. 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 this Agreement
and the transactions contemplated hereby and any advice given by any Purchaser or any of its representatives or agents in connection
with this Agreement and the transactions contemplated hereby is merely incidental to such Purchaser’s purchase of the Securities.
The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement has been based
solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(g) Indemnification.
The Company will indemnify and hold harmless each Purchaser and, where applicable, its directors, officers, employees, agents,
advisors and shareholders (each, an “Indemnitee”) from and against any and all loss, liability, claim, damage
and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating,
preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened)
(the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to
(i) any misrepresentation or breach of any representation or warranty made by the Company or any Subsidiary in any of the Transaction
Documents, (ii) any breach of any covenant, agreement or obligation of the Company or any Subsidiary contained in any of the Transaction
Documents or (iii) any cause of action, suit, proceeding or claim brought or made against such Indemnitee by a third party (including
for these purposes a derivative action brought on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee
that arises out of or results from (A) the execution, delivery, performance or enforcement of any of the Transaction Documents,
(B) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of
the Securities, or (C) the status of such Purchaser or holder of the Securities either as an investor in the Company pursuant to
the transactions contemplated by the Transaction Documents or as a party to this Agreement (including, without limitation, as a
party in interest or otherwise in any action or proceeding for injunctive or other equitable relief). To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.
(h) Capitalization
and Additional Issuances. The capitalization of the Company is as set forth in Schedule 3.1(h). Except as set forth
in Schedule 3.1(h), the Company has not issued any capital stock since its 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 disclosed on Schedule 3.1(h), there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights
or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire
any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is
or may become bound to issue additional shares of Common Stock or Common Stock equivalents. Except as set forth on Schedule
3.1(h), the issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities
to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company
are duly authorized, validly issued, fully paid and nonassessable, have been issued in material 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. Except for NASDAQ CM Conclusion, no further approval or authorization of any shareholder,
the Board of Directors or others is required for the issuance and sale of the Securities. There are no shareholders 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 shareholders.
(i) Private
Placements. Assuming the accuracy of each 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 Purchasers as contemplated
hereby.
(j) Investment
Company. The Company is not, and is not an affiliate of, and immediately after receipt of payment for the Shares will not be
or be an affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act.
(k) Reporting
Company/Shell Company Status. The Company is a publicly-held company subject to reporting obligations pursuant to Sections
12(g) and 13 of the Exchange Act. Pursuant to the provisions of the Exchange Act, the Company has timely filed all reports and
other materials required to be filed by the Company thereunder with the SEC during the preceding twelve months. The Company is
not and has never been a “shell company”, as that term is employed in Rule 144 under the Securities Act. The Company
is in full compliance with the continued listing standards of NASDAQ CM 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.
(l) Litigation.
Except as set forth on Schedule 3.1(l), there is no action, suit, proceeding, inquiry or investigation before or by the
Trading Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge
of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s
or its Subsidiaries’ officers or directors which is outside of the ordinary course of business or individually or in the
aggregate material to the Company or any of its Subsidiaries. No director, officer or employee of the Company or any of its
Subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation.
Without limitation of the foregoing, 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, any of its Subsidiaries or any current or former director or officer
of the Company or any of its Subsidiaries. The Commission has not issued any stop order or other order suspending the effectiveness
of any registration statement filed by the Company under the Securities Act or the Exchange Act.
(m) Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees are
good. The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations
respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except
as disclosed in Schedule 3.1(m) or where failure to be in compliance would not, either individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect
on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise)
or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in
any of the other Transaction Documents or (iii) the authority or ability of the Company or any of its Subsidiaries to perform any
of their respective obligations under any of the Transaction Documents.
(n) Tax
Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely 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, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate
for the payment of all 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 and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as
to qualify as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.
(o) Indebtedness
and Other Contracts. Except as set forth on Schedule 3.1(o) annexed hereto, neither the Company nor any of its Subsidiaries
(i) has any outstanding Indebtedness (as defined below), (ii) is a party to any contract, agreement or instrument, the violation
of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected
to result in a Material Adverse Effect, (iii) is in violation of any term of, or in default under, any contract, agreement or instrument
relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in
a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance
of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect. For purposes
of this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness for
borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including,
without limitation, “capital leases” in accordance with generally accepted accounting principles) (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters
of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with
respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller
or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations
under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F)
above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, claim, lien, tax, right of first refusal, pledge, charge, security interest or other encumbrance upon or in any property
or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property
has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G) above.
(p) No
Undisclosed Events, Liabilities, Developments or Circumstances. Since the date of the latest audited financial statements included
within the SEC Filings, except as specifically disclosed in a subsequent SEC Filing: (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 material 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 General Accepted Accounting Principles (“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 shareholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock and (v) except as set forth on Schedule 3.1(p), the Company has not issued any
equity securities to any officer, director or Affiliate. The Company does not have pending before the SEC any request for confidential
treatment of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule
3.1(p), no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected
to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets
or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at least two Trading Days prior to the date that this
representation is made.
(q) No
Additional Agreements. Neither the Company nor any of its Subsidiaries has any agreement or understanding with any Purchaser
with respect to the transactions contemplated by the Transaction Documents other than pursuant to documents substantially identical
to the Transaction Documents.
(r) No
Disqualification Events. To the Company’s knowledge, none of the Company, any of its predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial
owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor
any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time
of sale (each, an “Issuer Covered Person”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a
Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification Event.
(s) General
Solicitation. None of the Company, any of its affiliates (as defined in Rule 501(b) under the Securities Act) or any person
acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any
form of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio;
and (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.
(t) Compliance.
To the Company’s knowledge, 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.
(u) 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 Filings,
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.
(v) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property (if any) 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 as set forth on Schedule 3.1(v) and except for (i) liens
as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made
of such property by the Company and the Subsidiaries and (ii) liens for the payment of federal, state or other taxes, for which
appropriate reserves have been made in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties.
Any real property and facilities held under lease by the Company and the Subsidiaries is held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries are in compliance.
(w) Intellectual
Property.
(i) The
term “Intellectual Property Rights” includes:
(A) the
name of the Company and each Subsidiary, all fictional business names, trading names, registered and unregistered trademarks, service
marks, and applications of the Company and each Subsidiary (collectively, “Marks'');
(B) all
patents, patent applications, and inventions and discoveries that may be patentable of the Company and each Subsidiary (collectively,
“Patents'');
(C) all
copyrights in both unpublished works and published works of the Company and each Subsidiary (collectively, “Copyrights”);
(D) all
rights in mask works of the Company and each Subsidiary (collectively, “Rights in Mask Works''); and
(E) all
know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology, plans,
drawings, and blue prints (collectively, “Trade Secrets''); owned, used, or licensed by the Company and each Subsidiary
as licensee or licensor
(ii) Agreements.
There are no outstanding and, to Company’s knowledge, no threatened disputes or disagreements with respect to any agreements
relating to any Intellectual Property Rights to which the Company is a party or by which the Company is bound.
(iii) Know-How
Necessary for the Business. The Intellectual Property Rights are all those necessary for the operation of the Company’s
businesses as it is currently conducted. The Company is the owner of all right, title, and interest in and to each of the Intellectual
Property Rights, except as set forth on Schedule 3.1(w), free and clear of all liens, security interests, charges, encumbrances,
equities, and other adverse claims, and has the right to use all of the Intellectual Property Rights. To the Company’s knowledge,
no employee of the Company has entered into any contract that restricts or limits in any way the scope or type of work in which
the employee may be engaged or requires the employee to transfer, assign, or disclose information concerning his work to anyone
other than of the Company.
(iv) Patents.
The Company is the owner of all right, title and interest in and to each of the Patents, free and clear of all Liens and other
adverse claims. All of the issued Patents are currently in compliance with formal legal requirements (including payment of filing,
examination, and maintenance fees and proofs of working or use), are valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety days after the Closing Date. No Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To the Company’s knowledge except as set forth in Schedule 3.1(w):
(1) there is no potentially interfering patent or patent application of any third party, and (2) no Patent is infringed or has
been challenged or threatened in any way. To the Company’s knowledge, none of the products manufactured and sold, nor any
process or know-how used, by the Company infringes or is alleged to infringe any patent or other proprietary right of any other
Person.
(v) Trademarks.
The Company is the owner of all right, title, and interest in and to each of the Marks, free and clear of all Liens and other adverse
claims. All Marks that have been registered with the United States Patent and Trademark Office are currently in compliance with
all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability and renewal
applications), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety
days after the Closing Date. Except as set forth in Schedule 3.1(w), no Mark has been or is now involved in any opposition,
invalidation, or cancellation and, to the Company’s knowledge, no such action is threatened with respect to any of the Marks.
To the Company’s knowledge: (1) there is no potentially interfering trademark or trademark application of any third party,
and (2) no Mark is infringed or has been challenged or threatened in any way. To the Company’s knowledge, none of the Marks
used by the Company infringes or is alleged to infringe any trade name, trademark, or service mark of any third party.
(vi) Copyrights.
The Company is the owner of all right, title, and interest in and to each of the Copyrights, free and clear of all Liens and other
adverse claims. All the Copyrights have been registered and are currently in compliance with formal requirements, are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after the date of the
Closing. To the Company’s knowledge, no Copyright is infringed or has been challenged or threatened in any way. To the Company’s
knowledge, none of the subject matter of any of the Copyrights infringes or is alleged to infringe any copyright of any third party
or is a derivative work based on the work of a third party. All works encompassed by the Copyrights have been marked with the proper
copyright notice.
(vii) Trade
Secrets. With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate, and sufficient
in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge or memory
of any individual. The Company has taken all reasonable precautions to protect the secrecy, confidentiality, and value of its Trade
Secrets. The Company has good title and an absolute and exclusive right to use the Trade Secrets. The Trade Secrets are not part
of the public knowledge or literature, and, to the Company’s knowledge, have not been used, divulged, or appropriated either
for the benefit of any Person (other the Company) or to the detriment of the Company. No Trade Secret is subject to any adverse
claim or has been challenged or threatened in any way.
(x) Stock
Option Plans. Since commencement of trading of the Company’s Common Stock on The NASDAQ Capital Market (“NASDAQ
CM”), each stock option granted by the Company under the stock option plan was granted (i) in accordance with the terms
of such 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 any stock option plan
has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly
grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement
of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(y) 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 is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“OFAC”).
(z) Listing
and Maintenance Requirements. The Common Stock is listed on NASDAQ CM under the symbol DRAM. Except as disclosed on Schedule
3.1(z), the Company has not, in the twenty-four (24) 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.
(aa) 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.
(bb) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance in all
material respects 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.
(cc) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding,
it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has
any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities for any specified term, (ii) past or
future
open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price
of the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative” transactions
to which any such Purchaser is a party, directly or indirectly, may presently have a “short” position in the Common
Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party
in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more Purchasers may
engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation,
during the periods that the value of the Underlying Shares deliverable with respect to Securities are being determined, and (z)
such hedging activities (if any) could reduce the value of the existing shareholders’ 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. 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.
(dd) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting
solely in the capacity of an arm’s length Purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given
by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to
each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based
solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(ee) No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of: (i) the Securities Act which would require
the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any
Trading Market on which any of the securities of the Company are listed or designated.
(ff) Application
of Takeover Protections. The Company and the Board of Directors will have taken as of the Closing Date all necessary action,
if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of
the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including
without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.
(gg) Registration
Rights. Except as set forth on Schedule 3.1(gg) and as contemplated by the Series B Subscription Agreements, no Person
has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the
Company or any Subsidiary.
(hh) Certain
Fees. Except as disclosed on Schedule 3.1(hh), no brokerage, finder’s fees, commissions or due diligence fees
are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers
shall have no obligation with respect to any such fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section 4(hh) that may be due in connection with the transactions contemplated by the Transaction
Documents.
(ii) 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. Except as set forth on Schedule
3.1(ii), 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. Except as disclosed in the SEC Filings, the Company and the Subsidiaries have established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed
such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures
of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange
Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected,
or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
(jj) Transactions
With Affiliates and Employees. Except as set forth on Schedule 3.1(jj), 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, shareholder, member or partner, in each case
in excess of $50,000 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 except as disclosed on Schedule 3.1(jj).
(kk) 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 Offering amount. Neither the Company
nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant
increase in cost.
(ll) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents or disclosed
as Other Written Information, the Company confirms that neither it nor any other Person acting on its behalf has provided any of
the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public
information. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions
in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company
and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules
to this Agreement, when taken together as a whole, is true and correct and does not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date
of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth herein.
(mm) Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, and the Company’s good faith estimate
of the fair market value of its assets, 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. Schedule 3.1(mm) sets forth as of the date
hereof all outstanding liens and secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company
or any Subsidiary has commitments which has not been disclosed in the SEC Filings. Except as disclosed on Schedule 3.1(mm),
neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(nn) 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.
(oo) Other
Covered Persons. The Company is not aware of any person that has been or will be paid (directly or indirectly) remuneration
for solicitation of purchasers in connection with the sale of any Regulation D Securities.
(pp) Accountants
and Lawyers. The Company’s accounting firm is set forth on Schedule 3.1(qq) of the Disclosure Schedules. To the
knowledge and belief of the Company, such accounting firm: (i) is a registered public accounting firm as required by the Exchange
Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report
for the fiscal year ending April 30, 2015. 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.
(qq) Survival.
The foregoing representations and warranties shall survive the Closing Date.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, severally and not jointly, hereby acknowledges, agrees with and represents,
warrants and covenants to the Company, as follows:
(a) The
Purchaser has full power and authority to enter into this Agreement, the execution and delivery of which has been duly authorized,
if applicable, and this Agreement constitutes a valid and legally binding obligation of the Purchaser, except as may be limited
by bankruptcy, reorganization, insolvency, moratorium and similar laws of general application relating to or affecting the enforcement
of rights of creditors, and except as enforceability of the obligations hereunder are subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or law).
(b) The
Purchaser acknowledges its understanding that the Offering and sale of the Securities is intended to be exempt from registration
under the Securities Act, by virtue of Section 4(a)(2) of the Securities Act and the provisions of Regulation D promulgated thereunder
(“Regulation D”). In furtherance thereof, the Purchaser represents and warrants to the Company and its affiliates
as follows:
(i) The Purchaser
realizes that the basis for the exemption from registration may not be available if, notwithstanding the Purchaser’s representations
contained herein, the Purchaser is merely acquiring the Securities for a fixed or determinable period in the future, or for a market
rise, or for sale if the market does not rise. The Purchaser does not have any such intention.
(ii) The
Purchaser realizes that the basis for exemption would not be available if the Offering is part of a plan or scheme to evade registration
provisions of the Securities Act or any applicable state or federal securities laws, except sales pursuant to a registration statement
or sales that are exempted under the Securities Act.
(iii) The
Purchaser is acquiring the Securities solely for the Purchaser’s own beneficial account, for investment purposes, and not
with a view towards, or resale in connection with, any distribution of the Securities.
(iv) The
Purchaser has the financial ability to bear the economic risk of the Purchaser’s investment, has adequate means for providing
for its current needs and contingencies, and has no need for liquidity with respect to an investment in the Company.
(v) The Purchaser
and the Purchaser’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively, the “Advisors”)
has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of a prospective
investment in the Securities. If other than an individual, the Purchaser also represents it has not been organized solely for the
purpose of acquiring the Securities.
(vi) The
Purchaser (together with its Advisors, if any) has received all documents requested by the Purchaser, if any, and has carefully
reviewed them and understands the information contained therein, prior to the execution of this Agreement.
(c) The Purchaser
is not relying on the Company or any of its employees, agents, sub-agents or advisors with respect to the legal, tax, economic
and related considerations involved in this investment. The Purchaser has relied on the advice of, or has consulted with, only
its Advisors. Each Advisor, if any, has disclosed to the Purchaser in writing (a copy of which is annexed to this Agreement) the
specific details of any and all past, present or future relationships, actual or contemplated, between the Advisor and the Company
or any affiliate or sub-agent thereof.
(d) The Purchaser
has carefully considered the potential risks relating to the Company and a purchase of the Securities, and fully understands that
the Securities are a speculative investment that involves a high degree of risk of loss of the Purchaser’s entire investment.
Among other things, the Purchaser has carefully considered each of the risks described under the heading “Risk Factors”
in the Company’s SEC Filings (as defined above) and any additional disclosures in the nature of Risk Factors described herein.
(e) The Purchaser
will not sell or otherwise transfer any Securities without registration under the Securities Act or an exemption therefrom, and
fully understands and agrees that the Purchaser must bear the economic risk of its purchase because, among other reasons, the Securities
have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot be resold, pledged,
assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under the applicable securities
laws of such states, or an exemption from such registration is available. In particular, the Purchaser is aware that the Securities
are “restricted securities,” as such term is defined in Rule 144, and they may not be sold pursuant to Rule 144 unless
all of the conditions of Rule 144 are met. The Purchaser also understands that the Company is under no obligation to register the
Securities on behalf of the Purchaser or to assist the Purchaser in complying with any exemption from registration under the Securities
Act or applicable state securities laws. The Purchaser understands that any sales or transfers of the Securities are further restricted
by state securities laws and the provisions of this Agreement.
(f) No oral or
written representations or warranties have been made, or information furnished, to the Purchaser or its Advisors, if any, by the
Company or any of its officers, employees, agents, sub-agents, affiliates, advisors or subsidiaries in connection with the Offering,
other than any representations of the Company contained herein, and in subscribing for the Securities, the Purchaser is not relying
upon any representations other than those contained herein.
(g) The Purchaser’s
overall commitment to investments that are not readily marketable is not disproportionate to the Purchaser’s net worth, and
an investment in the Securities will not cause such overall commitment to become excessive.
(h) The Purchaser
understands and agrees that the certificates for the Securities shall bear substantially the following legend:
“THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED
BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
(i) Certificates
evidencing Securities shall not be required to contain the legend set forth in Section 3.2 (h) above or any other legend (i)
while a registration statement covering the resale of such Securities is effective under the Securities Act, (ii) following any
sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities
are eligible to be sold, assigned or transferred under Rule 144 (provided that the Purchaser provides the Company with reasonable
assurances that such Securities are eligible for sale, assignment or transfer under Rule 144 which shall not include an opinion
of the Purchaser’s counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144), provided
that the Purchaser provides the Company with an opinion of counsel, at the expense of the Company, in a generally acceptable form,
to the effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements
of the Securities Act or (v) if such legend is not required under applicable requirements of the Securities Act (including, without
limitation, controlling judicial interpretations and pronouncements issued by the Commission). If a legend is not required pursuant
to the foregoing, the Company shall no later than three (3) business days following the delivery by the Purchaser to the Company
or the transfer agent (with notice to the Company) of a legended certificate representing such Securities (endorsed or with stock
powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if
applicable), together
with any other deliveries from the Purchaser as may be required above in this Section 3.2 (i), as directed by the Purchaser,
either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated Securities Transfer Program,
credit the aggregate number of shares of Common Stock to which the Purchaser shall be entitled to the Purchaser’s or its
designee’s balance account with DTC through its Deposit and Withdrawal at Custodian system or (B) if the Company’s
transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight
courier) to the Purchaser, a certificate representing such Securities that is free from all restrictive and other legends, registered
in the name of the Purchaser or its designee. The Company shall be responsible for any transfer agent fees, fees of legal counsel
to the Company or DTC fees with respect to any issuance of Securities or the removal of any legends with respect to any Securities
in accordance herewith.
(j) Neither the
Commission nor any state securities commission has approved the Securities or passed upon or endorsed the merits of the Offering.
There is no government or other insurance covering any of the Securities.
(k) The Purchaser
and its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting
on behalf of the Company concerning the Offering and the business, financial condition, results of operations and prospects of
the Company, and all such questions have been answered to the full satisfaction of the Purchaser and its Advisors, if any.
(l) (i) In
making the decision to invest in the Securities, the Purchaser has relied solely upon the information provided by the Company in
the Transaction Documents. To the extent necessary, the Purchaser has retained, at its own expense, and relied upon appropriate
professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the Securities
hereunder. The Purchaser disclaims reliance on any statements made or information provided by any person or entity in the course
of Purchaser’s consideration of an investment in the Securities other than the Transaction Documents.
(ii) The Purchaser
represents and warrants that: (i) the Purchaser was contacted regarding the sale of the Securities by the Company (or an authorized
agent or representative thereof) with whom the Purchaser had a prior substantial pre-existing relationship and (ii) no Securities
were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the
Purchaser did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper
or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend
any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising;
or (C) observe any website or filing of the Company with the Commission in which any offering of securities by the Company was
described and as a result learned of any offering of securities by the Company.
(m) The Purchaser
has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or the like
relating to this Agreement or the transactions contemplated hereby.
(n) The Purchaser
is not relying on the Company or any of its employees, agents, or advisors with respect to the legal, tax, economic and related
considerations of an investment in the Securities, and the Purchaser has relied on the advice of, or has consulted with, only its
own Advisors.
(o) The Purchaser
acknowledges that any estimates or forward-looking statements or projections furnished by the Company to the Purchaser were prepared
by the management of the Company in good faith, but that the attainment of any such projections, estimates or forward-looking statements
cannot be guaranteed by the Company or its management and should not be relied upon.
(p) No oral or
written representations have been made, or oral or written information furnished, to the Purchaser or its Advisors, if any, in
connection with the Offering that are in any way inconsistent with the information contained herein.
(q) (For ERISA
plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of
and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan
assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification
of plan assets and impose other fiduciary responsibilities. The Purchaser or Plan fiduciary (i) is responsible for the decision
to invest in the Company; (ii) is independent of the Company and any of its affiliates; (iii) is qualified to make such investment
decision; and (iv) in making such decision, the Purchaser or Plan fiduciary has not relied primarily on any advice or recommendation
of the Company or any of its affiliates.
(r) The Purchaser
is an “Accredited Investor” as defined in Rule 501(a) under the Securities Act. In general, an “Accredited Investor”
is deemed to be an institution with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 (excluding
such person’s residence) or annual income exceeding $200,000 or $300,000 jointly with his or her spouse.
(s) 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 Offering, and has so evaluated the merits and risks of such
investment. The Purchaser has not authorized any person or entity to act as its Purchaser Representative (as that term is defined
in Regulation D of the General Rules and Regulations under the Securities Act) in connection with the Offering. 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.
ARTICLE
IV.
OTHER AGREEMENTS
OF THE PARTIES
4.1 Transfer
Restrictions.
(a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer
of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser
or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of
such transferred Securities under the Securities Act. As a condition of such transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and the other applicable Transaction Documents and shall have the rights and
obligations of a Purchaser under this Agreement.
(b) The
Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on the Securities in the following
form:
“THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND APPLICABLE
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. TO THE EXTENT PERMITTED
BY APPLICABLE SECURITIES LAWS, THIS SECURITY [AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED
INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.”
The Company acknowledges and agrees
that, a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant
a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as
defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and the other applicable
Transaction Documents and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities
into the name of the pledgees or secured parties, in their respective capacities as such. Such a pledge or transfer would
not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall
be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s
expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably
request in connection with a pledge or transfer of the Securities.
(c) Certificates
evidencing the Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof), (i) following any
sale of such Shares pursuant to Rule 144 or pursuant to an effective registration statement or (ii) if such Shares are eligible
for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required
under Rule 144 as to such Shares and without volume or manner-of-sale restrictions or (iii) if such legend is not required under
applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the
Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly for any Security
after the Removal Date if required by the Transfer Agent to effect the removal of the legend hereunder upon the occurrence of the
sale of the Shares, if a sale is so required in such circumstances. If all or any portion of the Shares are included in an
effective registration statement to cover the resale of such Shares (and the Purchaser provides the Company or the Company’s
counsel with any reasonable certifications requested by the Company with respect to future sales of such Shares) or the Shares
may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information and
any other limitations or requirements set forth in Rule 144, including, without limitation, volume or manner-of-sale restrictions,
or if a 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 Shares will be reissued without the legend. The Company agrees
that following the Removal Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later
than seven Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing
Shares issued with a restrictive legend, together with any reasonable certifications requested by the Company, the Company’s
counsel or the Transfer Agent (such seventh Trading Day, the “Legend Removal Date”), deliver or cause to be
delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends. The Company
may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section 4. Certificates for Securities 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 through its Deposit
and Withdrawal at Custodian system (“DWAC”) as directed by such Purchaser if the Transfer Agent is then a participant
in such system, it is commercially reasonable for the Company to do so and either (i) there is an effective registration statement
permitting the resale of such Securities by the Purchaser (and the Purchaser provides the Company or the Company’s counsel
with any requested certifications with respect to future sales of such Securities) or (ii) the shares are eligible for resale by
the Purchaser without further volume limitations or manner-of-sale restrictions and may be sold without the requirement for the
Company to be in compliance with Rule 144(c)(1) of the Securities Act (and the Purchaser provides the Company or the Company’s
counsel with any requested certifications with respect to the sale of such Securities).
(d) In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, for each $1,000 of Shares (based on the greater of the VWAP of the Common Stock on the date such
Securities are submitted to the Transfer Agent or the purchase price of such Shares) delivered for removal of the restrictive legend
and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages
have begun to accrue) for each Trading Day following the Legend Removal Date until such certificate is delivered without a legend.
Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates
representing any Securities as required by the Transaction Documents, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
(e) In
lieu of delivering physical certificates representing the unlegended shares, upon request of a Purchaser, so long as the certificates
therefor do not bear a legend and the Purchaser is not obligated to return such certificate for the placement of a legend thereon
and provided it is commercially reasonable for the Company to do so, the Company shall cause its transfer agent to electronically
transmit the unlegended shares by crediting the account of Purchaser’s prime broker with the Depository Trust Company through
its DWAC system, provided that the Company’s Common Stock is DTC eligible and the Company’s transfer agent participates
in the Deposit Withdrawal at Custodian system. Such delivery must be made on or before the Legend Removal Date.
(f) In
the event a Purchaser shall request delivery of unlegended shares as described in this Section 4.1 and the Company is required
to deliver such unlegended shares, the Company may not refuse to deliver unlegended shares based on any claim that such Purchaser
or anyone associated or affiliated with such Purchaser has not complied with Purchaser’s obligations under the Transaction
Documents, or for any other reason, unless, an injunction or temporary restraining order from a court, on notice, restraining and
or enjoining delivery of such unlegended shares shall have been sought and obtained by the Company and the Company has posted a
surety bond for the benefit of such Purchaser in the amount of the greater of (i) 120% of the amount of the aggregate purchase
price of the Shares which is subject to the injunction or temporary restraining order, or (ii) the VWAP of the Common Stock on
the trading day before the issue date of the injunction multiplied by the number of unlegended shares to be subject to the injunction,
which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall
be payable to such Purchaser to the extent Purchaser obtains judgment in Purchaser’s favor.
(g) In
addition to any other rights available to Purchaser, if the Company fails to deliver to a Purchaser unlegended shares as required
pursuant to this Agreement and after the Legend Removal Date the Purchaser, or a broker on the Purchaser’s behalf, purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of the
shares of Common Stock which the Purchaser was entitled to receive in unlegended form from the Company (a “Buy-In”),
then the Company shall promptly pay in cash to the Purchaser (in addition to any remedies available to or elected by the Purchaser)
the amount, if any, by which (A) the Purchaser’s total purchase price (including brokerage commissions, if any) for the shares
of Common Stock so purchased exceeds (B) the aggregate purchase price of the shares of Common Stock delivered to the Company for
reissuance as unlegended shares together with interest thereon at a rate of 15% per annum accruing until such amount and any accrued
interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty). For example, if a Purchaser
purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to $10,000 of purchase
price of Shares delivered to the Company for reissuance as unlegended shares, the Company shall be required to pay the Purchaser
$1,000, plus interest, if any. The Purchaser shall provide the Company written notice indicating the amounts payable to the Purchaser
in respect of the Buy-In.
4.2 Furnishing of Information;
Public Information.
(a) Until
no shares of Series B Preferred are outstanding, 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 commencing on the Closing Date 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 such Purchaser’s other available remedies, the Company shall pay to
a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability
to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of such Purchaser’s
Securities held by such Purchaser 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 Purchasers to transfer the Underlying Shares pursuant
to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public
Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of
the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after
the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public
Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5%
per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual
damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
4.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities by the Company 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, provided the closing of the sale of Series B Preferred into the Series B Escrow shall not be a violation of this agreement.
4.4 Securities
Laws Disclosure; Publicity. The Company shall, by 9:00 a.m. (New York City time) on the first (1st) Trading
Day immediately following the Closing Date, issue a press release disclosing the material terms of the transactions contemplated
hereby, and shall file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto (the “Form
8-K”) within four Business Days of the date hereof. From and after the issuance of such press release and Form 8-K, the
Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any
of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents
in connection with the transactions contemplated by the Transaction Documents. The Company and each Purchaser shall consult with
each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor
any 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 any Purchaser, or without the prior consent of each Purchaser, with respect to any
press release of the Company, which consent shall not unreasonably be withheld, delayed, denied or conditioned, 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 any Purchaser,
or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market unless the name
of such Purchaser is already included in the body of the Transaction Documents, without the prior written consent of such Purchaser,
except: (a) as required by federal or state securities law in connection with the filing of final Transaction Documents with the
Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall
provide the Purchasers with prior notice of such disclosure permitted under this clause (b).
4.5 Non-Public
Information. Except for the schedules and exhibits to this Agreement and the Transaction Documents, and except to the
extent the Company has entered into a non-disclosure, confidentiality or similar agreement with such Purchaser, the Company covenants
and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel with
any information that the Company believes constitutes material non-public information, unless (i) prior thereto such Purchaser
shall have entered into a written agreement with the Company regarding the confidentiality and use of such information, or (ii)
such Purchaser receives such information in connection with serving as an officer and/or director of the Company. The Company
understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities
of the Company.
4.6 Use of
Proceeds. The Company will use the net proceeds to the Company from the sale of the Shares hereunder as set forth on
Schedule 4.6. The Company shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s
debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for
the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in
violation of the law, including FCPA or OFAC.
4.7 Indemnification
of Purchasers. Subject to the provisions of this Section 4.7, the Company will indemnify and hold each Purchaser and
its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach 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 shareholder 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 shareholder or any violations by such
Purchaser Party of 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 such Purchaser Party’s 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 for all Purchaser Parties.
The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably withheld, conditioned 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 4.7 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.
4.8 Reservation
of Common Stock. As of the Closing Date, the Company has reserved and shall continue to reserve and keep available at all times,
free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares
pursuant to this Agreement (other than Section 4.14 but only to the extent the number of shares of Common Stock issuable under
Section 4.14 is not known) (such amount being the “Required Minimum”). If, on any date, the number of authorized
but unissued (and otherwise unreserved) shares of Common Stock is less than 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 the Required Minimum at such time, as soon as possible
and in any event not later than the 60th day after such date.
4.9 Listing
of Common Stock. The Company hereby agrees to maintain the listing or quotation of the Common Stock on the Trading Market on
which it is currently listed, and concurrently with each Closing, the Company, if applicable, shall apply to list or quote all
of the Shares on such Trading Market and promptly secure the listing of all of the Shares on such Trading Market. The Company further
agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application
all of the Shares, and will take such other action as is necessary to cause all of the Shares to be listed or quoted on such other
Trading Market as promptly as possible. The Company will then take all action necessary to continue the listing or quotation and
trading of its Common Stock on a Trading Market until five years after the Closing Date and will comply in all respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market at least until five years
after the Closing Date. In the event the afore-described listing is not continuously maintained for five years after the date of
such listing (a “Listing Default”), then in addition to any other rights the Purchasers may have hereunder or
under applicable law, on the first day of a Listing Default and on each monthly anniversary of each such Listing Default date (if
the applicable Listing Default shall not have been cured by such date) until the applicable Listing Default is cured, the Company
shall pay to each Purchaser an amount in cash, as partial liquidated damages and not as a penalty, equal to 2% of the aggregate
Subscription Amount of the Securities then held by such Purchaser on the day of a Listing Default and on every thirtieth (30th)day
(pro-rated for periods less than thirty days) thereafter until the date such Listing Default is cured. If the Company fails to
pay any liquidated damages pursuant to this Section in a timely manner, the Company will pay interest thereon at a rate of 1.5%
per month (pro-rated for partial months) to the Purchaser.
4.10 Reimbursement.
If any Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is a shareholder of the Company
(except as a result of sales, pledges, margin sales and similar transactions by such Purchaser to or with any current shareholder),
solely as a result of such Purchaser’s acquisition of the Securities under this Agreement, the Company will reimburse such
Purchaser for its reasonable legal and other expenses (including the cost of any investigation preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred. The reimbursement obligations of the Company under
this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and
conditions to any Affiliates of the Purchasers who are actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may be, of the Purchasers and any such Affiliate, and
shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company, the
Purchasers and any such Affiliate and any such Person. The Company also agrees that neither the Purchasers nor any such Affiliates,
partners, directors, agents, employees or controlling persons shall have any liability to the Company or any Person asserting claims
on behalf of or in right of the Company solely as a result of acquiring the Securities under this Agreement.
4.11 Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or
paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless
the same consideration is also offered to all of the Purchasers that are parties to such Transaction Document. For clarification
purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each
Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers
acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise. The foregoing shall
not include any consideration or agreement with the Series B Preferred purchasers.
4.12 Notice
of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person not otherwise disclosed herein.
4.13 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities and the Series B Preferred 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 and the Series B Preferred, including, without limitation, its
obligation to issue the Shares pursuant to the Transaction Documents, are unconditional and absolute, but subject to the terms
and conditions of the Transaction Documents, and not subject to any right of set off, counterclaim, delay or reduction, regardless
of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect
that such issuance may have on the ownership of the other shareholders of the Company.
4.14 Intentionally
omitted.
4.15 Intentionally
omitted.
4.16 DTC Program.
For a period of two (2) years from the Closing Date, the Company will employ as the transfer agent for the Common Stock a participant
in the Depository Trust Company Automated Securities Transfer Program and cause the Common Stock to be transferable pursuant to
such program, if it is determined by the Company to be commercially reasonable to do so.
4.17 Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the sale of the Securities by the Company
under this Agreement as required under Regulation D. 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 Purchasers 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 any Purchaser.
4.18 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any
Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities
under the Transaction Documents or under any other agreement between the Company and the Purchasers.
4.19 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither
it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including
Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending
at such time that the transactions contemplated by this Agreement are first publicly disclosed or required to be disclosed, whichever
occurs first, in the Form 8-K described in Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers,
covenants that, until such time as the transactions contemplated by this Agreement are publicly disclosed or required to be publicly
disclosed, whichever occurs first, by the Company in such Form 8-K, such Purchaser will maintain the confidentiality of the existence
and terms of this transaction and the information included in the Transaction Documents and the Disclosure Schedules. Notwithstanding
the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Company after the time that the transactions contemplated by this Agreement are required to be disclosed
in the Form 8-K described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in
any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated
by this Agreement are first disclosed or required to be disclosed, whichever occurs first, in the Form 8-K described in Section
4.4, and (iii) no Purchaser shall have any duty of confidentiality to the Company or its Subsidiaries after the filing of such
Form 8-K or after the date such Form 8-K is required to have been filed, whichever occurs first. Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions
of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to
the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by
this Agreement.
4.20 Maintenance
of Property. The Company shall keep all of its property, which is necessary or useful to the conduct of its business, in good
working order and condition, ordinary wear and tear excepted.
4.21 Preservation
of Corporate Existence. The Company shall preserve and maintain its corporate existence, rights, privileges and franchises
in the jurisdiction of its then-incorporation, and qualify and remain qualified, as a foreign corporation in each jurisdiction
in which such qualification is necessary in view of its business or operations and where the failure to qualify or remain qualified
might reasonably have a Material Adverse Effect upon the financial condition, business or operations of the Company taken as a
whole.
ARTICLE V.
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice given at any time to the Company,
if the Closing has not been consummated on or before August 15, 2015; provided, however, that such termination
will not affect the right of any party to sue for any breach by any other party (or parties).
5.2 Fees and
Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees, DTC fees, stamp taxes and other similar taxes and duties levied in connection with the delivery of any Securities to
the Purchasers in addition to paying the cost of any counsel or other expenses incurred in rendering Rule 144 opinions of any such
Purchaser upon request. The Company agrees to pay or reimburse all legal fees and expenses of counsel to the Lead Investor in connection
with this Agreement and any of the Transaction Documents, at Closing, and thereafter from time to time in connection with the preparation,
review and/or approval of any matter contemplated herein, in any Company or Purchaser filing, or any of the Transaction Documents.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral
or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a)
upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the
address or number designated below (if delivered on a business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a business day during normal business hours where
such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Company, to: Dataram Corporation, Route 571, P.O. Box 7258, Princeton, NJ 08543, with a
copy by fax only to (which shall not constitute notice): 609-799-6734, with an additional copy by e-mail only to (which shall not
constitute notice): BakerHostetler, 600 Anton Blvd., Suite 900, Costa Mesa, CA 92626, Attn: Randolf W. Katz, Esq., e-mail: rwkatz@bakerlaw.com,
and (ii) if to the Purchasers, to: the addresses and fax numbers indicated on the signature pages hereto, with an additional copy
by fax only to (which shall not constitute notice): Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32nd Floor, New
York, NY 10006, Attn: Harvey Kesner, Esq., fax: (212) 930-9725.
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 Purchasers holding at least a majority in interest of the Securities
then outstanding (the “Majority in Interest”), or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought. Whenever the term “consent of the Purchasers” or a similar term is employed
herein, it shall mean the consent of a Majority in Interest. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default
or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.
5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of each Purchaser. Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser
assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
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 4.7.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought
against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If
either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then in addition to
the obligations of the Company under Section 4.7, the prevailing party in such action, suit or proceeding shall be reimbursed by
the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities at the Closings
for the applicable statute of limitations.
5.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser
may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights.
5.14 Replacement
of Securities. If any certificate or instrument evidencing any of the Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon surrender and 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, destruction, or mutilation, and of the ownership of such Security.
The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including
customary indemnity and bonds) associated with the issuance of such replacement Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree
that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in
the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
5.17 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the
performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereof or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated
by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary
for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to
provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in
this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company
and the Purchasers collectively and not between and among the Purchasers.
5.18 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other
amounts due thereunder have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been canceled.
5.19 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.
5.20 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.
5.21 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY,
THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
5.22 Equitable
Adjustment. Trading volume amounts, price/volume amounts and similar figures in the Transaction Documents shall be equitably
adjusted (but without duplication) to offset the effect of stock splits, similar events and as otherwise described in this Agreement,
if such events shall occur between the date of this Agreement and Closing.
(Signature Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
|
DATARAM
Corporation
|
Address for Notice: |
|
By:__________________________________________
Name:
Title:
|
|
|
With a copy to (which shall not constitute
notice):
|
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGE TO DATARAM Corporation
SUBSCRIPTION
AGREEMENT]
IN WITNESS WHEREOF,
the undersigned have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of the
date first indicated above.
Name of Purchaser: _____________________________________________________________
Signature of Authorized Signatory of Purchaser:
______________________________________
Name of Authorized Signatory: ____________________________________________________
Title of Authorized Signatory: _____________________________________________________
Email Address of Authorized Signatory: _____________________________________________
Facsimile Number of Authorized Signatory: ___________________________________________
Address for Notice to Purchaser:
Address for Delivery of Securities to Purchaser
(if not same as address for notice):
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Subscription Amount: US$________________
Common Stock: ___________________ Shares
EIN Number, if applicable, will be provided
under separate cover: ________________________
[SIGNATURE PAGES CONTINUE]
EXHIBIT A
EXHIBIT B
FORM OF LEGAL OPINION
[SEE ATTACHED]
EXHIBIT C
ACCREDITED INVESTOR QUESTIONNAIRE
IN CONNECTION WITH INVESTMENT IN COMMON STOCK
OF DATARAM CORPORATION, A NEW JERSEY CORPORATION
PURSUANT TO SECURITIES PURCHASE AGREEMENT
DATED ______, 2015
TO: Dataram Corporation
Route 571, P.O. Box 7258
Princeton, NJ 08543
INSTRUCTIONS
PLEASE ANSWER ALL
QUESTIONS. If the appropriate answer is “None” or “Not Applicable”, so state. Please print or type your
answers to all questions. Attach additional sheets if necessary to complete your answers to any item.
Your answers will
be kept strictly confidential at all times. However, Dataram Corporation (the “Company”) may present this Questionnaire
to such parties as it deems appropriate in order to assure itself that the offer and sale of securities of the Company will not
result in a violation of the registration provisions of the Securities Act of 1933, as amended, or a violation of the securities
laws of any state.
1. Please provide the following information:
Name: _______________________________________________________________________________________
Name of additional purchaser: ____________________________________________________________________
(Please complete information in Question 5)
Date of birth, or if other than an individual, year of organization
or incorporation:
_____________________________________________________________________________________________
_____________________________________________________________________________________________
2. Residence address, or if other than an
individual, principal office address:
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
Telephone number: ______________________________________________________________________________
Social Security Number: __________________________________________________________________________
Taxpayer Identification Number: ____________________________________________________________________
3. Business address: _____________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
Business telephone number: _______________________________________________________________________
4. Send mail to: Residence
_____ Business _____
5. With respect to tenants in common, joint
tenants and tenants by the entirety, complete only if information differs from that above:
Residence address: _____________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
Telephone number: ______________________________________________________________________________
Social Security Number: __________________________________________________________________________
Taxpayer Identification Number: ____________________________________________________________________
Business address: _______________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
Business telephone number: _______________________________________________________________________
Send mail to: Residence
_____ Business _____
6. Please describe
your present or most recent business or occupation and indicate such information as the nature of your employment, how long you
have been employed there, the principal business of your employer, the principal activities under your management or supervision
and the scope (e.g. dollar volume, industry rank, etc.) of such activities:
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
7. Please state whether
you (i) are associated with or affiliated with a member of the Financial Industry Regulatory Association, Inc. (“FINRA”),
(ii) are an owner of stock or other securities of FINRA member (other than stock or other securities purchased on the open market),
or (iii) have made a subordinated loan to any FINRA member:
If you answered yes to any of (i) –
(iii) above, please indicate the applicable answer and briefly describe the facts below:
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
8A. Applicable to Individuals
ONLY. Please answer the following questions concerning your financial condition as an “accredited investor” (within
the meaning of Rule 501 of Regulation D). If the purchaser is more than one individual, each individual must initial an answer
where the question indicates a “yes” or “no” response and must answer any other question fully, indicating
to which individual such answer applies. If the purchaser is purchasing jointly with his or her spouse, one answer may be indicated
for the couple as a whole:
8.1 Does your net worth* (or joint net worth
with your spouse) exceed $1,000,000?
8.2 Did you have an
individual income** in excess of $200,000 or joint income together with your spouse in excess of $300,000 in each of the two most
recent years and do you reasonably expect to reach the same income level in the current year?
8.3 Are you an executive officer of the
Company?
* For purposes hereof, net worth shall
be deemed to include ALL of your assets, liquid or illiquid MINUS any liabilities.
** For purposes hereof, the term “income”
is not limited to “adjusted gross income” as that term is defined for federal income tax purposes, but rather includes
certain items of income which are deducted in computing “adjusted gross income”. For investors who are salaried employees,
the gross salary of such investor, minus any significant expenses personally incurred by such investor in connection with earning
the salary, plus any income from any other source including unearned income, is a fair measure of “income” for purposes
hereof. For investors who are self-employed, “income” is generally construed to mean total revenues received during
the calendar year minus significant expenses incurred in connection with earning such revenues.
8.B Applicable to Corporations, Partnerships,
Trusts, Limited Liability Companies and other Entities ONLY:
The purchaser is an accredited investor
because the purchaser falls within at least one of the following categories (Check all appropriate lines):
| ___ | (i) a bank as defined in Section 3(a)(2) of the Act or a savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; |
| ___ | (ii) a broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934,
as amended; |
| ___ | (iii) an insurance company as defined in Section 2(13) of the Act; |
| ___ | (iv) an investment company registered under the Investment Company Act of 1940, as amended (the
“Investment Act”) or a business development company as defined in Section 2(a)(48) of the Investment Act; |
| ___ | (v) a Small Business Investment Company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958, as amended; |
| ___ | (vi) a plan established and maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the benefit of its employees, where such plan has total assets in
excess of $5,000,000; |
| ___ | (vii) an employee benefit plan within the meaning of Title 1 of the Employee Retirement Income
Security Act of 1974, as amended (the “Employee Act”), where the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of the Employee Act, which is either a bank, savings and loan association, insurance company, or registered
investment adviser, or an employee benefit plan that has total assets in excess of $5,000,000, or a self-directed plan the investment
decisions of which are made solely by persons that are accredited investors; |
| ___ | (viii) a private business development company, as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940, as amended; |
| ___ | (ix) an organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation,
a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the securities offered,
with total assets in excess of $5,000,000; |
| ___ | (x) a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of
acquiring the securities offered, whose purchase is directed by a “sophisticated” person, as described in Rule 506(b)(2)(ii)
promulgated under the Act, who has such knowledge and experience in financial and business matters that he or she is capable of
evaluating the merits and risks of the prospective investment; |
| ___ | (xi) an entity in which all of the equity investors are persons or entities described above (“accredited
investors”). ALL EQUITY OWNERS MUST COMPLETE “EXHIBIT A” ATTACHED HERETO. |
9.A Do you have sufficient
knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks associated with
investing in the Company?
ANSWER QUESTION 9B ONLY IF THE ANSWER TO QUESTION 9A WAS
“NO.”
9.B If the answer to
Question 9A was “NO,” do you have a financial or investment adviser (a) that is acting in the capacity as a purchaser
representative and (b) who has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating
the merits and risks associated with investing in the Company?
If you have a financial or investment
adviser(s), please identify each such person and indicate his or her business address and telephone number in the space below.
(Each such person must complete, and you must review and acknowledge, a separate Purchaser Representative Questionnaire which will
be supplied at your request).
_____________________________________________________________________________________________
_____________________________________________________________________________________________
10. You have the right, will be afforded
an opportunity, and are encouraged to investigate the Company and review relevant factors and documents pertaining to the officers
of the Company, and the Company and its business and to ask questions of a qualified representative of the Company regarding this
investment and the properties, operations, and methods of doing business of the Company.
Have you or has your purchaser representative,
if any, conducted any such investigation, sought such documents or asked questions of a qualified representative of the Company
regarding this investment and the properties, operations, and methods of doing business of the Company?
If so, briefly describe: __________________________________________________________________________
_____________________________________________________________________________________________
If so, have you completed your investigation
and/or received satisfactory answers to your questions?
11. Do you understand the nature of an investment in the
Company and the risks associated with such an investment?
12. Do you understand that there
is no guarantee of any financial return on this investment and that you will be exposed to the risk of losing your entire investment?
13. Do you understand that this investment is not liquid?
14. Do you have adequate means of
providing for your current needs and personal contingencies in view of the fact that this is not
a liquid investment?
15. Are you aware of the Company’s
business affairs and financial condition, and have you acquired all such information about the Company as you deem necessary and
appropriate to enable you to reach an informed and knowledgeable decision to acquire the Interests?
16. Do you have a “pre-existing
relationship” with the Company or any of the officers of the Company?
(For purposes hereof,
“pre-existing relationship” means any relationship consisting of personal or business contacts of a nature and duration
such as would enable a reasonably prudent investor to be aware of the character, business acumen, and general business and financial
circumstances of the person with whom such relationship exists.)
If so, please name the individual or
other person with whom you have a pre-existing relationship and describe the relationship:
______________________________________________________________________________
______________________________________________________________________________
17. Exceptions to the representations
and warranties made in Section 3.2 of the Securities Purchase Agreement (if no exceptions, write “none” – if
left blank, the response will be deemed to be “none”): ___________________________________________________
_____________________________________________________________________________
Dated: _______________, 2015
If purchaser is one or more individuals (all individuals
must sign):
_____________________________________________________________________________________________
(Type or print name of prospective purchaser)
_____________________________________________________________________________________________
Signature of prospective purchaser
_____________________________________________________________________________________________
Social Security Number
_____________________________________________________________________________________________
(Type or print name of additional purchaser)
_____________________________________________________________________________________________
Signature of spouse, joint tenant, tenant in common or other signature,
if required
_____________________________________________________________________________________________
Social Security Number
Annex A
Definition of Accredited Investor
The securities will
only be sold to investors who represent in writing in the Subscription Agreement that they are accredited investors, as defined
in Regulation D, Rule 501 under the Act which definition is set forth below:
1. A natural person
whose net worth, or joint net worth with spouse, at the time of purchase exceeds $1 million (excluding home); or
2. A natural person
whose individual gross income exceeded $200,000 or whose joint income with that person’s spouse exceeded $300,000 in each
of the last two years, and who reasonably expects to exceed such income level in the current year; or
3. A trust with total
assets in excess of $5 million, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person described in Regulation D; or
4. A director or executive
officer of the Company; or
5. The investor is
an entity, all of the owners of which are accredited investors; or
6. (a) bank as defined
in Section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the
Act, (b) any broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, (c) an insurance Company
as defined in Section 2(13) of the Act, (d) an investment Company registered under the Investment Company Act of 1940 or a business
development Company as defined in Section 2(a)(48) of such Act, (e) a Small Business Investment Company licensed by the United
States Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, (f) an employee
benefit plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or
its political subdivisions, if such plan has total assets in excess of $5 million, (g) an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Securities Act of 1974, and the employee benefit plan has assets in excess of $5 million,
or the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, that is either a bank, savings
and loan institution, insurance Company, or registered investment advisor, or, if a self-directed plan, with an investment decisions
made solely by persons that are accredited investors, (h) a private business development company as defined in Section 202(a)(22)
of the Investment Advisers Act of 1940, or (i) an organization described in Section 501(c)(3) of the Internal Revenue code, corporation,
Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered,
with assets in excess of $5 million.
EXHIBIT “A” TO ACCREDITED
INVESTOR QUESTIONNAIRE
ACCREDITED CORPORATIONS, PARTNERSHIPS,
LIMITED LIABILITY COMPANIES, TRUSTS OR OTHER ENTITIES INITIALING QUESTION 8B(xi) MUST PROVIDE THE FOLLOWING INFORMATION.
I hereby certify that set forth below
is a complete list of all equity owners in __________________ [NAME OF ENTITY], a
[TYPE OF ENTITY] formed pursuant to the laws of the State of
. I also certify that EACH SUCH OWNER HAS INITIALED THE SPACE OPPOSITE HIS OR HER NAME and that each such owner understands
that by initialing that space he or she is representing that he or she is an accredited individual investor satisfying the test
for accredited individual investors indicated under “Type of Accredited Investor.”
| |
__________________________________________ |
| |
signature of authorized corporate officer, general partner or trustee |
| Name of Equity Owner |
Type of Accredited Investor[1] |
1. ___________________________________________________________________________________________
2. ___________________________________________________________________________________________
3. ___________________________________________________________________________________________
4. ___________________________________________________________________________________________
5. ___________________________________________________________________________________________
6. ___________________________________________________________________________________________
7. ___________________________________________________________________________________________
8. ___________________________________________________________________________________________
9. ___________________________________________________________________________________________
10. __________________________________________________________________________________________
___________________
[1] Indicate
which Subparagraph of 8.1 - 8.3 the equity owner satisfies.
RULE 506 BAD ACTOR DISQUALIFICATION QUESTIONNAIRE
| ____________________________________ |
______________ ___, 2015 |
| Name |
|
Dataram Corporation (the
“Company”) is about to close a private placement of Common Stock pursuant to the terms of a Securities Purchase Agreement.
Under an SEC Rule effective September 23, 2013, the Company is requesting each director and executive officer to complete and execute
this questionnaire. Please answer yes or no to all questions listed below.
|
DEFINITION OF PROMOTERS
Under the Securities Act of 1933 (the “Act”)
Rule 405 defines a promoter as any person—individual or legal entity—that either alone or with others, directly or
indirectly takes initiative in founding the business or enterprise of the issuer, or, in connection with such founding or organization,
directly or indirectly receives 10% or more of any class of issuer securities or 10% or more of the proceeds from the sale of any
class of issuer securities (other than securities received solely as underwriting commissions or solely in exchange for property).
The test considers activities “alone or together with others, directly or indirectly”; therefore, the result does not
change if there are other legal entities (which may themselves be promoters) in the chain between that person and the issuer.
DEFINITION OF INVESTMENT MANAGERS AND PRINCIPALS OF
POOLED INVESTMENT FUND ISSUERS
For issuers that are pooled investment funds, the rule
covers investment advisers and other investment managers of the fund; the directors, general partners, managing members, executive
officers and other officers participating in the offering of such investment managers; and the directors, executive officers and
other officers participating in the offering of the investment managers’ general partners or managing members.
DEFINITION OF COMPENSATED SOLICITORS
Persons compensated for soliciting
investors as well as their directors, general partners, managing members, executive officers and officers participating in the
offering. This category covers any persons compensated for soliciting investors but will typically involve broker-dealers
and other intermediaries.
DEFINITION OF DIRECTORS, GENERAL PARTNERS AND MANAGING
MEMBERS OF THE ISSUER
Members of the Board of Directors
(for issuers that are corporations), general partners (for issuers that are partnerships) and managing members (for issuers that
are limited liability companies).
DEFINITION OF EXECUTIVE OFFICERS
AND PARTICIPATING OFFICERS OF THE ISSUER
The term “executive officer”
means a company’s president, any vice president in charge of a principal business unit, division or function (such as sales,
administration or finance), any other officer who performs a policy-making function or any other person who performs similar policy-making
functions. The term “officer” means a president, vice president, secretary, treasurer or principal financial officer,
comptroller or principal accounting officer, as well as any person who routinely performs corresponding functions. Participation
in an offering would have to be more than transitory or incidental involvement, and could include activities such as participation
or involvement in due diligence activities, involvement in the preparation of disclosure documents, and communication with the
issuer, prospective investors or other offering participants.
DEFINITION OF 20% BENEFICIAL OWNERS OF THE ISSUER
Beneficial owners of 20% or more
of the issuer’s outstanding equity securities, calculated on the basis of total voting power rather than on the basis of
ownership of any single class of securities.
NOTE ON REFERENCES TO THE COMPANY
All references to the Company made herein include
its predecessors and affiliated issuers. |
1. Criminal
Convictions: Within the past 10 years (or five years, in the of case the Company), have you or the Company been convicted of
any felony or misdemeanor
(a) In connection
with the purchase or sale of a security
YES ___ NO
___
(b) Involving the
making of a false filing with the Securities and Exchange Commission (the “SEC”)
YES ___ NO
___
(c) Arising out
of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor
of purchasers of securities.
YES ___ NO
___
2. Court injunctions
and restraining orders: Within the past five years, have you or the Company been the subject of a court injunction or
restraining order
(a) In connection
with the purchase or sale of a security
YES ___ NO
___
(b) Involving the
making of a false filing with the SEC
YES ___ NO
___
(c) Arising out
of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor
of purchasers of securities.
YES ___ NO
___
3. Final orders
of certain state and federal regulators: Have you or the Company been the subject of any final orders of state regulators of
securities, insurance, banking, savings associations or credit unions; federal banking agencies; the Commodity Futures Trading
Commission and the National Credit Union Administration that
(a) Bar you or
the Company from associating with a regulated entity, engaging in the business of securities, insurance or banking, or engaging
in savings association or credit union activities or
YES ___ NO
___
(b) Are based on a
violation of a law or regulation that prohibits fraudulent, manipulative, or deceptive conduct and were issued within the last
10 years
YES ___ NO
___
4. SEC disciplinary
orders: Are you or the Company currently the subject of any SEC disciplinary orders relating to brokers, dealers, municipal
securities dealers, investment companies, and investment advisers and their associated persons under Section 15(b) or 15B(c) of
the Securities Exchange Act of 1934, or Section 203(e) or (f) of the Investment Advisers Act that
(a) Suspends
or revokes your or the Company’s registration as a broker, dealer, municipal securities dealer or investment adviser
YES ___ NO ___
(1) Places limitations
on your or the Company’s activities, functions or operations
YES ___ NO ___
(2) Bars you or the
Company from being associated with any entity or from participating in the offering of any penny stock
YES ___ NO ___
5. SEC cease-and-desist
orders: Within the last five years, have you or the Company been the subject of SEC orders to cease and desist from committing
or causing a violation or future violations of
(a) The scienter-based
anti-fraud provisions of the federal securities laws
YES ___ NO
___
(b) Section 5 of the
Act
YES ___ NO
___
6. Suspension
or expulsion from membership in an SRO or from association with an SRO member: Have you or the Company been suspended or expelled
from membership in, or suspended or barred from association with a member of, a securities self-regulatory organization or “SRO”
(i.e., a registered national securities exchange or national securities association, such as FINRA) for any act or omission
to act constituting conduct inconsistent with just and equitable principles of trade.
YES ___ NO
___
7. SEC stop
orders:
(a) Within the last
five years, have you, as an officer or director of an issuer, or the Company filed a registration statement or Regulation A offering
statement that was the subject of a SEC refusal order, stop order or order suspending the Regulation A exemption, or are you now
the subject of an investigation or proceeding to determine whether such an order should be issued.
YES ___ NO
___
(b) Within the last
five years, have you or the Company been, or been named as, an underwriter of securities under a registration statement or Regulation
A offering statement that was the subject of a Commission refusal order, stop order or order suspending the Regulation A exemption,
or are you now the subject of an investigation or proceeding to determine whether such an order should be issued.
YES ___ NO
___
8. U.S. Postal Service
false representation orders: Within the last five years have you or the Company been subject to a U. S Postal Service false
representation order, temporary restraining order or preliminary injunction with respect to conduct alleged by the U.S. Postal
Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations.
YES ___ NO
___
The foregoing answers are
true and correct in all respects. I understand that a “yes” answer will disqualify the issuer from relying on exemption
under Rule 506 under the Securities Act of 1933.
| |
Dated: ____________________, 2015 |
__________________________ |
| |
|
Signature |
