UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
June 25, 2014
Date of Report (Date of earliest event reported)
iHookup Social, Inc.
f/k/a Titan Iron Ore Corp.
(Exact name of registrant as specified in its
charter)
| Nevada |
000-52917 |
98-0546715 |
| (State or other jurisdiction |
(Commission |
(IRS Employer |
| of incorporation) |
File Number) |
Identification No.) |
125 E. Campbell Ave., Campbell, California
95008
(Address of principal executive offices) (Zip
Code)
(855) 473-7473
Registrant’s telephone number, including
area code
Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Investment Agreement, Registration Rights
Agreement and Escrow Agreement with Beaufort Capital Partners LLC
As of June 25, 2014,
iHookup Social, Inc. (the “Company”) entered into an Investment Agreement (the “Investment Agreement”)
with Beaufort Capital Partners LLC (“Beaufort”), pursuant to which the Company may issue and sell to Beaufort
Two Million Five Hundred Thousand Dollars ($2,500,000) of the Company’s fully registered, freely tradable common stock (the
“Shares”). The parties also entered into a Registration Rights Agreement dated June 25, 2014, whereby the Company
has agreed to provide certain registration rights under the Securities Act of 1933, as amended (the “Securities Act”),
and applicable state laws (the “Registration Agreement”, and together with the Investment Agreement, the “Agreements”).
Pursuant to the Agreements, the Company shall register the Shares pursuant to a registration statement on Form S-1 (or on such
other form as is available to the Company within 21 days of the execution of the Agreements) (the “Registration Statement”).
The Company shall reserve thirty million (30,000,000) shares of its common stock for the above issuance.
Subject to the terms
and conditions of the Investment Agreement, the Company, at its sole and exclusive option, may issue and sell to Beaufort, and
Beaufort shall purchase from the Company, the Shares upon the Company’s delivery of written notices to Beaufort. The
aggregate maximum amount of all purchases that Beaufort shall be obligated to make under the Investment Agreement shall not exceed
$2,500,000. Once a written notice is received by Beaufort, it shall not be terminated, withdrawn or otherwise revoked by
the Company.
The amount for each
purchase of the Shares as designated by the Company in the applicable notices shall not be more than (i) two hundred percent (200%)
of the average trading volume of the Company’s common stock of the ten (10) trading days prior to the date of delivery of
the written notice by the Company to Beaufort, or (ii) the number of Shares which would cause the aggregate holdings of Beaufort
shares of common stock of the Company to be greater than 4.99% of the issued and outstanding shares of common stock of the Company.
The purchase price
for the Shares to be paid by Beaufort shall be eighty percent (80%) of the average of the three (3) lowest closing daily prices
of the Company’s common stock during the five (5) consecutive trading days prior to the date of the notice from the
Company to Beaufort. During such five (5) consecutive trading day period, the Company shall not subdivide or combine its common
stock, or pay a common stock dividend or make any other purchase of its common stock.
During the term of
the Investment Agreement (36 months unless sooner terminated), the Company shall not enter into any purchase or sale of future
priced securities of any type whatsoever that are, or may become, convertible or exchangeable into shares of its common stock pursuant
to any equity line financing registered with the Securities Exchange Commission (“SEC”) on a Form S-1.
Also, during such
term, the Company shall not enter into, amend, modify, or permit any transaction or arrangement with any of its officers, directors,
persons who were officers or directors at any time during the previous two years, shareholders (and any of their family members)
who beneficially own 5% or more of the common stock, or affiliates, except for (i) customary employment arrangements and benefit
programs on reasonable terms, (ii) any arms-length agreement or transaction on terms no less favorable than terms which would have
been obtainable rom a disinterested third party, or (iii) any transaction or arrangement approved by a majority of the disinterested
directors of the Company.
The parties have also
entered into an Escrow Agreement dated June 25, 2014, whereby Beaufort agreed to provide the legal expenses necessary to file the
Registration Statement. In return, the Company has agreed to deposit 3,000,000 shares of its common stock (the “Escrow
Shares”) into an escrow account. In the event the SEC declares the Registration Statement to be effective, the Escrow
Shares will be returned to the Company. However, in the event of a breach of any material term of the Agreements, or the SEC rejects
the Registration Statement, or the Company withdraws the Registration Statement prior to its effectiveness, the Escrow Shares will
be delivered to Beaufort.
The
foregoing description is qualified in its entirety by reference to the Agreements and Escrow Agreement, which are filed herewith
as Exhibits 10.69, 10.70 and 10.71 and incorporated herein by reference.
Item 3.02 Unregistered Sales of
Equity Securities.
See the disclosure under Item 1.01 of this
current report on Form 8-K.
Item 9.01 Financial Statements
and Exhibits.
| Exhibit Number |
Exhibit |
| 10.69* |
Investment Agreement dated June 25, 2014 by and between Beaufort Capital Partners LLC and iHookup Social Inc. |
| 10.70* |
Registration Rights Agreement dated June 25, 2014 by and between Beaufort Capital Partners LLC and iHookup Social, Inc. |
| 10.71* |
Escrow Agreement dated June 25, 2014 by and among iHookup Social, Inc., Beaufort Capital Partners LLC and Matthew McMurdo, Esq. |
| * Filed herewithin. |
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
|
iHookup Social, Inc. |
|
| Date: June 30, 2014 |
|
|
|
| |
|
By: /s/ Robert Rositano |
|
| |
|
|
|
| |
|
Robert Rositano |
|
| |
|
CEO |
|
EX 10.69
INVESTMENT AGREEMENT
THIS
AGREEMENT dated as of the 25th day of June 2014 (the “Agreement”) is by and between Beaufort
Capital Partners LLC (the “Investor”), and iHookup Social, Inc. (the “Company”).
WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the
Investor, from time to time as provided herein, and the Investor shall purchase from the Company up to Two Million Five Hundred
Thousand Dollars ($2,500,000) of the Company’s fully registered, freely tradable common stock (the “Common Stock”);
and
WHEREAS,
such investments will be made in reliance upon the provisions of the Securities Act of 1933, as amended, and the regulations
promulgated thereunder (the “Securities Act”), and or upon such other exemption from the registration requirements
of the Securities Act as may be available with respect to any or all of the investments to be made hereunder.
NOW, THEREFORE,
the parties hereto agree as follows:
ARTICLE I.
Certain Definitions
Section 1.1.
“Advance” shall mean the portion of the Commitment Amount requested by the Company in the Advance Notice.
Section 1.2.
“Advance Date” shall mean the fifth Trading Day after expiration of the applicable Pricing Period for each Advance.
Section 1.3.
“Advance Notice” shall mean a written notice in the form of Exhibit A attached hereto to the Investor
executed by an officer of the Company and setting forth the Advance amount that the Company requests from the Investor. An Advance
Notice cannot be sent if a prior Advance has not yet been completed. No Advance Notice can be delivered by the Company on a day
which is not a Trading Day.
Section 1.4.
[Intentionally Blank]
Section
1.5. “Advance Shares” shall mean the shares of Common Stock issued and sold to the Investor pursuant to an Advance
Notice under the terms and conditions hereof.
Section
1.6. “Average Daily Trading Volume” means the average trading volume of the Common Stock of the ten Trading
Days prior to the date of delivery of the Advance.
Section 1.7
Reserved.
Section 1.8.
“Closing Daily Price” means, as related to the Common Stock as of any date, the last closing price for such
security during normal trading on the OTCQB, or, if the OTCQB is not the principal securities exchange or trading market for such
security, the last closing bid price during normal trading of such security on the principal securities exchange or trading market
where such security is listed or traded as reported by such principal securities exchange or trading market, or if the foregoing
do not apply, the last closing bid price during normal trading of such security in the over-the-counter market on the electronic
bulletin board for such security, or, if no closing bid price is reported for such security, the average of the bid prices of any
market makers for such security as reported in the "pink sheets" by the Pink OTC Markets, Inc. If the closing
bid price cannot be calculated for such security on such date on any of the foregoing bases, the closing bid price of such security
on such date shall be the fair market value as mutually determined by the Company and the Investor. If the Company and
the Investor are unable to agree upon the fair market value of the Common Stock, then such dispute shall be resolved by an investment
banking firm mutually acceptable to the Company and the Investor in this offering and any fees and costs associated therewith shall
be paid by the Company and the Investor, equally.
Section 1.9.
“Closing” shall mean one of the closings of a purchase and sale of Common Stock pursuant to Section 2.3.
Section 1.10.
“Commitment Amount” shall mean the aggregate amount of Two Million Five Hundred Thousand Dollars ($2,500,000)
which the Investor has agreed to provide to the Company in order to purchase the Common Stock pursuant to the terms and conditions
of this Agreement.
Section 1.11.
“Commitment Period” shall mean the period commencing on the Effective Date, and expiring upon the termination
of this Agreement in accordance with Section 10.2.
Section 1.12.
“Common Stock” shall mean the Company’s freely tradable, fully registered and unencumbered common stock.
Section 1.13.
“Condition Satisfaction Date” shall have the meaning set forth in Section 7.2.
Section 1.14.
“Damages” shall mean any loss, claim, damage, liability, costs and expenses (including, without limitation,
reasonable attorney’s fees and disbursements and costs and expenses of expert witnesses and investigation).
Section 1.15.
“Effective Date” shall mean the date on which the SEC first declares effective a Registration Statement registering
the resale of the Registrable Securities as set forth in Section 7.2(a).
Section 1.16.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
Section 1.17.
“Environmental Laws” shall have the meaning set forth in Section 4.11.
Section 1.18. “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Section
1.19. “Evaluation Date” shall have the meaning set forth in Section 4.30.
Section
1.20. [Intentionally Omitted]
Section
1.21. “Indemnified Liabilities” shall have the meaning set forth in Section 5.1(a).
Section
1.22. “Indemnified Party” and “Indemnifying Party” shall have the meaning set forth in Section
5.2.
Section
1.23. “Investor Indemnitees” shall have the meaning set forth in Section 5.1(a).
Section
1.24. “Losses” shall have the meaning set forth in Section 5.1(b).
Section 1.25.
“Material Adverse Effect” shall mean any condition, circumstance, or situation that may result in, or reasonably
be expected to result in (i) a material adverse effect on the legality, validity or enforceability of the Agreement, including
on the legal status of the Advance Shares as free trading, (ii) a material adverse effect on the results of operations, assets,
business or condition (financial or otherwise) of the Company, taken as a whole, (iii) a material adverse effect on the Company’s
ability to perform its obligations hereunder in any material respect on a timely basis its obligations under the Agreement, or
(iv) shares of the Company cease to be listed or trading of the Common Stock is suspended continuously for more than five (5) trading
days.
Section 1.26.
“Market Price” shall mean the average of the 3 lowest Closing Daily Prices of the Company’s Common Stock
during the Pricing Period.
Section 1.27.
“Maximum Advance Amount” The number of Advance Shares sold in each Advance shall not be greater than either
(i) two hundred percent (200%) of the Average Daily Trading Volume, or (ii) the number of shares of Common Stock which would cause
the aggregate holdings of the Investor’s shares of common stock of the Company to be greater than 4.99% of the issued and
outstanding shares of common stock of the Company (including Common Stock and shares of restricted common stock).
Section
1.28. “Maximum Common Stock Issuance” shall have the meaning set forth in Section 2.2.
Section
1.29. “Ownership Limitation” shall have the meaning set forth in Section 2.2.
Section 1.30.
“Person” shall mean an individual, a corporation, a partnership, an association, a trust or other entity or
organization, including a government or political subdivision or an agency or instrumentality thereof.
Section 1.31.
“Pricing Period” shall mean the five (5) consecutive Trading Days prior to the Advance Date.
Section 1.32.
“Principal Market” shall mean the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital
Market, the American Stock Exchange, the OTCQB, or the New York Stock Exchange, whichever is at the time the principal trading
exchange or market for the Common Stock.
Section 1.33.
“Purchase Price” shall mean eighty percent (80%) of the Market Price during the Pricing Period.
Section 1.34.
“Registrable Securities” shall mean the Advance Shares to be issued hereunder (i) in respect of which a
Registration Statement has not been declared effective by the SEC, (ii) which have not been sold under circumstances meeting
all of the applicable conditions of Rule 144 or (iii) which have not been otherwise transferred to a holder who may trade
such Advance Shares without restriction under the Securities Act, and the Company has delivered a new certificate or other evidence
of ownership for such securities not bearing a restrictive legend.
Section
1.35. “Registration Limitation” shall have the meaning set forth in Section 2.2.
Section 1.36.
“Registration Rights Agreement” shall mean the Registration Rights Agreement dated the date hereof, regarding
the filing of the Registration Statement for the resale of the Registrable Securities, entered into between the Company and the
Investor.
Section 1.37.
“Registration Statement” shall mean a registration statement on Form S-1 or Form S-3 (if use of such form is
then available to the Company pursuant to the rules of the SEC and, if not, on such other form promulgated by the SEC for which
the Company then qualifies and which counsel for the Company shall deem appropriate, and which form shall be available for the
resale of the Registrable Securities to be registered thereunder in accordance with the provisions of this Agreement and the Registration
Rights Agreement, and in accordance with the intended method of distribution of such securities), for the registration of the resale
by the Investor of the Registrable Securities under the Securities Act.
Section 1.38.
“Regulation D” shall mean Regulation D under the Securities Act.
Section
1.39. “Related Party” shall have the meaning set forth in Section 6.15.
Section
1.40. “Rule 144” shall mean Rule 144 (or any similar provision then in force) promulgated under the Securities
Act.
Section 1.41.
“SEC” shall mean the United States Securities and Exchange Commission.
Section 1.42.
“Securities Act” shall have the meaning set forth in the recitals.
Section
1.43. “Third Party Claim” shall have the meaning set forth in Section 5.2(b).
Section 1.44.
“Trading Day” shall mean any day during which the New York Stock Exchange shall be open for business.
Section 1.45.
“Valuation Event” shall have the meaning set forth in Section 2.10.
Section 1.46.
“Trading Day” shall mean any day during which the New York Stock Exchange shall be open for business.
Section 1.47.
“VWAP” means, as of any date, the daily dollar volume-weighted average price for such security as reported by
Bloomberg, LP through its “Historical Price Table Screen (HP)” with Market: Weighted Average function selected (or
comparable financial news service (U.S market only)), or, if no dollar volume-weighted average price is reported for such security
by Bloomberg, LP (or comparable financial news service (U.S market only)), the average of the highest closing bid price and the
lowest closing ask price of any of the market makers for such security as reported on OTC Markets.
ARTICLE II.
Advances
Section 2.1.
Advances. Subject to the terms and conditions of this Agreement (including, without limitation, the provisions of Article VII
hereof), the Company, at its sole and exclusive option, may issue and sell to the Investor, and the Investor shall purchase from
the Company, Advance Shares, by the delivery, in the Company’s sole discretion, of Advance Notices. The aggregate maximum
amount of all Advances that the Investor shall be obligated to make under this Agreement shall not exceed the Commitment Amount.
Once an Advance Notice is received by the Investor, it shall not be terminated, withdrawn or otherwise revoked by the Company except
as set forth in this Agreement. In the Event the Company fails to issue an Advance Notice within eighteen (18) months of the Registration
Statement being decalred effective by the SEC, the Company shall pay to the Investor an amount in cash equal to the Registration
Fees (as defined in Section 12.4 below).
Section 2.2. Mechanics.
(a)
Advance Notice. At any time during the Commitment Period, the Company may require the Investor to purchase Advance Shares
by delivering an Advance Notice to the Investor, subject to the conditions set forth in Article VII; provided, however, that (i)
the amount for each Advance as designated by the Company in the applicable Advance Notice shall not be more than the Maximum Advance
Amount , (ii) the aggregate amount of the Advances pursuant to this Agreement shall not exceed the Commitment Amount, (iii) in
no event shall the number of Advance Shares issuable to the Investor pursuant to an Advance cause the aggregate number of shares
of Common Stock beneficially owned by the Investor and its affiliates to exceed 4.99% of the then outstanding Common Stock (the
“Ownership Limitation”) (as of the date of this Agreement, Investor and its affiliates held zero (0%) percent
of the outstanding Common Stock), (iv) under no circumstances shall the aggregate offering price or number of Advance Shares, as
the case may be, exceed the aggregate offering price or number of shares of Common Stock available for issuance under a Registration
Statement (the “Registration Limitation”) and (v) the Common Stock must be DWAC eligible and sent to the Investor
in electronic form, instead of certificate form. In the event that the Investor sends written acceptance of accepting a physical
certificate, all fees and expenses for this certificate will be paid by the Company.
(b)
Date of Delivery of Advance Notice. An Advance Notice shall be deemed delivered on (i) the Trading Day it is received
by email (to the address set forth in Section 11.1 herein) by the Investor if such notice is received prior to 5:00 pm Eastern
Time, or (ii) the immediately succeeding Trading Day if it is received by email after 5:00 pm Eastern Time on a Trading Day
or at any time on a day which is not a Trading Day. No Advance Notice may be deemed delivered on a day that is not a Trading Day.
The Company acknowledges and agrees that the Investor shall be entitled to treat any email it receives from officers whose email
addresses are identified by the Company purporting to be an Advance Notice as a duly executed and authorized Advance Notice from
the Company.
Section 2.3.
Closings.
(a)
On the Advance Date, the Company shall deliver to the Investor’s brokerage account in electronic form, such number of Advance
Shares of the DWAC eligible Common Stock registered in the name of the Investor in accordance with the Advance Notice and pursuant
to this Agreement. Once such Advance Shares have been accepted by the Investor, the Investor shall immediately deliver to the Company
the amount of the Advance by wire transfer of immediately available funds as determined by the Purchase Price. On or prior to the
Advance Date, each of the Company and the Investor shall deliver to the other all documents, instruments and writings required
to be delivered by either of them pursuant to Section 2.3(b) below in order to implement and effect the transactions contemplated
herein.
(b)
Obligations Upon Closing. The Investor agrees to advance the amount corresponding to the Advance Notice to the Company upon
completion of each of the following conditions:
(i) The
Company shall have delivered via electronic delivery to the Investor the Advance Shares applicable to the Advance in accordance
with Section 2.3(a).
(ii) A
Registration Statement filed pursuant to the Registration Rights Agreement shall be effective and available for the resale of all
applicable Advance Shares to be issued in connection with the Advance and any certificates evidencing such shares shall be free
of restrictive legends.
(iii) the
Company shall have obtained all material permits and qualifications required by any applicable state for the offer and sale of
the Registrable Securities, or shall have the availability of exemptions therefrom. The sale and issuance of the Registrable Securities
shall be legally permitted by all laws and regulations to which the Company is subject;
(iv) the
Company shall have filed with the SEC in a timely manner all reports, notices and other documents required of a “reporting
company” under the Exchange Act and applicable SEC regulations; and
(v) the
Company’s transfer agent shall be DWAC eligible.
Section 2.4.
[Intentionally Omitted]
Section 2.5.
Hardship. In the event the Investor sells shares of the Advance Shares after receipt of an Advance Notice and the Company
fails to perform the obligations mandated in Section 2.3, which are within the sole control of the Company, the Company agrees
that in addition to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other
remedy to which the Investor is entitled at law or in equity, including, without limitation, specific performance, it will hold
the Investor harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred,
arising out of or in connection with such default by the Company and acknowledges that irreparable damage would occur in the event
of any such default. It is accordingly agreed that the Investor shall be entitled to an injunction or injunctions to prevent
such breaches of this Agreement and to specifically enforce, without the posting of a bond or other security, the terms and provisions
of this Agreement.
Section
2.6. Removal of Restricted Legends. If the Company is fully reporting six months after the issuance of any restricted stock
to Investor upon a Break Event (as described in Section 12.4 below), and the Company rejects the Investors request to direct the
Company’s transfer agent to remove the restricted legend from the Investor’s stock certificate five trading days after
the Investor’s request to remove such restricted legend. If the Company fails to so instruct the transfer agent wirthin such
time, then the Company shall pay the Investor $1,000.00 for each day beyond the five trading days the Company fails to remove such
restricted legend. Company covenants that, except as set forth below, there shall be no justifiable reason not to remove the restricted
legend from the stock certificates and in the event that Company attempts to offer such justification, the Company shall pay the
Investor $$2,000.00 for each day beyond the five trading days the company fails to remove such restricted legend. Notwithstanding
the foregoing, the Company shall not be liable to pay the Investor either of the above fees if the Investor is not in full compliance
with the applicable rules and regulations used to remove any restricted legend or fails reasonably comply with requests by the
Company or its transfer agent related to the removal of the restricted legend or is otherwise in breach of this Agreement.
Section
2.7 Increase in Commitment Amount. At any time prior to the one year anniversary of
the Effective Date (the “Commitment Increase Date”) the Company may notify the Investor in writing that it wishes
to increase the Commitment Amount (provided that the Company has the ability to register the additional Commitment Amount on the
Registration Statement) effective upon the Commitment Increase Date and the Commitment Amount shall automatically be deemed increased.
Section
2.8 Reimbursement. If (I) the Investor becomes a defendant in any capacity in any legal action or
proceeding brought by any shareholder of the Company, in connection with the alleged breach of duty by the officers or directors
of the Company or a material misstatement made by the Company in connection with its filings made with the SECThe reimbursement
obligations of the Company under this section 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 Investor that are actually named in such action, proceeding
or investigation, and partners, directors, agents, employees, attorneys, accountants, auditors and controlling persons (if any),
as the case may be, of Investor and any such affiliate, and shall be binding upon and inure to the benefit of any successors of
the Company, the Investor and any such affiliate and any such person. Any and all costs that Investor pays for relating to clearing
and processing stock certificates shall be deducted from any payment the Company receives from Investor.
Section 2.9 Overall
Limit on Issuable Common Stock. Notwithstanding anything contained herein to the contrary, if during the Commitment Period
the Company becomes listed on an exchange that limits the number of shares of Common Stock that may be issued without shareholder
approval, then the total number of Advance Shares issuable by the Company and purchasable by the Investor pursuant to this Agreement
shall not exceed that number of shares of Common Stock that may be issuable without shareholder approval (the “Maximum
Common Stock Issuance”). If such issuance of Advance Shares could cause a delisting on the Principal Market, then
the Maximum Common Stock Issuance shall first be approved by the Company's shareholders in accordance with applicable law and the
By-laws and Amended and
Restated Articles of Incorporation of
the Company. The parties understand and agree that the Company's failure to seek or obtain such shareholder approval shall in no
way adversely affect the validity and due authorization of the issuance and sale of Advance Shares in accordance with the terms
and conditions hereof to the Investor or the Investor's obligation in accordance with the terms and conditions hereof to purchase
a number of Advance Shares in the aggregate up to the Maximum Common Stock Issuance limitation, and that such approval pertains
only to the applicability of the Maximum Common Stock Issuance limitation provided in this Section 2.9.
Section 2.10. Valuation
Event. The Company agrees that it shall not take any action that would result in a Valuation Event occurring during a Pricing
Period. Valuation Event shall mean an event in which the Company at any time during a Pricing Period takes any of the following
actions: (i) subdivides or combines its Common Stock or (ii) pays a dividend in Ordinary Shares or makes any other purchase of
its Ordinary Shares.
ARTICLE III.
Representations of Investor
Investor
hereby represents and warrants to, and agrees with, the Company that the following are true and correct as of the date hereof and
as of each Advance Date:
Section 3.1.
Organization and Authorization. The Investor is duly incorporated or organized and validly existing in the jurisdiction
of its incorporation or organization and has all requisite power and authority to purchase and hold the securities issuable hereunder.
The decision to invest and the execution and delivery of this Agreement by such Investor, the performance by such Investor of its
obligations hereunder and the consummation by such Investor of the transactions contemplated hereby have been duly authorized and
requires no other proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and deliver
this Agreement and all other instruments (including, without limitations, the Registration Rights Agreement), on behalf of the
Investor. This Agreement has been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and
acceptance thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against
the Investor in accordance with its terms.
Section 3.2.
Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable
of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and of protecting
its interests in connection with this transaction. It recognizes that its investment in the Company involves a high degree of risk.
Section 3.3.
No Legal Advice from the Company. The Investor acknowledges that it had the opportunity to review this Agreement and the
transactions contemplated by this Agreement with his or its own legal counsel and investment and tax advisors. The Investor is
relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives
or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement
or the securities laws of any jurisdiction.
Section 3.4.
Information. The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to
the business, finances and operations of the Company and information it deemed material to making an informed investment decision.
The Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management and
has either done so or has waived its opportunity to do so. Neither such inquiries nor any other due diligence investigations conducted
by such Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right to rely
on the Company’s representations and warranties contained in this Agreement. The Investor understands that its investment
involves a high degree of risk. The Investor is in a position regarding the Company, which, based upon employment, family relationship
or economic bargaining power, enabled and enables such Investor to obtain information from the Company in order to evaluate the
merits and risks of this investment.
Section 3.5.
Receipt of Documents. The Investor and its counsel have received and read in their entirety: (i) this Agreement and
the Exhibits annexed hereto; (ii) all due diligence and other information necessary to verify the accuracy and completeness
of such representations, warranties and covenants; and (iii) answers to all questions the Investor submitted to the Company
regarding an investment in the Company; and the Investor has relied on the information contained therein and has not been furnished
any other documents, literature, memorandum or prospectus.
Section 3.6.
Not an Affiliate. The Investor is not an officer, director or a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with the Company or any “Affiliate”
of the Company (as that term is defined in Rule 405 of the Securities Act).
Section 3.7.
Trading Activities. The Investor’s trading activities with respect to the Common Stock shall be in compliance with
all applicable securities laws, rules and regulations and the rules and regulations of the Principal Market on which the Common
Stock is listed or traded. Investor makes no representations or covenants that it will not engage in trading in the securities
of the Company, other than the Investor will not engage in any short sales of the Common Stock, or other similar activity that
profits on the decline in the price of Common Stock, at any time during the Agreement. Nothing contained in this Agreement shall
be deemed a representation or warranty by the Investor to hold any Stock for any period of time. The Company acknowledges and agrees
that transactions in its securities by the Investor may impact the market price of the Stock, including during periods when the
prices at which the Company may be required to issue Investor’s stock are determined.
ARTICLE
IV.
Representations
and Warranties of the Company
Except
as stated below, on the disclosure schedules attached hereto the Company hereby represents and warrants to, and covenants with,
the Investor that the following are true and correct as of the date hereof:
Section 4.1.
Organization and Qualification. The Company is duly incorporated or organized and validly existing in the jurisdiction of
its incorporation or organization and has all requisite corporate power to own its properties and to carry on its business as now
being conducted. Each of the Company and its subsidiaries is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect on the Company and
its subsidiaries taken as a whole.
Section 4.2.
Authorization, Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and
authority to enter into and perform this Agreement, the Registration Rights Agreement and any related agreements, in accordance
with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Registration Rights Agreement and
any related agreements by the Company and the consummation by it of the transactions contemplated hereby and thereby, have been
duly authorized by the Company’s Board of Directors and no further consent or authorization is required by the Company, its
Board of Directors or its stockholders, (iii) this Agreement, the Registration Rights Agreement and any related agreements
have been duly executed and delivered by the Company, (iv) this Agreement, the Registration Rights Agreement and assuming
the execution and delivery thereof and acceptance by the Investor and any related agreements constitute the valid and binding obligations
of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of creditors’ rights and remedies.
Section 4.3.
Capitalization. The authorized capital stock of the Company consists of 10,000,000,000 shares of Common Stock, of which
48,064,622 shares of Common Stock are issued and outstanding, and 50,000,000 shares of authorized Preferred Stock, of which 2,500,000
shares are issued and outstanding All of such outstanding shares have been validly issued and are fully paid and nonassessable.
No shares of Common Stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or
permitted by the Company. Except as disclosed on Schedule 4.3, as of the date hereof, (i) there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its subsidiaries, or contracts, commitments, understandings
or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries,
(ii) there are no outstanding debt securities (iii) there are no outstanding registration statements; and (iv) there
are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of
their securities under the Securities Act (except pursuant to the Registration Rights Agreement), except pursuant to the terms
of an agreement between the Company and the Investor. There are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by this Agreement or any related agreement or the consummation of the transactions described
herein or therein. The Company has furnished to the Investor true and correct copies of the Company’s Certificate of Incorporation,
as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s
By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or
exercisable for Common Stock and the material rights of the holders thereof in respect thereto.
Section 4.4.
No Conflict. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby will not (i) result in a violation of the Certificate of Incorporation, any certificate
of designations of any outstanding series of preferred stock of the Company or By-laws or (ii) conflict with or constitute
a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of
its subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including federal
and state securities laws and regulations and the rules and regulations of the Principal Market on which the Common Stock is quoted)
applicable to the Company or any of its subsidiaries or by which any material property or asset of the Company or any of its subsidiaries
is bound or affected and which would cause a Material Adverse Effect. Neither the Company nor its subsidiaries is in violation
of any term of or in default under its Articles of Incorporation or By-laws or their organizational charter or by-laws, respectively,
or any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule
or regulation applicable to the Company or its subsidiaries. The business of the Company and its subsidiaries is not being conducted
in violation of any material law, ordinance, and regulation of any governmental entity. Except as specifically contemplated by
this Agreement and as required under the Securities Act and any applicable state securities laws, the Company is not required to
obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order
for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement or the Registration Rights
Agreement in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which
the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof.
The Company and its subsidiaries are unaware of any fact or circumstance which might give rise to any of the foregoing.
Section 4.5.
SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC under the Securities Exchange Act (all of the foregoing filed prior to the date hereof
or amended after the date hereof and all exhibits include therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to as the “SEC Documents”) on timely basis or
has received a valid extension of such time of filing and has filed any such SEC Document prior to the expiration of any such extension.
The Company has delivered to the Investor or its representatives, or made available through the SEC’s website at http://www.sec.gov.,
true and complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements
of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent
they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).
Section 4.6.
No Misstatement or Omission. Each part of the Registration Statement, when such part became or becomes effective,
and the related prospectus (“Prospectus”), on the date of filing thereof with the SEC and at each Advance Date and
Closing Date, conformed or will conform in all material respects with the requirements of the Securities Act and the rules and
regulations promulgated thereunder; each part of the Registration Statement, when such part became or becomes effective, did not
or will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and the Prospectus, on the date of filing thereof with the SEC and at each Advance
Date, did not or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading; except that the foregoing shall not
apply to statements or omissions in any such document made in reliance on information furnished in writing to the Company by the
Investor expressly stating that such information is intended for use in the Registration Statement, the Prospectus, or any amendment
or supplement thereto.
Section 4.7.
No Default. The Company is not in default in the performance or observance of any material obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust or other material instrument or agreement to which it is a party
or by which it is or its property is bound and neither the execution, nor the delivery by the Company, nor the performance by the
Company of its obligations under this Agreement or any of the exhibits or attachments hereto will conflict with or result in the
breach or violation of any of the terms or provisions of, or constitute a default or result in the creation or imposition of any
lien or charge on any assets or properties of the Company under its Certificate of Incorporation, By-Laws, any material indenture,
mortgage, deed of trust or other material agreement applicable to the Company or instrument to which the Company is a party or
by which it is bound, or any statute, or any decree, judgment, order, rules or regulation of any court or governmental agency or
body having jurisdiction over the Company or its properties, in each case which default, lien or charge is likely to cause a Material
Adverse Effect on the Company’s business or financial condition.
Section 4.8.
Absence of Events of Default. No event of default, as defined in the respective agreement to which the Company is a party,
and no event which, with the giving of notice or the passage of time or both, would become an event of default (as so defined),
has occurred and is continuing, which would have a Material Adverse Effect on the Company’s business, properties, prospects,
financial condition or results of operations. The Company shall notify the Investor immediately upon any event of default, or anything
that is likely to detrimentally affect the ability of the Company to perform its obligations under this Agreement, occurring, or
becoming, to the Company’s knowledge, likely to occur, and include the specifics of such event of default or other event
in its notice. At the Investor’s request, the Company shall provide the Investor with a certificate signed by two (2) of
its directors or its Chief Executive Officer, which shall state whether an event of default has occurred or is continuing.
Section 4.9.
Intellectual Property Rights. The Company and its subsidiaries own or possess adequate rights or licenses to use all material
trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as
now conducted. The Company and its subsidiaries do not have any knowledge of any infringement by the Company or its subsidiaries
of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service
mark registrations, trade secret or other similar rights of others, and, to the knowledge of the Company, there is no claim, action
or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company or its
subsidiaries regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks,
service mark registrations, trade secret or other infringement; and the Company and its subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.
Section 4.10.
Employee Relations. Neither the Company nor any of its subsidiaries is involved in any labor dispute nor, to the knowledge
of the Company or any of its subsidiaries, is any such dispute threatened. None of the Company’s or its subsidiaries’
employees is a member of a union and the Company and its subsidiaries believe that their relations with their employees are good.
Section 4.11.
Environmental Laws. The Company and its subsidiaries are (i) in compliance with any and all applicable material foreign,
federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all
permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such permit, license or approval.
Section 4.12.
Title. The Company has good and marketable title to its properties and material assets owned by it, free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable interest other than such as are not material to the business of
the Company. Any real property and facilities held under lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed
to be made of such property and buildings by the Company and its subsidiaries.
Section 4.13.
Insurance. Upon the Company generating revenue, the Company and each of its subsidiaries will become insured by insurers
of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes
to be prudent and customary in the businesses in which the Company and its subsidiaries are engaged. Neither the Company nor any
such subsidiary has been refused any insurance coverage sought or applied for and neither the Company nor any such subsidiary has
any reason to believe that it will not be able to renew its existing liability insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the earnings, business or operations of the Company and its subsidiaries,
taken as a whole.
Section 4.14.
Regulatory Permits. The Company and its subsidiaries possess all material certificates, authorizations and permits issued
by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses and neither
the Company nor any such subsidiary has received any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.
Section 4.15.
[Intentionally Omitted.]
Section 4.16.
No Material Adverse Breaches, etc. Neither the Company nor any of its subsidiaries is subject to any charter, corporate
or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers
has or is expected in the future to have a Material Adverse Effect on the business, properties, operations, financial condition,
results of operations or prospects of the Company or its subsidiaries. Except as set forth in the SEC Documents, neither the Company
nor any of its subsidiaries is in breach of any contract or agreement which breach, in the judgment of the Company’s officers,
has or is expected to have a Material Adverse Effect on the business, properties, operations, financial condition, results of operations
or prospects of the Company or its subsidiaries.
Section 4.17.
Absence of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending against or affecting the Company, the Common Stock or any of the
Company’s subsidiaries, wherein an unfavorable decision, ruling or finding would (i) have a Material Adverse Effect
on the transactions contemplated hereby (ii) adversely affect the validity or enforceability of, or the authority or ability of
the Company to perform its obligations under, this Agreement or any of the documents contemplated herein, or (iii) have a Material
Adverse Effect on the business, operations, properties, financial condition or results of operation of the Company and its subsidiaries
taken as a whole.
Section 4.18.
Reserved.
Section 4.19.
Tax Status. The Company and each of its subsidiaries has made or filed all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject and (unless and only to the extent that the Company
and each of its subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported
taxes) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in good faith and 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 know of no basis for any such claim.
Section 4.20.
Certain Transactions. None of the officers, directors, or employees of the Company is presently a party to any transaction
with the Company (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, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust
or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee
or partner.
Section 4.21.
Rights of First Refusal. The Company is not obligated to offer the securities offered hereunder on a right of first refusal
basis or otherwise to any third parties including, but not limited to, current or former shareholders of the Company, underwriters,
brokers, agents or other third parties.
Section 4.22.
Use of Proceeds. The Company shall use the net proceeds from this offering for working capital and other general corporate
purposes including paying relevant fees and commissions incurred from this transaction. The Company will not provide any funding
to or purchase an interest in any person listed by the United States Department of the Treasury’s Office of Foreign Assets
Control as a Specially Designated National and Blocked Person.
Section 4.23.
[Intentionally Omitted]
Section 4.24.
Opinion of Counsel. Investor shall receive opinions from counsel to the Company on the date hereof substantially in the
form attached hereto as Exhibit B.
Section 4.25.
[Intentionally Omitted]
Section 4.26.
Dilutive Effect. The Company understands and acknowledges that the number of Advance Shares issuable upon purchases pursuant
to this Agreement will increase in certain circumstances including, but not necessarily limited to, the circumstance wherein the
trading price of the Common Stock declines during the Pricing Period. The Company’s executive officers and directors have
studied and fully understand the nature of the transactions contemplated by this Agreement and recognize that they have a potential
dilutive effect on the shareholders of the Company. The Board of Directors of the Company has concluded, in its good faith business
judgment, and with full understanding of the implications, that such issuance is in the best interests of the Company. The Company
specifically acknowledges that, subject to such limitations as are expressly set forth in the Agreement, its obligation to issue
Advance Shares upon purchases pursuant to this Agreement is absolute and unconditional regardless of the dilutive effect that such
issuance may have on the ownership interests of other shareholders of the Company.
Section 4.27.
Acknowledgment Regarding Investor’s Purchase of Shares. The Company acknowledges and agrees that the Investor is acting
solely in the capacity of an arm’s length investor with respect to this Agreement and the transactions contemplated hereunder.
The Company further acknowledges that the Investor is not acting as a financial advisor, partner or fiduciary of the Company or
any of its affiliates or subsidiaries (or in any similar capacity) with respect to this Agreement and the transactions contemplated
hereunder and any advice given by the Investor or any of its representatives or agents in connection with this Agreement and the
transactions contemplated hereunder is merely incidental to the Investor’s purchase of the Common Stock hereunder. The Company
is aware and acknowledges that it may not be able to request Advances under this Agreement if it cannot obtain an effective Registration
Statement or if any issuances of Common Stock pursuant to any Advances would violate any rules of the Principal Market.
Section 4.28.
No Advice from the Investor. The Company acknowledges that it has reviewed this Agreement and the transactions contemplated
by this Agreement with his or its own legal counsel and investment and tax advisors. The Company is relying solely on such counsel
and advisors and not on any statements or representations of the Investor or any of its representatives or agents for legal, tax
or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of
any jurisdiction. The Company is not relying on any representation except for the representations of the Investor contained in
this Agreement.
Section
4.29. No Similar Transactions. Except as disclosed on Schedule 4.29, the Company has not entered into any transaction
similar in nature to the one described in this Agreement.
Section
4.30. [Intentionally Omitted]
Section
4.31 Other Transactions. If at any time during the Term of the Agreement, the Company enters into an equity line of credit,
whereby the Issuer may sell securities at a future determined price, the Company’s right to request Advances as set forth
in Section 2.1 shall terminate. The Company confirms that except for certain Convertible Notes set forth in the attached Disclosre
Schedule, it has not entered into (A) any an agreement with any other fund or entity to effect any financing involving the sale
of debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional
shares of Common Stock at a price that is based upon and/or varies with the trading prices of Company’s Common Stock at any
time after the initial issuance of such securities or is subject to reset upon the occurrence of specified or contingent events
and (B) any agreement, including but not limited to an equity line of credit, whereby the Issuer may sell securities at a future
determined price
Section
4.32 The Advance Shares. The Advance Shares have been duly authorized and, when issued, delivered and paid for pursuant
to this Agreement, will be validly issued and fully paid and non-assessable, free and clear of all encumbrances and will be issued
in compliance with all applicable United States federal and state securities laws; the capital stock of the Company, including
the Common Stock, conforms in all material respects to the description thereof contained in the Registration Statement and the
Common Stock, including the Advance Shares, will conform to the description thereof contained in the Prospectus as amended or supplemented.
Neither the stockholders of the Company, nor any other Person have any preemptive rights or rights of first refusal with respect
to the Advance Shares or other rights to purchase or receive any of the Advance Shares or any other securities or assets of the
Company, and no Person has the right, contractual or otherwise, to cause the Company to issue to it, or register pursuant to the
Securities Act, any shares of capital stock or other securities or assets of the Company upon the issuance or sale of the Advance
Shares. The Company is not obligated to offer the Advance Shares on a right of first refusal basis or otherwise to any third
parties including, but not limited to, current or former shareholders of the Company, underwriters, brokers, agents or other third
parties.
Section
4.33 [Intentionally Omitted]
Section
4.34 Blue Sky. The Company shall, at its sole cost and expense, on or before each of the Closing
Dates, take such action as the Company shall reasonably determine is necessary to qualify the Securities for, or obtain exemption
for the Securities for, sale to the Investor at each of the Closings pursuant to this Agreement under applicable securities or
“Blue Sky” laws of such states of the United States, as reasonably specified by the Investor, and shall provide evidence
of any such action so taken to the Investor on or prior to the Closing Date.
Section
4.35 Reservation of Shares. The Company shall reserve thirty million (30,000,000)
shares of Stock for the issuance of the Securities to the Investor
as required hereunder. In the event that the Company determines that it does not have a sufficient number of authorized shares
of Common Stock to reserve and keep available for issuance, the Company shall use all commercially reasonable efforts to increase
the number of authorized shares of Common Stock by seeking shareholder approval for the authorization of such additional shares.
Section
4.36 Payment Set Aside. To the extent that the Company makes a payment or payments to the Investor
hereunder or under the Registration Rights Agreement or the Investor enforces or exercises its rights hereunder or thereunder,
and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be invalid 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.
Section
4.37 Share Capital. There are no securities or instruments containing anti-dilution of similar
provision that will be triggered by the issuance of shares of Common Stock pursuant to this Agreement. The Company does not have
any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement and there is
no dispute as to the class of any shares of the Company.
ARTICLE
V.
Indemnification
The
Investor and the Company represent to the other the following with respect to itself:
Section 5.1.
Indemnification.
(a)
In consideration of the Investor’s execution and delivery of this Agreement, and in addition to all of the Company’s
other obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless the Investor, and all of
its officers, directors, partners, employees and agents (including, without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the “Investor Indemnitees”) from and against any and all actions,
causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith
, and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred
by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Company in this Agreement or the Registration Rights Agreement or any other
certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation
of the Company contained in this Agreement or the Registration Rights Agreement or any other certificate, instrument or document
contemplated
hereby or thereby, or
(c) any cause of action, suit or claim brought or made against such Investor Indemnitee not arising out of any action or inaction
of an Investor Indemnitee., 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.
(b)
In consideration for the Company’s execution and delivery of this Agreement and in addition to Investor’s other obligations
hereunder, Investor shall defend, protect. indemnify and hold harmless the Investor, and all of its officers, directors, partners,
employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Company Indemnitees”) from and against any and all Indemnificed Liabilities, incurred by
the Company Indemnitees or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or breach
of any representation or warranty made by Investor in this Agreement or or any other certificate, instrument or document contemplated
hereby or thereby, (b) any breach of any covenant, agreement or obligation of Investor contained in this Agreement or the
Registration Rights Agreement or any other certificate, instrument or document contemplated hereby or thereby, or (c) any
investigation or claim by the SEC of or against Investor.
(b)
Contribution. In the event that the indemnity provided in Section 5.1 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the indemnifying party severally agrees to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same)
(collectively “Losses”) to which theindemnifying party may be subject in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party on the one hand from transactions contemplated by this Agreement.
If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Investor severally
shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of
the Company on the one hand and of the Investor on the other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal
to the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received
by it, and benefits received by the Investor shall be deemed to be equal to the total discounts received by the Investor.
Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the
one hand or the Investor on the other, the intent of the parties and their relative knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company and the Investor agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account
of the equitable considerations referred to above. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this section shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified Party in investigating, preparing or defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of this section the Investor shall not be required
to contribute any amount in excess of the amount by which the Purchase Price for Shares actually purchased pursuant to this Agreement
exceeds the amount of any damages which the Investor has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. For purposes of this Article V, each person who controls the Investor within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each director, officer, employee and
agent of the Investor shall have the same rights to contribution as the Investor, and each person who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this section.
I
The remedies provided for in this Article V are not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified person at law or in equity. The obligations of the parties to indemnify or make contribution
under this Article V shall survive termination.
(d)
Notwithstanding anything in this Agreement to the contrary, neither party to this Agreement shall be responsible or liable for
any indirect, special, punitive, or consequential damages actually or allegedly suffered or incurred by the other party to this
Agreement arising under, out of, or relating to this Agreement even if the other party has been advised or knew, or should have
known, of the possibility thereof.
Section
5.2 Notification of Claims for Indemnification. Each party entitled to indemnification under this Article V (an “Indemnified
Party”) shall, promptly after the receipt of notice of the commencement of any claim against such Indemnified Party in
respect of which indemnity may be sought from the party obligated to indemnify such Indemnified Party under this Article V (the
“Indemnifying Party”), notify the Indemnifying Party in writing of the commencement thereof. Any such notice
shall describe the claim in reasonable detail. The failure of any Indemnified Party to so notify the Indemnifying Party of any
such action shall not relieve the Indemnifying Party from any liability which it may have to such Indemnified Party (a) other
than pursuant to this Article V or (b) under this Article V unless, and only to the extent that, such failure results in the
Indemnifying Party’s forfeiture of substantive rights or defenses or the Indemnifying Party is prejudiced by such delay.
The procedures listed below shall govern the procedures for the handling of indemnification claims.
(a)
Any claim for indemnification for Indemnified Liabilities that do not result from a Third Party Claim as defined in the following
paragraph, shall be asserted by written notice given by the Indemnified Party to the Indemnifying Party. Such Indemnifying Party
shall have a period of thirty (30) days after the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such thirty (30) day period, such Indemnifying Party shall be deemed to have refused to accept
responsibility to make payment as set forth in Section 5.1. If such Indemnifying Party does not respond within such thirty
(30) day period or rejects such claim in whole or in part, the Indemnified Party shall be free to pursue such remedies as
specified in this Agreement.
(b)
If an Indemnified Party shall receive notice or otherwise learn of the assertion by a person or entity not a party to this Agreement
of any threatened legal action or claim (collectively a “Third Party Claim”), with respect to which an Indemnifying
Party may be obligated to provide indemnification, the Indemnified Party shall give such Indemnifying Party written notice thereof
within twenty (20) days after becoming aware of such Third Party Claim.
(c)
An Indemnifying Party may elect to defend (and, unless the Indemnifying Party has specified any reservations or exceptions, to
seek to settle or compromise) at such Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel,
any Third Party Claim. Within thirty (30) days after the receipt of notice from an Indemnified Party (or sooner if the nature
of such Third Party Claim so
requires), the Indemnifying
Party shall notify the Indemnified Party whether the Indemnifying Party will assume responsibility for defending such Third Party
Claim, which election shall specify any reservations or exceptions. If such Indemnifying Party does not respond within such thirty
(30) day period or rejects such claim in whole or in part, the Indemnified Party shall be free to pursue such remedies as
specified in this Agreement. In case any such Third Party Claim shall be brought against any Indemnified Party, and it shall notify
the Indemnifying Party of the commencement thereof, the Indemnifying Party shall be entitled to assume the defense thereof at its
own expense, with counsel satisfactory to such Indemnified Party in its reasonable judgment; provided, however, that any Indemnified
Party may, at its own expense, retain separate counsel to participate in such defense at its own expense. Notwithstanding the foregoing,
in any Third Party Claim in which both the Indemnifying Party, on the one hand, and an Indemnified Party, on the other hand, are,
or are reasonably likely to become, a party, such Indemnified Party shall have the right to employ separate counsel and to control
its own defense of such claim if, in the reasonable opinion of counsel to such Indemnified Party, either (x) one or more significant
defenses are available to the Indemnified Party that are not available to the Indemnifying Party or (y) a conflict or potential
conflict exists between the Indemnifying Party, on the one hand, and such Indemnified Party, on the other hand, that would make
such separate representation advisable; provided, however, that in such circumstances the Indemnifying Party (i) shall not
be liable for the fees and expenses of more than one counsel to all Indemnified Parties and (ii) shall reimburse the Indemnified
Parties for such reasonable fees and expenses of such counsel incurred in any such Third Party Claim, as such expenses are incurred,
provided that the Indemnified Parties agree to repay such amounts if it is ultimately determined that the Indemnifying Party was
not obligated to provide indemnification under this Article IX. The Indemnifying Party agrees that it shall not, without the prior
written consent of the Indemnified Party, settle, compromise or consent to the entry of any judgment in any pending or threatened
claim relating to the matters contemplated hereby (if any Indemnified Party is a party thereto or has been actually threatened
to be made a party thereto) unless such settlement, compromise or consent includes an unconditional release of such Indemnified
Party from all liability arising or that may arise out of such claim. The Indemnifying Party shall not be liable for any settlement
of any claim effected against an Indemnified Party without the Indemnifying Party’s written consent, which consent shall
not be unreasonably withheld, conditioned or delayed. The rights accorded to an Indemnified Party hereunder shall be in addition
to any rights that any Indemnified Party may have at common law, by separate agreement or otherwise; provided, however, that notwithstanding
the foregoing or anything to the contrary contained in this Agreement, nothing in this Article V shall restrict or limit any rights
that any Indemnified Party may have to seek equitable relief.
ARTICLE
VI.
Covenants
Section 6.1.
Registration Rights. The Company shall cause the Registration Rights Agreement to remain in full force and effect and the
Company shall comply in all material respects with the terms thereof. During the Commitment Period, the Company shall notify the
Investor promptly if (i) the Registration Statement shall cease to be effective under the Securities Act, (ii) the Common Stock
shall cease to be authorized for listing on the Principal Market, (iii) the Common Stock ceases to be registered under Section
12(g) of the Exchange Act or (iv) the Company fails to file in a timely manner all reports and other documents required of it as
a reporting company under the Exchange Act.
Section 6.2.
Quotation of Common Stock. The Company shall maintain the Common Stock’s authorization for quotation on the Principal
Market and use its best efforts to file within any mandatory timeframe all reports required to be filed by the Company.
Section 6.3.
Exchange Act Registration. The Company will cause its Common Stock to continue to be registered under Section 12(g) of the
Exchange Act, will file in a timely manner all reports and other documents required of it as a reporting company under the Exchange
Act and will not take any action or file any document (whether or not permitted by Exchange Act or the rules thereunder) to terminate
or suspend such registration or to terminate or suspend its reporting and filing obligations under said Exchange Act.
Section 6.4.
Transfer Agent Instructions. On the Advance Date, the Company shall deliver instructions to its transfer agent to issue
shares of Common Stock to the Investor free of restrictive legends.
Section 6.5.
Corporate Existence. The Company will take all steps necessary to preserve and continue the corporate existence of the Company.
Section 6.6.
Notice of Certain Events Affecting Registration; Suspension of Right to Make an Advance. The Company shall not deliver to
the Investor any Advance Notice during the continuation of any of the following events: (i) receipt of any request for additional
information by the SEC or any other Federal or state governmental authority during the period of effectiveness of the Registration
Statement for amendments or supplements to the registration statement or related prospectus; (ii) the issuance by the SEC
or any other Federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in the Registration
Statement or related prospectus of any document incorporated or deemed to be incorporated therein by reference untrue in any material
respect or that requires the making of any changes in the Registration Statement, related prospectus or documents so that, in the
case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus,
it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (v) the
Company’s reasonable determination that a post-effective amendment to the Registration Statement would be appropriate; and
the Company will promptly make available to the Investor any such supplement or amendment to the related prospectus..
Section 6.7.
Equity Credit Line Transactions. During the term of this Agreement, the Company shall not enter into any Prohibited Transaction
without the prior written consent of the Investor, which consent may be withheld at the sole discretion of the Investor. For the
purposes of this Agreement, the term “Prohibited Transaction” shall refer to the issuance by the Company of
any “future priced securities,” which shall mean the issuance of shares of Common Stock or securities of any type whatsoever
that are, or may become, convertible or exchangeable into shares of Common Stock pursuant to any equity line financing registered
with the SEC on Form S-1.
Section 6.8.
Consolidation; Merger; Subdivision of Stock. The Company shall not, at any time after the delivery of an Advance Notice
and before the Advance Date applicable to such Advance Notice, effect any merger or consolidation of the Company with or into,
or a transfer of all or substantially all the assets of the Company to another entity (a “Consolidation Event”)
unless the resulting successor or acquiring entity (if not the Company) assumes by written instrument the obligation to deliver
to the Investor such shares of stock and/or securities as the Investor is entitled to receive pursuant to this Agreement.
Section 6.9.
[Intentionally Omitted].
Section 6.10.
[Intentionally Omitted].
Section
6.11. Listing of Shares. The Company will use commercially reasonable efforts to cause the Shares to be listed
on the Principal Market and to qualify the Shares for sale under the securities laws of such jurisdictions as the Investor designates;
provided that the Company shall not be required in connection therewith to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction.
Section
6.12. [Intentionally Omitted]
Section
6.13. No General Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on
its behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection
with the offer or sale of the Common Stock to be offered as set forth in this Agreement.
Section 6.14. [Intentionally
Omitted]
Section
6.15. Transactions With Affiliates. The Company shall not, and shall cause each of its Subsidiaries not to, enter into,
amend, modify or supplement, or permit any Subsidiary to enter into, amend, modify or supplement, any agreement, transaction, commitment
or arrangement with any of its or any Subsidiary's officers, directors, persons who were officers or directors at any time during
the previous two (2) years, shareholders who beneficially own 5% or more of the Common Stock, or Affiliates or with any individual
related by blood, marriage or adoption to any such individual or with any entity in which any such entity or individual owns a
5% or more beneficial interest (each a "Related Party"), except for (I) customary employment arrangements and benefit
programs on reasonable terms, (II) any agreement, transaction, commitment or arrangement on an arms-length basis on terms no less
favorable than terms which would have been obtainable from a disinterested third party other than such Related Party, or (III)
any agreement, transaction, commitment or arrangement which is approved by a majority of the disinterested directors of the Company.
For purposes hereof, any director who is also an officer of the Company or any Subsidiary of the Company shall not be a disinterested
director with respect to any such agreement, transaction, commitment or arrangement. "Affiliate" for purposes hereof
means, with respect to any person or entity, another person or entity that, directly or indirectly, (I) has a 5% or more equity
interest in that person or entity, (II) has 5% or more common ownership with that person or entity, (III) controls that person
or entity, or (IV) is under common control with that person or entity. "Control" or "Controls" for purposes
hereof means that a person or entity has the power, directly or indirectly, to conduct or govern the policies of another person
or entity.
Section
6.16. Filing of Form 8-K. On or before the date which is four (4) Trading Days after the Execution Date, the Company shall
file a Current Report on Form 8-K with the SEC describing the terms of the transaction contemplated by the Equity Line Transaction
Documents in the form required by the 1934 Act, if such filing is required.
Section
6.17. Acknowledgement of Terms. The Company hereby represents and warrants to the Investor that: (i) it is voluntarily entering
into this Agreement of its own freewill, (ii) it is not entering this Agreement under economic duress, (iii) the terms of this
Agreement are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of its own choosing review
this Agreement, advise the Company with respect to this Agreement, and represent the Company in connection with this Agreement.
Section
6.18. [Intentionally Omitted]
Section
6.19. Conduct of Business. The Company shall, and shall cause all of its subsidiaries to carry on and conduct its business
and the business of each subsidiary in a proper and efficient manner in accordance with good commercial practice, and ensure that
while the Investor holds any of the Stock, that the voting any other rights attached to the Stock are not altered in a manner which,
in the opinion of the Investor, is materially prejudicial to the Investor.
Section
6.20. Miscellaneous Covenants. The Company shall not, and shall cause all of its subsidiaries not to, directly or indirectly,
without the Investor’s written approval: (a) dispose, in a single transaction, or in a series of transactions, of all or
any part of its assets unless such disposal is (i) in the ordinary course of business; (ii) for fair market value; and (iii) approved
by the board of directors of the Company; (b) reduce its used share capital or any uncalled liability in respect of its issued
capital, except by means of a purchase or redemption of the share capital that is permitted under law; (c) undertake any consolidation
of its share capital; (d) change the nature of its business or the nature of the business of any subsidiary; (e) transfer the jurisdiction
of incorporation of the Company or any of its Subsidiaries; (f) enter into any agreement with respect to any of the matters referred
to in this section.
Section
6.21. [Intentionally Omitted].
Section
6.22. [Intentionally Omitted].
Section
6.23. Illegality and Impossibility. Without limiting the generality of the Investor’s rights set out elsewhere in
this Agreement, if in the reasonable opinion of the Investor, at any time there exists a law which , or an official or reasonable
interpretation of which, makes it , or may make it illegal or impossible in practice of the Investor to undertake any of the Advances,
or render any of the contemplated Advances unenforceable, void or voidable, the Investor may, by giving a notice to the Company
suspend or cancel some or all of its obligations under this Agreement, or terminate this Agreement.
Section
6.24. Costs of Registration Statement. The Investor covenants to pay all costs and expenses of the Company associated with
the Registration Statement.
ARTICLE
VII.
Conditions for Advance and Conditions to Closing
Section 7.1.
Conditions Precedent to the Obligations of the Company. The obligation hereunder of the Company to issue and sell Advance
Shares to the Investor incident to each Closing is subject to the satisfaction, or waiver by the Investor in writing, at or before
each such Closing, of each of the conditions set forth below.
(a)
Accuracy of the Investor’s Representations and Warranties. The representations and warranties of the Investor shall
be true and correct in all material respects.
(b)
Performance by the Investor. The Investor shall have performed, satisfied and complied in all respects with all covenants,
agreements and conditions required by this Agreement and the Registration Rights Agreement to be performed, satisfied or complied
with by the Investor at or prior to such Closing.
Section 7.2.
Conditions Precedent to the Right of the Company to Deliver an Advance Notice. The right of the Company to deliver an Advance
Notice is subject to the fulfillment by the Company, on such Advance Date (a “Condition Satisfaction Date”),
of each of the following conditions, any of which may be waived in writing by the Investor:
(a)
Free Trading. Advance Shares to be issued with respect to the applicable Advance Notice will be freely trading .
(b)
Authority. The Company shall have obtained all permits and qualifications required by any applicable state in accordance
with the Registration Rights Agreement for the offer and sale of Advance Shares, or shall have the availability of exemptions there-from.
The sale and issuance of Advance Shares shall be legally permitted by all laws and regulations to which the Company is subject.
(c)
Fundamental Changes. There shall not exist any fundamental changes to the information set forth in a Registration Statement
which would require the Company to file a post-effective amendment to a Registration Statement.
(d)
Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement and the Registration Rights Agreement to be performed, satisfied or complied
with by the Company at or prior to each Condition Satisfaction Date.
(e)
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits or directly and adversely
affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that may have the effect
of prohibiting or adversely affecting any of the transactions contemplated by this Agreement.
(f)
No Suspension of Trading in or Delisting of Common Stock. The Common Stock is trading on the Principal Market. The trading
of Common Stock is not suspended by any government or the Principal Market. The issuance of Advance Shares with respect to the
applicable Advance Notice will not violate the shareholder approval requirements of the Principal Market. The Company shall not
have received any notice threatening the continued quotation of the Common Stock on the Principal Market and the Company shall
have no knowledge of any event which would be more likely than not to have the effect of causing the Common Stock to not be trading
or quoted on the Principal Market.
(g)
Maximum Advance Amount In no event shall the Company issue such additional shares (i) in excess of the Maximum Advance Amount
or (ii) if such issuance would result in non-compliance with any securities laws. If any of the Company’s representations
in this Agreement are false, then no Advances shall be permitted. Any portion of an Advance that would cause the Investor to exceed
the Ownership Limitation shall automatically be withdrawn.
(h)
No Knowledge. The Company has no knowledge of any event which would be more likely than not to have the effect of causing
the Advance Shares with respect to the applicable Advance Notice not to be freely tradable.
(i)
Executed Advance Notice. The Investor shall have received the Advance Notice executed by an officer of the Company and the
representations contained in such Advance Notice shall be true and correct as of each Condition Satisfaction Date.
(j)
Failure to Deliver Shares. Company understands that a delay in the issuance of Common Stock could result in economic damage
to the Investor. If the Company fails to cause the delivery of the Shares when due, the Company shall pay to the Investor on demand
in cash by wire transfer of immediately available funds to an account designated by the Investor as liquidated damages for such
failure and not as a penalty, an amount equal to five percent (5%) of the payment required to be paid by the Investor on such Settlement
Date (i.e., the Advance Amount) for the initial 30 days following such date until the Shares have been delivered, and
an additional 5% for each additional 30-day period thereafter until the Shares have been delivered.
(k)
Fees Paid. The Company shall not be obligated to pay to Investor any fees and expenses related to this Agreement.
(l)
No Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company
of any request for additional information from any federal or state governmental, administrative or self-regulatory authority during
the Commitment Period, the response to which would require any amendments or supplements to any filings; (ii) receipt by the Company
of any notification
with respect to the suspension
of the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose.
(m)
No Right of First Refusal. No person is entitled or purports to be entitled, to any right of first refusal, pre-emptive
right, right of participation, or any similar right, to participate in the transaction or otherwise with respect to any securities
of the Company.
(n)
No Security. The Company has not granted security with respected to any indebtedness or other equity of the Company.
(o)
No Adjustment. The issuance and sale of any of the Investor’s stock will not obligate the Company to issue Stock or
other securities to any other persona and will not result in the adjustment of the exercise, conversion, exchange, or reset price
of any outstanding security.
(p)
No Other Rights. There are no voting, buy-sell, outstanding or authorized stock appreciation, right of first purchase, phantom
stock, profit participation or equity based compensation agreements, options or arrangement, or like rights relating to the securities
of the Company or agreements of any kind among the Company and any person,
(q)
Valid Issuance. When issued pursuant to this Agreement, all Investor’s stock will be validly issued and fully paid,
and will be free and clear of any and all liens and restrictions, except for restrictions on transfer imposed by applicable laws.
(r)
Regulatory Issues. No stop order, trading halt, suspension of trading, cessation of quotation, or removal of the company
of the Stock from any exchange has been requested by the Company or imposed by any governmental authority or regulatory body. There
is no fact or circumstance that may cause the Company to request, or any governmental authority or regulatory body to impose any
stop order, trading halt, suspension of trading, cessation of quotation or removal of the Company or the Stock from any exchange.
(s)
No Additional Material Adverse Effect. There has been no event or condition that has had or may have a Material Adverse
Effect since the date of the Company’s latest audited financial statements:
(t)
No Liabilities. The Company has not incurred any liabilities (contingent or otherwise) other than: (a) trade payables and
accrued expenses incurred in the ordinary course of business consistent with past practice; and (b) liabilities not required to
be reflected in the Company’s financial statements pursuant to the financial standards pursuant to which such financial statements
are prepared, or required to be disclosed in the Company’s public filings;
(u)
No Change in Accounting. The Company has not altered its method of accounting; and
(v)
No Dividends. 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.
(w)
No Conflict, Breach, Violation or Default. The execution and delivery of, and the performance of the terms of, the Agreement
or any Advance Notice or Advance will not: (i) result in the creation of any lien in respect of any property of the Company or
any of its subsidiaries; or (ii) violate, conflict with, result in a breach of an provision of, require any notice or consent under,
constitutes a default under, resulting in the termination of, or in a right of termination or cancellation of, accelerate the performance
required by, result in the triggering of any payment or other material obligations pursuant to, ay of the terms, conditions or
provisions of: (a) the Company’s constitution as in effect on the date of this Agreement; or (b) any law , governmental authorization,
or order of any court, domestic or foreign, having jurisdiction over the Company, any subsidiary, or any of their respective assets
or properties; or (c) any material agreement or instrument to which the Company or any subsidiary is a party or by which the Company
or a subsidiary is bound or to which any their respective assets or properties is subject (or render any such agreement or instrument
voidable or without further effect).
(x)
Litigation. (i) There are no pending actions, suits or proceedings against or affecting the Company, its subsidiaries or
any of its or their properties, and to the Company’s knowledge, no such actions, suits or proceedings are threatened or contemplated;
(ii) Neither the Company nor any subsidiary, nor any director or officer is or has been the subject of any action, suit, proceeding,
or investigation involving a claim of violation of or liability under securities laws or a claim of breach of fiduciary duty; (iii)
There has not been, and to the knowledge of the Company there is no, pending or contemplated investigation by a governmental authority
involving the Company or any current or former director or officer of the Company; and (iv) No regulatory body has issued any stop
order or other order suspending the effectiveness of a Registration Statement or any related prospectus filed or lodged by the
Company.
(y)
Compliance. Neither the Company nor any subsidiary: (i) is in material default under, or in material 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 is in default under or that 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 nay order
of any court, arbitrator or governmental authority or regulatory body; (iii) is or has been in violation of any law.
(z)
[Intentionally Omitted]
(aa)
[Intentionally Omitted]
(bb)
Solvency. The Company shall confirm in writing each of the following:
(i)
The Company and each of its subsidiaries is able, and is not aware of anything which would render the Company or any of its subsidiaries
unable, to pay all its debts as and when they become due and payable.
(ii)
No judicial order has been made or obtained against the Company or any of its subsidiaries which is unpaid or unsatisfied.
(iii)
No attachment in in the process of being levied or enforced against any asset of the Company or its subsidiaries.
(iv)
No administrator, liquidator, provisional liquidator, controller or receiver of, or in connection with, the Company or any of its
subsidiaries has been appointed, and the Company is not aware of such appointment pending, threatened, or being likely.
(v)
No person has entered into, proposed, sanctioned, approved, or commenced, legal action relating to a scheme of arrangement of the
affairs of the Company or any of its subsidiaries, or between any of those people and any of its shareholders or creditors.
(vi)
Neither the Company nor any of its subsidiaries is in default under any security interest over, or in relation to, any asset.
(vii)
The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving
effect to the contemplated transactions and Advances, does not anticipate or know of any basis upon which its auditors might issue
a qualified opinion in respect of its current fiscal year.
(cc)
[Intentionally Omitted.]
(dd)
Non-public information. Neither the Company nor any person acting on its behalf has provided the Investor or its agents,
representative or counsel with any information that constitutes inside information or material non-public information, and to the
Company’s knowledge, the Investor does not possess any inside information or material non-public information.
(ee)
Prohibited Transactions. The Company has not entered or agreed to enter into a Prohibited Transaction.
(gg)
No Breach. The Company is not in breach of this Agreement.
(hh)
Brokers and finders. No person will have, as a result of the contemplated transactions and Advances, any valid right, interest
or claim against or upon the Company, any subsidiary or an Investor for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the Company.
(ii)
[Intentionally Omitted]
7.3 Investor
Right to Investigate an Event of Default.
If in
the Investor’s reasonable opinion, an Event of Default has occurred, or is or may be continuing: (a) the Investor may investigate
such purported Event of Default; (b) the Company shall co-operate with the Investor in such investigation; and (c) the Company
shall comply with all reasonable requests made by the Investor of the Company in connection with any investigation by the Investor.
7.
4 [Intentionally Omitted]
ARTICLE
VIII.
Non-Disclosure of Non-Public Information
Section 8.1.
Non-Disclosure of Non-Public Information.
(a)
Subject to Section 6.6 and except as otherwise provided in this Agreement or the Registration Rights Agreement, the Company covenants
and agrees that it has not in the past and will refrain in the future from disclosing, and shall cause its officers, directors,
employees and agents to refrain from disclosing, any material non-public information to the Investor without also disseminating
such information to the public at the same time.
(b) Nothing
herein shall require the Company to disclose material, non-public information to the Investor or its advisors or representatives,
and the Company represents that it does not disseminate material, non-public information to any Investors who purchase stock in
the Company in a public offering, to money managers or to securities analysts in violation of Regulation FD of the Exchange Act,
provided, however, that notwithstanding anything herein to the contrary, the Company will, as hereinabove provided and subject
to compliance with Regulation FD, immediately notify the advisors and representatives of the Investor and, if any, underwriters,
of any event or the existence of any circumstance (without any obligation to disclose the specific event or circumstance) of which
it becomes aware, constituting material, non-public information (whether or not requested of the Company specifically or generally
during the course of due diligence by such persons or entities), which, if not disclosed in the prospectus included in the Registration
Statement would cause such prospectus to include a material misstatement or to omit a material fact required to be stated therein
in order to make the statements, therein, in light of the circumstances in which they were made, not misleading. Nothing contained
in this Section 8.1 shall be construed to mean that such persons or entities other than the Investor (without the written
consent of the Investor prior to disclosure of such information) may not obtain material, non-public information in the course
of conducting due diligence in accordance with the terms of this Agreement and nothing herein shall prevent any
such persons or entities
from notifying the Company of their opinion that based on such due diligence by such persons or entities, that the Registration
Statement contains an untrue statement of material fact or omits a material fact required to be stated in the Registration Statement
or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.
ARTICLE
IX.
Choice of Law/Jurisdiction
Section 9.
Governing Law. This Agreement shall be governed by and interpreted solely in accordance with the laws of the State of New
York without regard to the principles of conflict of laws. Any dispute arising out of or in connection with this Agreement or otherwise
relating to the parties relationship shall be settled only by litigation and exclusively in the State of New York, City of New
York. The Company and the Investor further agree that no demand for punitive or exemplary damages shall be made. The parties hereby
waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect
of any matter arising out of or in connection with this Agreement. The parties agree that in the event of any action, litigation
or proceeding between the parties arising out of or in relation to this Agreement, the prevailing party in a final judgment after
the appeal period has passed shall be awarded, in addition to any damages, injunctions or other relief, such party’s costs
and expenses, including but not limited to all related costs and reasonable attorneys’, accountants’ and experts’
fees incurred in bringing such action, litigation or proceeding and/or enforcing any judgment or order granted therein. No party
to this Agreement will challenge the jurisdiction or venue provisions as provided in this section. The section shall
survive termination of the Agreement.
ARTICLE
X.
Assignment; Termination
Section 10.1.
Assignment. Neither this Agreement nor any rights or obligations of the Company or the Investor hereunder may be assigned
to any other Person.
Section 10.2.
Termination.
(a) Unless
earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest of (i) the first day
of the month next following the 36-month anniversary of the Effective Date, (ii) the date on which the Investor shall have
made payment of Advances pursuant to this Agreement in the aggregate amount of the Commitment Amount or (iii) the Registration
Statement is no longer effective.
(b) The
obligation of the Investor to make an Advance to the Company pursuant to this Agreement shall terminate permanently (including
with respect to an Advance Date that has not yet occurred) in the event that (i) there shall occur any stop order or suspension
of the effectiveness of the Registration Statement for an aggregate of fifty (50) Trading Days, during the Commitment Period,
or (ii) the Company shall at any time fail materially to comply with the requirements of Article VI and such failure
is not cured within thirty (30) days after receipt of written notice from the Investor, provided, however, that
this paragraph (c) shall not apply to any period commencing upon the filing of a post-effective amendment to such Registration
Statement and ending upon the date on which such post effective amendment is declared effective by the SEC. The Investor may terminate
this Agreement by sending email notice to the Company declaring a Material Adverse Effect.
(c) Nothing
in this Section 10.2 shall be deemed to release the Company or the Investor from any liability for any breach under this Agreement,
or to impair the rights of the Company and the Investor to compel specific performance by the other party of its obligations under
this Agreement. The indemnification provisions contained in Sections 5.1 and 5.2 shall survive termination hereunder.
ARTICLE
XI.
Notices
Section 11.1.
Notices. Any notices, consents, waivers, or other communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered upon being sent to the following email addresses:
If
to the Company: robert@ihookupsocial.com
If
to the Investor: rmarino@beaufortcp.com
Each
party shall provide five (5) days’ prior written notice to the other party of any change in email address.
ARTICLE
XII.
Miscellaneous
Section 12.1.
Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one
and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.
Section 12.2
Entire Agreement; Amendments. This Agreement supersedes all other prior agreements, negotiations or discussions both oral
or written between the Investor, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed
herein, and this Agreement and the instruments referenced herein and therein contain the entire understanding of the parties with
respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company
nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this
Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement. The
provisions of this Agreement shall be
construed in favor of
the Investor. Except as specifically set out in this Agreement, neither the Company nor the Investor makes any representation,
warranty, covenant or undertaking with respect to any subject matter regarding this Agreement or otherwise.
Section 12.3.
Reporting Entity for the Common Stock. The reporting entity relied upon for the determination of the trading price or trading
volume of the Common Stock on any given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or any successor
thereto. The written mutual consent of the Investor and the Company shall be required to employ any other reporting entity.
Section 12.4.
Break Fee and Expenses. Each of the parties shall pay its own fees and expenses (including the fees of any attorneys, accountants,
appraisers or others engaged by such party) in connection with this Agreement. The Investor shall pay the legal fees associated
with the Registration Statement (the “Registration Fees”). In consideration for entering into this Agreement,
the Company is required to issue an initial 1,000,000 shares of common stock to an escrow agent mutually agreed upon by the parties
hereto. Upon effectiveness of the Registration Statement, such shares shall immediately be returned to the Company by the applicable
escrow agent. In the event (i) the Registration Statement is not declared effective within eighteen (18) months of the initial
filing thereof, or (ii) there is a breach by the Company of any material terms of this Agreement, the Registration Rights Agreement
or any related agreements, such shares shall be issued to the Investor by such escrow agent (each a “Break Event”).
Section 12.5.
[Intentionally Omitted].
Section
12.6 Publicity. Prior to issuing any public statements, the Company shall send to the Investor for approval any press releases
or public statement with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise
make any such public statement without the prior written consent of the other party. Notwithstanding the foregoing, the Company
shall not publicly disclose the name of the Investor unless the Investor provides written approval to do so.
Section
12.7 Placement Agent. If so required by the SEC, the Company agrees to pay a registered broker dealer, to act as placement
agent, a percentage of the Put Amount on each draw toward the fee. The Investor shall have no obligation with respect
to any fees or with respect to any claims made by or on behalf of other persons or entities for fees of a type contemplated in
this Section that may be due in connection with the transactions contemplated by this Agreement. The Company shall indemnify and
hold harmless the Investor, their employees, officers, directors, agents, and partners, and their respective affiliates, from and
against all claims, losses, damages, costs (including the costs of preparation and attorney's fees) and expenses incurred in respect
of any such claimed or existing fees, as such fees and expenses are incurred.
Section 12.8
No Third Party Beneficiaries. Notwithstanding anything contained in this Agreement to the
contrary, nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement
(including without limitation any partner, member, shareholder, director, officer, employee or other beneficial owner of any party
hereto, in its own capacity as such or in bringing a derivative action on behalf of a party hereto) shall have any standing as
third party beneficiary with respect to this Agreement or the transactions contemplated hereby.
Section 12.9
No Personal Liability of Directors, Officers, Owners, Etc. No director, officer, employee,
incorporator, shareholder, managing member, member, general partner, limited partner, principal or other agent of any of the Investor
or the Company shall have any liability for any obligations of the Investor or the Company under this Agreement or for any claim
based on, in respect of, or by reason of, the respective obligations of the Investor or the Company hereunder. Each party hereto
hereby waives and releases all such liability. This waiver and release is a material inducement to each party’s entry into
this Agreement.
Section
12.10. Delay. The Investor shall not be obligated to perform and shall not be deemed to be in default hereunder,
if the performance of an obligation required hereunder is prevented by the occurrence of any of the following, acts of God, strikes,
lock-outs, other industrial disturbances, acts of a public enemy, war or war-like action (whether actual, impending or expected
and whether de jure or de facto), acts of terrorists, arrest or other restraint of government (civil or military), blockades, insurrections,
riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, sink holes, civil disturbances,
explosions, breakage or accident to equipment or machinery, confiscation or seizure by any government or public authority, nuclear
reaction or radiation, radioactive contamination or other causes, whether of the kind herein enumerated or otherwise, that are
not reasonably within the control of the party claiming the right to delay performance on account of such occurrence.
[REMAINDER OF PAGE INTENTIONALLY
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IN
WITNESS WHEREOF, the parties hereto have caused this Investment Agreement to be executed by the undersigned, thereunto duly
authorized, as of the date first set forth above.
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COMPANY: |
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iHookup Social, Inc. |
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By /s/Robert
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Name: Robert Rositano Jr. |
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Title: President |
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INVESTOR: |
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Beaufort Capital Partners LLC |
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By: /s/Robert
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Name: Robert P. Marino |
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Title: Managing Member |
EXHIBIT A
ADVANCE NOTICE
iHookup
Social, Inc.. (the “Company”)
The
undersigned, __________________________hereby certifies, with respect to the sale of shares of Common Stock of the Company issuable
in connection with this Advance Notice, delivered pursuant to the Investment Agreement (the “Agreement”), as
follows:
1.
The undersigned is the duly elected Officer of the Company, its Chief Executive, President or Chief Financial Officer.
2. There
are no fundamental changes to (a) the covenants in Article IV of the Investment Financing Agreement and (b) the information set
forth in the Registration Statement which would require the Company to file a post effective amendment to the Registration Statement.
3. The
Company has performed in all material respects all covenants and agreements to be performed by the Company and has complied in
all material respects with all obligations and conditions contained in the Agreement on or prior to the Advance Date, and shall
continue to perform in all material respects all covenants and agreements to be performed by the Company through the applicable
Advance Date. All conditions to the delivery of this Advance Notice are satisfied as of the date hereof.
4. The
undersigned hereby represents, warrants and covenants that it has made all filings (“SEC Filings”) required
to be made by it pursuant to applicable securities laws (including, without limitation, all filings required under the Securities
Exchange Act of 1934, which include Forms 10-Q or, 10-K or, 8-K, etc.). All SEC Filings and other public disclosures made by the
Company, including, without limitation, all press releases, analysts meetings and calls, etc. (collectively, the “Public
Disclosures”), have been reviewed and approved for release by the Company’s attorneys and, if containing financial
information, the Company’s independent certified public accountants. None of the Company’s Public Disclosures contain,
as of their respective dates, any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
5. The Advance requested
is ________________shares.
6. There are currently
_______________________ amount of shares outstanding on a fully diluted basis.
The undersigned has
executed this Certificate this _____ day of _____.
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Please email this Advance Notice to: rmarino@beaufortcp.com
EXHIBIT B
FORM OF OPINION
1.
The Company is a corporation validly existing and in good standing under the laws of the State of Nevada, with corporate power
and authority to own, lease and operate its properties and to conduct its business as described in the Company’s latest Form
10-K or 10-Q filed by the Company under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)
and the rules and regulations of the Commission thereunder (the “Public Filings”) and to enter into and perform
its obligations under the Investment Agreement.
2. The
Company has the requisite corporate power and authority to enter into and perform its obligations under the Investment Agreement
and to issue the Common Shares in accordance with their terms. The execution and delivery of the Investment Agreement by
the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary corporate
action, and no further consent or authorization of the Company or its Board of Directors or stockholders is required. The
Investment Agreement has been duly executed and delivered and the Investment Agreement constitutes a valid and binding obligation
of the Company enforceable against the Company in accordance with its respective terms, except as my be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of creditors’ rights and remedies.
3.
The Common Shares are duly authorized and, upon issuance in accordance with the terms of the Investment Agreement, will be duly
and validly issued, fully paid and nonassessable, free of any liens, encumbrances and preemptive or similar rights contained, to
our knowledge, in any agreement filed by the Company as an exhibit to the Company’s Public Filings.
4.
The execution, delivery and performance of the Investment Agreement by the Company (other than performance by the Company of its
obligations under the indemnification sections of such agreements, as to which no opinion need be rendered) will not (i) result
in a violation of the Company’s Articles of Incorporation or By-Laws; (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement or, indenture filed by the Company as an exhibit to the Company’s Public Filings;
or (iii) to our knowledge, result in a violation of any federal or state law, rule or regulation, order, judgment or decree applicable
to the Company.
5.
To our knowledge without independent investigation and other then as set forth in the Public Filings, there are no legal or governmental
proceedings pending to which the Company is a party or of which any property or assets of the Company is subject which is required
to be disclosed in any Public Filings.
EX 10.70
REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of the 25th day of June 2014 (the
“Agreement”) between Beaufort Capital Partners LLC (the “Investor”), and iHookup
Social, Inc. (the “Company”).
WHEREAS:
A. In
connection with the Investment Agreement by and between the parties hereto of even date herewith (the “Investment Agreement”),
the Company has agreed, upon the terms and subject to the conditions of the Investment Agreement, to issue and sell to the Investor
shares of the Company’s common stock (the “Common Stock ”), which can be purchased pursuant to the terms
of the Investment Agreement. Capitalized terms not defined herein shall have the meaning ascribed to them in the Investment Agreement.
B. To
induce the Investor to execute and deliver the Investment Agreement, the Company has agreed to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively,
the “ Securities Act ”), and applicable state securities laws.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the
following terms shall have the following meanings:
a. “Person”
means a corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.
b. “Register,”
“registered ,” and “registration ” refer to a registration effected by preparing and filing
one or more Registration Statements (as defined below) in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a continuous or delayed basis (“Rule 415”),
and the declaration or ordering of effectiveness of such Registration Statement(s) by the United States Securities and Exchange
Commission (the “SEC”).
c. “Registrable
Securities” means the Investor’s Shares, as defined in the Investment Agreement, the Commitment Shares and shares
of Common Stock issuable to Investors pursuant to the Investment Agreement.
d. “Registration
Statement” means a registration statement under the Securities Act which covers the Registrable Securities.
2. REGISTRATION.
a. Filing
of a Registration Statement. The Company shall prepare and file with the SEC a Registration Statement on Form S-1 or on such
other form as is available within twenty one (21) days of signing this Agreement. Failure to file such Registration Statement within
twenty one (21) days of signing this Agreement shall be considered a breach of a material term of this Agreement. The Company shall
cause such Registration Statement to be declared effective by the SEC prior to the first sale to the Investor of the Company’s
Common Stock pursuant to the Investment Agreement. After a Registration Statement is declared effective, the Company shall insure
that the Registration Statement and any subsequent Registration Statements remain in effect until all of the Registrable Securities
have been sold, or may be sold without restriction pursuant to Rule 144.
b. Sufficient
Number of Shares Registered. In the event the number of shares available under a Registration Statement filed pursuant to Section
2(a) is insufficient to cover all of the Registrable Securities the Company shall amend the Registration Statement, or file a new
Registration Statement, or both, so as to cover all of such Registrable Securities as soon as practicable, but in any event not
later than fifteen (15) days after the necessity therefore arises. The Company shall use it best efforts to cause such amendment
and/or new Registration Statement to become effective as soon as practicable following the filing thereof. For purposes of the
foregoing provision, the number of shares available under a Registration Statement shall be deemed “insufficient to cover
all of the Registrable Securities” if at any time the number of Registrable Securities issuable on an Advance Notice Date
is greater than the number of shares available for resale under such Registration Statement.
3. RELATED OBLIGATIONS.
a. The
Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof
as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required
to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company’s filing a
report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), the Company shall have incorporated such report by reference into the Registration Statement, if applicable, or
shall file such amendments or supplements with the SEC on the same day on which the Exchange Act report is filed which created
the requirement for the Company to amend or supplement the Registration Statement.
b. The
Company shall furnish to the Investor without charge, (i) at least one copy of such Registration Statement as declared effective
by the SEC and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference,
all exhibits and each preliminary prospectus, (ii) ten (10) copies of the final prospectus included in such Registration
Statement and all amendments and supplements thereto (or such other number of copies as such Investor may reasonably request) and
(iii) such other documents as such Investor may reasonably request from time to time in order to facilitate the disposition
of the Registrable Securities owned by such Investor.
c. The
Company shall use its best efforts to (i) register and qualify the Registrable Securities covered by a Registration Statement
under such other securities or “blue sky” laws of such jurisdictions in the United States as the Investor reasonably
requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements
to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period,
(iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times
during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition
thereto to (w) make any change to its certificate of incorporation or by-laws, (x) qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section 3(d), (y) subject itself to general taxation
in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall
promptly notify the Investor of the receipt by the Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.
d. As
promptly as practicable after becoming aware of such event or development, the Company shall notify the Investor in writing of
the happening of any event as a result of which the prospectus included in a Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading (provided that in no event shall
such notice contain any material, nonpublic information), and promptly prepare a supplement or amendment to such Registration Statement
to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to each Investor.
The Company shall also promptly notify the Investor in writing (i) when a prospectus or any prospectus supplement or post-effective
amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification
of such effectiveness shall be delivered to the Investor by facsimile on the same day of such effectiveness), (ii) of any
request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and
(iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be
appropriate.
e. The
Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction within the
United States of America and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify the Investor of the issuance of such order and the resolution thereof or its receipt
of actual notice of the initiation or threat of any proceeding for such purpose.
f. At
the reasonable request of the Investor, the Company shall furnish to the Investor, on the date of the effectiveness of the Registration
Statement and thereafter from time to time on such dates as the Investor may reasonably request (i) a letter, dated such date,
from the Company’s independent certified public accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering, and (ii) an opinion, dated as of such date,
of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the Investor.
g. The
Company shall make available to the Investor (i) copies of any draft Registration Statement at least 3 business days prior
to filing thereof, and (ii) subject to restrictions imposed by the United States federal government or any agency or instrumentality
thereof, copies of all public correspondence between the Commission and the Company concerning the Registration Statement. The
Company will make available for inspection by the Investor and any attorney, accountant or other professional retained by the Investor
(collectively, the “Inspector ”) all pertinent financial and other records, and pertinent corporate documents
and properties of the Company (collectively, the “Records”), as shall be reasonably necessary to enable them
to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information
which any Inspector may reasonably request in connection with the Registration Statement. The Investor agrees that Records obtained
by it as a result of such inspections which is conspicuously marked by the Company as “Confidential” (subject to the
Company’s obligations with respect to material non-public information set forth in Section 8.1(a) herein) shall be deemed
confidential and held in strict confidence by the Investor, unless (a) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in any Registration Statement or is otherwise required under the Securities Act, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent
jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure
in violation of this or any other agreement of which the Inspector and the Investor has knowledge. The Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction
or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential.
h. The
Company shall hold in confidence and not make any disclosure of information concerning the Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure
of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release
of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of
competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure
in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such
information concerning the Investor is sought in or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to the Investor and allow the Investor, at the Investor’s expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such information.
i. The
Company shall use its best efforts either to cause all the Registrable Securities covered by a Registration Statement (i) to
be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if
any, if the listing of such Registrable Securities is then permitted under the rules of such exchange or to secure the inclusion
for quotation on a Primary Market. The Company shall pay all fees and expenses in connection with satisfying its obligation under
this Section 3(i).
j. The
Company shall cooperate with the Investor to the extent applicable, to facilitate the timely preparation and delivery of certificates
(not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement
and enable such certificates to be in such denominations or amounts, as the case may be, as the Investor may reasonably request
and registered in such names as the Investor may request.
k. The
Company shall use its best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable
Securities.
l. The
Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after
the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 under the
Securities Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next
following the effective date of the Registration Statement.
m. The
Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC in connection with
any registration hereunder.
n. Within
two (2) business days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC,
the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investor) confirmation that such Registration Statement has been declared effective by the SEC in
the form attached hereto as Exhibit A.
o. The
Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable
Securities pursuant to a Registration Statement. The Commitment Shares in the Investment Agreement between the Company and Investor
shall be accepted by the Investor’s brokerage account prior to an Advance Notice being sent to the Investor.
4. OBLIGATIONS OF THE INVESTOR.
The Investor
agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(d),
the Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering
such Registrable Securities until the Investor’s receipt of the copies of the supplemented or amended prospectus contemplated
by Section 3(d) or receipt of notice that no supplement or amendment is equired. Notwithstanding anything to the contrary, the
Company shall cause its transfer agent to deliver unlegended certificates for shares of Common Stock to a transferee of the Investor
in accordance with the terms of the Investment Agreement in connection with any sale of Registrable Securities with respect to
which the Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the
happening of any event of the kind described in Section 3(d) and for which the Investor has not yet settled.
5. EXPENSES OF REGISTRATION.
All expenses
incurred in connection with registrations pursuant to Section 2, including, without limitation, all registration and listing fees,
legal and accounting fees shall be paid by the Investor. All expenses incurred in connection with qualifications pursuant to Sections 3,
including, without limitation, all registration, listing and qualifications fees, printers, legal and accounting fees shall be
paid by the Company.
6. INDEMNIFICATION .
With respect
to Registrable Securities which are included in a Registration Statement under this Agreement:
a. To
the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, the directors,
officers, partners, employees, agents, representatives of, and each Person, if any, who controls the Investor within the meaning
of the Securities Act or the Exchange Act (each, an “Indemnified Person”), against any and all losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement
or expenses, joint or several (collectively, “Claims”) incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party
is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any
untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto
or in any filing made in connection with the qualification of the offering under the securities or other “blue sky”
laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading;
(ii) any untrue statement or alleged untrue statement of a material fact contained in any final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading; or (iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation there
under relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, “Violations”). The Company shall reimburse the Investor
and each such controlling person promptly as such expenses are incurred and are due and payable, for any legal fees or disbursements
or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (x) shall not
apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement thereto; (y) shall not be available to the extent
such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company,
if such prospectus was timely made available by the Company pursuant to Section 3(e); and (z) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent
shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by
or on behalf of the Indemnified Person.
b. In
connection with a Registration Statement, the Investor agrees to indemnify, hold harmless and defend, to the same extent and in
the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration
Statement and each Person, if any, who
controls the Company within the
meaning of the Securities Act or the Exchange Act (each an “Indemnified Party”), against any Claim or Indemnified
Damages to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim
or Indemnified Damages arise out of or is based upon any Violation, in each case to the extent, and only to the extent, that such
Violation occurs in reliance upon and in conformity with written information furnished to the Company by the Investor expressly
for use in connection with such Registration Statement; and, subject to Section 6(d), the Investor will reimburse any legal
or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7
shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of
the Investor, which consent shall not be unreasonably withheld; provided, further, however, that the Investor shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to the Investor as
a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such Indemnified Party. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 6(b) with respect to any prospectus shall not inure to
the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the prospectus was corrected
and such new prospectus was delivered to the Investor prior to the Investor’s use of the prospectus to which the Claim relates.
c. Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action
or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to
the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of
the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified
Party, as the case may be; provided, however, that an Idemnified Person or Indemnified Party shall have the right to retain its
own counsel with the fees and expenses of not more than one counsel for such Indemnified Person or Indemnified Party to be paid
by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such
counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such
proceeding. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which relates to such action or claim. The indemnifying party
shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay
or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified
Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated
to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating
to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability
to defend such action.
d. The
indemnification required by this Section 6 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 Indemnified Damages are incurred.
e. The
indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified
Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may
be subject to pursuant to the law.
7. CONTRIBUTION.
To the extent
any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted
by law; provided, however, that: (i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who
was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited
in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.
8. REPORTS UNDER THE EXCHANGE
ACT.
With a view
to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any similar rule or regulation
of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration (“Rule 144”)
the Company agrees to:
a. make
and keep public information available, as those terms are understood and defined in Rule 144;
b. file
with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange
Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall limit the Company’s
obligations under Section 6.3 of the Investment Agreement) and the filing of such reports and other documents is required
for the applicable provisions of Rule 144; and
c. furnish
to the Investor so long as the Investor owns Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a
copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company,
and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to
Rule 144 without registration.
9. AMENDMENT OF REGISTRATION
RIGHTS.
Provisions
of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only by a written agreement between the Company and the Investor. Any amendment or waiver effected
in accordance with this Section 9 shall be binding upon the Investor and the Company. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any provision of any of this Agreement unless the same consideration
also is offered to all of the parties to this Agreement.
10. MISCELLANEOUS.
a. A
Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the
same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered
owner of such Registrable Securities.
b. Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one business day after deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:
If
to the Company: robert@ihookupsocial.com
If
to the Investor: rmarino@beaufortcp.com
Any party may change its address
by providing written notice to the other parties hereto at least five days prior to the effectiveness of such change. Written confirmation
of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.
c. Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
d.
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than
the State of New York. Any dispute arising out of or in connection with this Agreement or otherwise relating to the parties relationship
that cannot be settled by the Company and the Investor after discussion shall be settled solely by arbitration. Any such arbitration
shall be fully and finally resolved in binding arbitration in a proceeding in the State of New York, City of New York, in accordance
with the rules of the American Arbitration Association before a single arbitrator. The arbitrator shall not have the authority
to modify or change any of the terms of this Agreement. The arbitrator may award interim relief and grant specific performance
in addition to monetary damages. The Company and the Investor further agree that no demand for punitive or exemplary damages shall
be made in any arbitration proceeding. Any monetary award shall be in U.S. dollars. The arbitrator's award shall be final
and binding upon the parties, and judgment upon the award may be entered in any court of competent jurisdiction in any state of
the United States or country or application may be made to such court for a judicial acceptance of the award and an enforcement
as the law of such jurisdiction may require or allow.
e. This
Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.
f. The
headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
g. This
Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission
of a copy of this Agreement bearing the signature of the party so delivering this Agreement.
h. Each
party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
i. The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules
of strict construction will be applied against any party.
j. This
Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any other Person.
[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK]
IN WITNESS
WHEREOF, the parties have caused this Registration Rights Agreement to be duly executed as of day and year first above written.
| |
COMPANY: |
| |
iHookup Social, Inc. |
| |
|
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By /s/Robert Rositano |
| |
|
| |
Name: Robert Rositano Jr. |
| |
Title: President |
| |
|
| |
INVESTOR: |
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Beaufort Capital Partners LLC |
| |
|
| |
By: /s/Robert Marino |
| |
|
| |
Name: Robert Marino |
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Title: Managing Member |
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
Attention:
Re: iHookup Social, Inc.
Ladies and Gentlemen:
We are counsel
to iHookup Social, Inc. (the “Company”), and have represented the Company in connection with that certain
Investment Agreement (the “Investment Agreement”) entered into by and between the Company and Beaufort Capital
Partners LLC (the “Investor”) pursuant to which the Company issued to the Investor shares of its Common Stock,
par value $.0001 per share (the “Common Stock”). Pursuant to the Investment Agreement, the Company also has
entered into a Registration Rights Agreement with the Investor (the “Registration Rights Agreement”) pursuant
to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights
Agreement) under the Securities Act of 1933, as amended (the “Securities Act”). In connection with the Company’s
obligations under the Registration Rights Agreement, on June 25, 2014 the Company filed a Registration Statement on Form _____ (File
No. 333- _____ ) (the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the Registrable Securities which names the Investor as a selling stockholder thereunder.
In connection
with the foregoing, we advise you that a member of the SEC’s staff has advised us by telephone that the SEC has entered an
order declaring the Registration Statement effective under the Securities Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER
DATE OF EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop
order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by,
the SEC and the Registrable Securities are available for resale under the Securities Act pursuant to the Registration Statement.
cc: Beaufort Capital Partners
LLC
EX 10.71
ESCROW AGREEMENT
This ESCROW AGREEMENT
(this “Agreement”) made as of the 25th day of June, 2014 (the “Effective Date”), by and between
iHookup Social, Inc. (the “Company”), Beaufort Capital Partners LLC (the “Investor”), and
Matthew McMurdo, Esq. (the “Escrow Agent”).
WITNESSETH:
WHEREAS, the Investor
proposes to provide the legal expenses (the “Expenses”), on behalf of the Company, necessary to file a registration
statement on Form S-1 (the “S-1”), pursuant to a registration rights agreement, by and between the Investor
and the Company, dated June 25, 2014 (the “Registration Rights Agreement”);
WHEREAS, in return for
payment of the Expenses, the Company has agreed to deposit 3,000,000 shares of its common stock (the “Shares”)
into an escrow account (the “Escrow Account”); and
WHEREAS, the Escrow Agent
has agreed to hold the Shares as Escrow Agent pursuant to the terms of this agreement.
NOW, THEREFORE, in consideration
of the premises and mutual covenants herein contained, the parties hereto hereby agree as follows:
1. Deposit. The
Company shall promptly deliver a certificate covering the Shares, along with an executed stock power, to the Escrow Agent at the
following address:
Matthew McMurdo, Esq.
28 West 44th
Street
16th Floor
New York, NY 10036
2. Disbursement
of the Shares.
2.1 The Escrow Agent
shall deliver the Shares to the Company upon the Securities and Exchange Commission (the “SEC”) declaring the
S-1 effective.
2.2
Upon (i) a breach of any material term of the Registration Rights Agreement or the investment agreement, by and between
the Investor and the Company, dated May __, 2014, or (ii) the SEC rejecting the S-1 or the Company
withdrawing the S-1 prior to effectiveness, the Escrow Agent shall deliver the Shares to the Investor.
2.3 Upon disbursement
of the Shares, letter(s) of instruction and related documents, pursuant to the terms of Section 2.1 or 2.2, the Escrow Agent shall
be relieved of further obligations and released from all liability under this Agreement.
3. Rights, Duties
and Responsibilities of Escrow Agent. It is understood and agreed that the duties of the Escrow Agent are purely ministerial
in nature, and that:
3.1 The Escrow Agent
shall notify the parties hereto of his receipt of the Shares.
3.2 The Escrow Agent
shall not be responsible for the performance by the Company or the Investor of their respective obligations under this Agreement
or the Registration Rights Agreement.
3.3 If the Escrow Agent
is uncertain as to its duties or rights hereunder or shall receive instructions with respect to the Escrow Account which, in his
sole determination, are in conflict either with any provision of this Agreement, he shall deposit the Shares with the court for
the resolution of such dispute by final judgment of a court of competent jurisdiction or otherwise.
3.4 The Escrow Agent
shall not be liable for any action taken or omitted hereunder, or for the misconduct of any employee, agent or attorney appointed
by it, except in the case of willful misconduct or gross negligence. The Escrow Agent shall be entitled to consult with counsel
of its own choosing and shall not be liable for any action taken, suffered or omitted by it in accordance with the advice of such
counsel.
3.5 The Escrow Agent
shall have no responsibility at any time to ascertain whether or not any security interest exists in the Escrow Amount or any part
thereof or to file any financing statement under the Uniform Commercial Code with respect to the Escrow Amount or any part thereof.
4. Amendment; Resignation
or Removal of Escrow Agent. This Agreement may be altered or amended only with the written consent of the Company, the Investor
and the Escrow Agent. The Escrow Agent may resign and be discharged from its duties hereunder at any time by giving written notice
of such resignation to the Company and the Investor specifying a date when such resignation shall take effect and upon delivery
of the Shares to the successor escrow agent designated by the Company and Investor in writing. Such successor Escrow Agent shall
become the Escrow Agent hereunder upon the resignation date specified in such notice. If the Company and the Investor fail to designate
a successor Escrow Agent within thirty (30) days after such notice, then the resigning Escrow Agent shall promptly refund the Shares
to the Company. The Escrow Agent shall continue to serve until its successor accepts the escrow and receives the Shares. Upon its
resignation and delivery of the Shares as set forth in this Section 4, the Escrow Agent shall be discharged of and from any and
all further obligations arising in connection with the escrow contemplated by this Agreement. The resigning Escrow Agent shall
be entitled to be reimbursed by the Company and the Investor for any
expenses incurred in connection with its resignation,
transfer of the Shares to a successor escrow agent or distribution of the Shares pursuant to this Section 4.
5. Representations
and Warranties. The Company and the Investor hereby, severally represent and warrant to the Escrow Agent that:
5.1 No party other
than the parties hereto have, or shall have, any lien, claim or security interest in the Shares or any part thereof.
5.2 No financing statement
under the Uniform Commercial Code is on file in any jurisdiction claiming a security interest in or describing (whether specifically
or generally) the Shares or any part thereof.
5.3 All of the information
contained in this Agreement is, as of the date hereof, and will be, at the time of any disbursement of the Shares, true and correct.
6. Indemnification
and Contribution.
6.1 The Company and
the Investor (together, the “Indemnitors”) agree to indemnify the Escrow Agent and its officers, directors,
employees, agents and shareholders (collectively referred to as the “Indemnitees”) against, and hold them harmless
of and from, any and all loss, liability, cost, damage and expense, including without limitation, reasonable counsel fees, which
the Indemnitees may suffer or incur by reason of any action, claim or proceeding brought against the Indemnitees arising out of
or relating in any way to this Agreement or any transaction to which this Agreement relates, unless such action, claim or proceeding
is the result of the willful misconduct or gross negligence of any or all of the Indemnitees.
6.2 If the indemnification
provided for in Section 6.1 is applicable, but for any reason is held to be unavailable, the Indemnitors shall contribute such
amounts as are just and equitable to pay, or to reimburse the Indemnitees for, the aggregate of any and all losses, liabilities,
costs, damages and expenses, including counsel fees, actually incurred by the Indemnitees as a result of or in connection with,
and any amount paid in settlement of, any action, claim or proceeding arising out of or relating in any way to any actions or omissions
of the Indemnitors or any one of them.
6.3 The provisions
of this Article 6 shall survive any termination of this Agreement, whether by disbursement of the Escrow Amount, resignation of
the Escrow Agent or otherwise.
7. Termination
of Agreement. This Agreement shall terminate on the final disposition of the Shares pursuant to Section 2, provided that the
rights of the Escrow Agent and the obligations of the other parties hereto shall survive the termination hereof and the resignation
or removal of the Escrow Agent.
8. Governing Law
and Assignment. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, without
regard to the conflicts of laws principles thereof, and shall be binding, upon the parties hereto and their respective successors
and assigns; provided, however, that any assignment or transfer by any party of its rights under this Agreement or
with respect to the Escrow Amounts shall be void as against the Escrow Agent unless (a) written notice thereof shall be given to
the Escrow Agent; and (b) the Escrow Agent shall have consented in writing to such assignment or transfer.
9. Notices.
All notices required to be given in connection with this Agreement shall be sent by (i) facsimile transmission or email in portable
document format (.pdf), (ii) registered or certified mail, return receipt requested, (iii) hand delivery with receipt acknowledged,
or (iv) by the Express Mail service offered by the United States Postal Service, and addressed, if to the Buyer or Investor, at
their respective address set forth above, and if to the Escrow Agent, at its address set forth above.
10. Severability.
If any provision of this Agreement or the application thereof to any person or circumstance shall be determined to be invalid or
unenforceable, the remaining provisions of this Agreement or the application of such provision to persons or circumstances other
than those to which it is held invalid or unenforceable shall not be affected thereby and shall be valid and enforceable to the
fullest extent permitted by law.
11. Execution in
Several Counterparts. This Agreement may be executed in several counterparts or by separate instruments and by facsimile transmission,
and all of such counterparts and instruments shall constitute one agreement, binding on all of the parties hereto.
12. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings (written or oral) of the parties in connection therewith. If any conflict arises between
this Agreement and the Option Agreement, the Option Agreement shall control.
IN WITNESS WHEREOF, the undersigned have executed
this Agreement as of the day and year first above written.
MATTHEW MCMURDO, ESQ.
/s/Matthew McMurdo
______________________________
COMPANY
iHookup Social, Inc.
/s/Robert
Rositano
______________________________
Name:
Title CEO
INVESTOR
Beaufort Capital Partners LLC
/s/Robert
Marino
______________________________
Name:
Title: Managing Partner