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
Date of Report (Date of earliest event reported): July 23, 2014
Well Power, Inc.
(Exact name of registrant as specified in its charter)
Nevada |
000-53985 |
N/A |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
11111 Katy Freeway-Suite #910
Houston, Texas |
77079 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (713)
973-5738
___________________________________________________
(Former name or former address, if changed since
last report) |
Check the appropriate box below if the Form 8-K filing 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 (17CFR 230.425) |
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[ ] |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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[ ] |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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[ ] |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 - ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Premier Venture
On August 26, 2014, the Company entered into an Equity Purchase
Agreement and Registration Rights Agreement with Premier Venture Partners, LLC “Premier”) whereby Premier is obligated,
providing the Company has met certain conditions including the filing of a Form S-1 Registration Statement for the shares to be
acquired, to purchase up to Ten Million Dollars ($10,000,000) of the Company’s common stock at the rates set forth in the
Equity Purchase Agreement. Under the Equity Purchase Agreement the shares are purchased at the discretion of the Company by issuing
a Put Notice when funds are needed.
The foregoing description of the Equity Purchase Agreement and Registration
Rights Agreement is qualified in its entirety by reference to the full text of the Equity Purchase Agreement and Registration Rights
Agreement, which are included as exhibits to this Current Report on Form 8-K and are incorporated by reference.
Macallan Partners
On August 21, 2014, the Company entered into a convertible debenture
(the “Debenture”) with Macallan Partners, LLC (“Macallan”) pursuant to which the Company borrowed $133,000.
As of August 26, 2014, the Company received $120,006 with $12,994 retained by Macallan through an original issue discount.
Interest under the Debenture is 2% per annum, and the principal
and all accrued but unpaid interest is due on January 15, 2015. The Debenture is convertible at any time at Macallan’s option
into shares of the Company’s common stock at a variable conversion price of 45% of the lowest traded price during the 15
days prior to the notice of conversion, subject to adjustment as described in the Debenture.
The holder’s ability to convert the Debenture, however, is
limited in that it will not be permitted to convert any portion of the Debenture if the number of shares of the Company’s
common stock beneficially owned by the holder and its affiliates, together with the number of shares of our common stock issuable
upon any full or partial conversion, would exceed 4.99% of our outstanding shares of common stock.
During the first 180 days following the date of the note the Company
has the right to prepay the principal and accrued but unpaid interest due under the Debenture, together with any other amounts
we may owe the holder under the terms of the note, at a graduating premium ranging from 125% to 150%. After this initial 180 day
period, the Company does not have a right to prepay the Debenture.
The foregoing description of the Debenture is qualified in its entirety
by reference to the full text of the Debenture, which is included as an exhibit to this Current Report on Form 8-K and is incorporated
by reference.
Iconic Holdings
On August 6, 2014, the Company entered into a Note Purchase Agreement
and $275,000 10% Convertible Promissory Note (the “Iconic Note”) with Iconic Holdings, LLC (“Iconic”).
As of August 14, 2014 the Company received $100,000 with $10,000 retained by Iconic through an original issue discount. Under the
terms of the Iconic Note, the Company will receive principal in one or more installments with a Maturity Date for the Note of July
29, 2015. Iconic shall have the right to convert any unpaid sums into common stock of the Company at the rate of the lesser of
$.08 per share or 55% of the lowest trade reported in the 15 days prior to date of conversion, subject to adjustment as described
in the note.
During the first 180 days following the date of the note the Company
has the right to prepay the principal and accrued but unpaid interest due under the Iconic Note, together with any other amounts
we may owe the holder under the terms of the Iconic Note, at a graduating premium ranging from 125% to 135%. After this initial
180 day period, the Company does not have a right to prepay the note.
The holder’s ability to convert the Iconic Note, however,
is limited in that it will not be permitted to convert any portion of the note if the number of shares of the Company’s common
stock beneficially owned by the holder and its affiliates, together with the number of shares of our common stock issuable upon
any full or partial conversion, would exceed 9.99% of our outstanding shares of common stock.
The foregoing description of the Note Purchase Agreement and the
Iconic Note is qualified in its entirety by reference to the full text of the Note Purchase Agreement and Iconic Note, which are
included as exhibits to this Current Report on Form 8-K and are incorporated by reference.
Tarpon Bay Partners
On July 23, 2014, the Company entered into a $25,000 10% Convertible
Promissory Note (the “Tarpon Note”) with Tarpon Bay Partners, LLC (“Tarpon”). Under the terms of the Tarpon
Note, all principal and interest matures on January 30, 2015. Tarpon shall have the right to convert any unpaid sums into common
stock of the Company at the rate of 50% of the lowest closing bid price reported in the 20 days prior to date of conversion, subject
to adjustment as described in the note.
The holder’s ability to convert the note, however, is limited
in that it will not be permitted to convert any portion of the note if the number of shares of the Company’s common stock
beneficially owned by the holder and its affiliates, together with the number of shares of our common stock issuable upon any full
or partial conversion, would exceed 9.99% of our outstanding shares of common stock.
The foregoing description of the Tarpon Note is qualified in its
entirety by reference to the full text of the Tarpon Note, which is included as an exhibit to this Current Report on Form 8-K and
is incorporated by reference.
Maller
On July 25, 2014, the Company entered into a $10,000 8% Convertible
Promissory Note (the “Maller Note”) with Melvyn Maller. Under the terms of the Maller Note, all principal and interest
matures on July 25, 2015. Maller shall have the right to convert any unpaid sums into common stock of the Company at the rate of
the lesser of $.09 per share or 50% of the lowest trade reported in the 10 days prior to date of conversion, subject to adjustment
as described in the note.
The holder’s ability to convert the note, however, is limited
in that it will not be permitted to convert any portion of the note if the number of shares of the Company’s common stock
beneficially owned by the holder and its affiliates, together with the number of shares of our common stock issuable upon any full
or partial conversion, would exceed 4.99% of our outstanding shares of common stock.
The foregoing description of the Maller Note is qualified in its
entirety by reference to the full text of the Maller Note, which is included as an exhibit to this Current Report on Form 8-K
and is incorporated by reference.
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.03 - CREATION OF A DIRECT FINANCIAL OBLIGATION
The information provided in Item 1.01 of this Current Report on
Form 8-K is incorporated herein by reference.
SECTION 3 - SECURITIES AND TRADING MARKETS
ITEM 3.02 - UNREGISTERED SALES OF EQUITY SECURITIES
The information provided in Item 1.01 of this Current Report on
Form 8-K is incorporated herein by reference.
The above securities were issued pursuant to the exemption from
registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated
thereunder. The investors represented to us that they are accredited investors. We believe that the investors had adequate information
about us as well as the opportunity to ask questions and receive responses from our management.
Section 9 – Financial
Statements and Exhibits
Item 9.01 Financial Statements
and Exhibits
10.1 Equity Purchase Agreement
10.2 Registration Rights Agreement
10.3 Convertible Debenture
10.4 Note Purchase Agreement
10.5 Convertible Promissory Note
10.6 Convertible Promissory Note
10.7 Convertible Promissory Note
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.
Well Power, Inc.
/s/ Dan Patience
Dan Patience
President
Date: August 27, 2014
EQUITY PURCHASE AGREEMENT
This EQUITY PURCHASE AGREEMENT
(the "Agreement"), dated as of August 21, 2014 (the "Execution Date"), is entered into by and between Well
Power, Inc., a Nevada corporation with its principal executive office at 11111 Katy Freeway, Suite # 910, Houston, TX 77079 (the
"Company"), and Premier Venture Partners, LLC, a California limited liability company (the "Investor"), with
its principal executive officers at 4221 Wilshire Blvd., Suite 355, Los Angeles, CA 90010.
RECITALS
A.
The parties desire that, upon the terms and subject to the conditions contained herein, the
Investor shall invest up to Ten Million Dollars ($10,000,000) to purchase the Company's common stock par value $0.001 per share
(the "Common Stock");
B.
Such investments will be made in reliance upon the exemption from securities registration
afforded by Section 4(2) of the Securities Act of 1933, as amended (the "1933 Act"), Rule 506 of Regulation D promulgated
by the SEC under the 1933 Act, and/or upon such other exemption from the registration requirements of the 1933 Act as may be available
with respect to any or all of the sales of shares of the Common Stock made hereunder; and
C.
Contemporaneously with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement substantially in the form attached hereto as Exhibit A (the "Registration
Rights Agreement ") pursuant to which the Company has agreed to provide the Investor certain rights to register shares of
the Common Stock sold hereunder pursuant to the 1933 Act, and the rules and regulations promulgated thereunder, and applicable
state securities laws.
NOW THEREFORE, in consideration
of the foregoing recitals, which shall be considered an integral part of this Agreement, the covenants and agreements set forth
hereafter, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company
and the Investor hereby agree as follows:
SECTION 1
DEFINITIONS
1.1
For all purposes of and under this Agreement, the following terms shall have the respective
meanings below, and such meanings shall be equally applicable to the singular and plural forms of such defined terms.
"1933 Act" shall have the meaning
set forth in the recitals.
"1934 Act" shall mean the Securities
Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the SEC thereunder, all as the
same will then be in effect.
"Additional Commitment Shares" shall
mean the number of shares of Common Stock representing 2.5% of $10,000,000 divided by the sum equal to 70% multiplied by the lowest
of the daily VWAPs of the Common Stock on the three Trading Days immediately preceding the Threshold Date and with such shares
being duly authorized, validly issued, fully paid and nonassessable and which, the Company shall cause its transfer agent to issue
and deliver to the Investor not later than 4:00 p.m. (New York City time) on the second day immediately following the Threshold
Date.
"Affiliate" shall have the meaning
set forth in Section 5.7.
"Agreement " shall have the meaning
set forth inthe preamble.
"Articles of Incorporation " shall
have the meaning set forth in Section 4.3.
"By-laws" shall have the meaning
set forth in Section 4.3. "Closing" shall have the meaning set forth in Section 2.4. "Closing Date"shall have
the meaning set forth in Section 2.4. "Common Stock" shall have the meaning set forth in the recitals.
"Commitment Shares" shall mean the
Initial Commitment Shares and the Additional Commitment Shares.
"Control" or "Controls"
shall have the meaning set forth in Section 5.7.
"Effective Date" shall mean the date
the SEC declares effective under the 1933 Act the Registration Statement covering the Securities.
"Environmental Laws" shall have the
meaning set forth in Section 4.13. "Execution Date" shall have the meaning set forth in the preamble. "Indemnified
Liabilities" shall have the meaning set forth in Section 9. "lndemnitees" shall have the meaning set forth in Section
9. "lndemnitor" shall have the meaning set forth in Section 9.
"Initial Commitment Shares" shall
mean 3,955,070 shares of Common Stock representing 2.5% of $10,000,000 divided by the sum equal to 70% multiplied by the lowest
of the daily VWAPs of the Common Stock on the three Trading Days immediately preceding the Execution Date and with such shares
being duly authorized, validly issued, fully paid and nonassessable and which, concurrently with the execution and delivery of
this Agreement on the Execution Date, the Company has caused its transfer agent to issue and deliver to the Investor not later
than 4:00 p.m. (New York City time) on the second Trading Day immediately following the Execution Date.
"Ineffective Period" shall mean any
period of time that the Registration Statement or any supplemental registration statement becomes ineffective or unavailable for
use for the sale or resale, as applicable, of any or all of the Registrable Securities (as defined in the Registration
Rights Agreement) for any reason (or in the
event the prospectus under either of the above is not current and deliverable) during any time period required under the Registration
Rights Agreement.
"Investor" shall have the meaning
set forth in the preamble.
"Material Adverse Effect" shall have
the meaning set forth in Section 4.1.
"Maximum Common Stock Issuance" shall
have the meaning set forth in Section 2.6.
"Open Period" shall mean the period
beginning on and including the Tenth Trading Day after the Effective Date and ending on the earlier to occur of (i) the date which
is thirty-six (36) months from the Effective Date; or (ii) termination of the Agreement in accordance with Section
·
"Pricing Period" shall mean, with
respect to a particular Put Notice, the Five (5) Trading Days immediately after the applicable Put Notice Date unless extended
pursuant to Section 2.7.
"Principal Market" shall mean the
New York Stock Exchange, the NYSE Amex, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
OTCQX, the OTCQB, or the OTC Bulletin Board, whichever is the principal market on which the Common Stock is listed.
"Prospectus " shall mean the prospectus,
preliminary prospectus and supplemental prospectus used in connection with the Registration Statement.
"Purchase Amount" shall mean the
total amount being paid by the Investor on a particular Closing Date to purchase the Securities.
"Purchase Price" shall have the meaning
set forth in Section 2.5.
"Put" shall have the meaning set
forth in Section 2.2.
"Put Amount" shall have the meaning
set forth in Section 2.2.
"Put Notice" shall mean a written
notice sent to the Investor by the Company stating the Put Amount in Shares that the Company intends to sell to the Investor pursuant
to the terms of the Agreement and stating the current number of Shares issued and outstanding on such date.
"Put Notice Date" shall mean the
Trading Day on which the Investor receives a Put Notice, determined as follows: a Put Notice shall be deemed delivered on (a) the
Trading Day it is received by facsimile or otherwise by the Investor if such notice is received prior to 9:30 am Eastern Time,
or (b) the immediately succeeding Trading Day if it is received by facsimile or otherwise after 9:30 am Eastern Time on a Trading
Day. No Put Notice may be deemed delivered on a day that is not a Trading Day.
"Put Restriction" shall mean the
days between the beginning of the Pricing Period and Closing Date for a particular Put Notice. During this time, the Company shall
not be entitled to deliver another Put Notice.
"Registration Rights Agreement" shall
have the meaning set forth in the recitals.
"Registration Statement" means the
registration statement of the Company filed under the 1933 Act covering the resale of the Securities issuable hereunder by the
Investor, in the manner described in such Registration Statement.
"Related Party" shall have the meaning
set forth in Section 5.7. "Resolutions" shall have the meaning set forth in Section 7.5. "SEC" shall mean the
U.S. Securities and Exchange Commission. "SEC Documents" shall have the meaning set forth in Section 4.6.
"Securities" shall mean the shares
of Common Stock issuable pursuant to the terms of the Agreement.
"Shares" shall mean the shares of
the Company's Common Stock. "Subsidiaries" shall have the meaning set forth in Section 4.1.
"Threshold Date" shall mean the date
whereby Investor has purchased m the aggregate
$5,000,000 worth of Securities pursuant to
this Agreement.
"Trading Day" shall mean any day
on which the Principal Market for the Common Stock is open for trading, from the hours of 9:30 am until 4:00 pm.
"Transaction Documents" shall mean
this Agreement and the Registration Rights Agreement between the Company and the Investor as of the date herewith, and any other
agreements between the Company and the Investor executed in conjunction with this transaction.
"VWAP" means the volume weighted
average price (the aggregate sales price of all trades of Common Stock during a Trading Day divided by the total number of shares
of Common Stock traded during such Trading Day) of the Common Stock during a Trading Day.
SECTION 2
PURCHASE AND SALE OF COMMON STOCK
2.1
Purchase and Sale Of Common Stock. Subject to the terms and conditions set forth herein, the
Company shall issue and sell to the Investor, and the Investor shall purchase from the Company, up to that number of Shares having
an aggregate Purchase Price of Ten Million Dollars ($10,000,000).
2.2
Delivery of Put Notices. Subject to the terms and conditions of the Transaction Documents,
and from time to time during th:Open Period, the Company may, in its sole discretion, deliver a Put Notice to the Investor which
states the number of Shares that the Company intends to sell to the Investor on a Closing Date (the "Put"). The Put Notice
shall be in the form attached hereto as Exhibit B and incorporated herein by reference. The maximum number of Shares that the Company
shall be entitled to Put to the Investor per any applicable Put Notice (the "Put Amount") shall not exceed the lesser
of (i) 200% of the average daily trading volume of Company's common stock on the five Trading Days prior to the date the Put Notice
is received by Investor and (ii) 110% of any previous Put Amount during the Open Period (or for the first Put Notice, 2,000,000
shares). Notwithstanding the preceding sentence, the Put Amount cannot exceed 4.99% of the outstanding shares of the Company. During
the Open Period, the Company shall not be entitled to submit a Put Notice until after the previous Closing has been completed.
2.3
Conditions to Investor's Obligation To Purchase Shares. Notwithstanding anything to the contrary
in this Agreement, the Company shall not be entitled to deliver a Put Notice and the Investor shall not be obligated to purchase
any Shares at a Closing unless each of the following conditions are satisfied:
(a)
a Registration Statement shall have been declared effective and shall remain effective
and available for the resale of all the Registrable Securities (as defined in the Registration Rights Agreement) at all times until
the Closing with respect to the subject Put Notice;
(b)
at all times during the period beginning on the related Put Notice Date and ending
on and including the related Closing Date, the Common Stock (i) shall have been listed or quoted for trading on the Principal Market,
(ii) shall not have been suspended from trading thereon, and (iii) the Company shall not have been notified of any pending or threatened
proceeding or other action to suspend the trading of the Common Stock;
(c)
the Company has complied with its obligations and is otherwise not in breach of or
in default under, this Agreement, the Registration Rights Agreement or any other agreement executed in connection herewith which
has not been cured prior to delivery of the Investor's Put Notice Date;
(d)
no injunction shall have been issued and remain in force, or action commenced by a
governmental authority which has not been stayed or abandoned, prohibiting the purchase or the issuance of the Securities; and
(e)
the issuance of the Securities will not violate any shareholder approval requirements
of the Principal Market.
(f)
If any of the events described in clauses (a) through (e) above occurs during a Pricing
Period, then the Investor shall have no obligation to purchase the Put Amount of Common Stock set forth in the applicable Put Notice.
2.4
Mechanics Of Purchase Of Shares By Investor. Subject to the satisfaction of the conditions
set forth in Sections 2.3, 7 and 8 of this Agreement, the closing of the purchase by the Investor of Shares (a "Closing")
shall occur on the date which is the sixth (6) Trading Day following the applicable Put Notice Date (each a "Closing Date").
Upon each such Closing Date, the Company shall use all commercially reasonable efforts to cause its transfer agent to electronically
transmit the Securities by crediting the account of the Investor's prime broker (as specified by the Investor within a time reasonably
in advance of the Investor's notice) with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. Within
one business day after receipt of the Securities, the Investor shall deliver to the Company the Purchase Price to be paid for such
shares, determined as set forth in Section 2.5. Notwithstanding the preceding sentence, to the extent that the Purchase Price for
any particular Put would exceed $150,000, then the amount over $150,000 may be paid by the Investor within 15 Trading Days after
Investor's receipt of the Securities.
2.5
Purchase Price. The Purchase Price for the Securities for each Put shall be the Put Amount
multiplied by seventy percent (70%) of the lowest individual daily VWAP of the Common Stock during the Pricing Period less six
hundred dollars ($600.00).
2.6
Overall limit on common stock issuable. Notwithstanding anything contained herein to the contrary,
if during the Open 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 number of Shares issuable by the Company and purchasable by the Investor, shall not
exceed that number of the shares of Common Stock that may be issuable without shareholder approval (the "Maximum Common Stock
Issuance"). If such issuance of shares of Common Stock 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 the
Articles of Incorporation of the Company, if such issuance of shares of Common Stock could cause a delisting on the Principal Market.
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 Securities or the Investor's obligation in accordance with
the terms and conditions hereof to purchase a number of 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
2.6.
2.7
Failure to Deliver Shares. If after one Trading Day following any Closing Date, the Company
has failed to deliver any Securities pursuant to this Agreement (and such failure is not caused by the Investor), then the Pricing
Period for such Put Notice shall be extended from the fifth Trading Day following a Put Notice until the date which is the Trading
Day immediately prior to the date which the Securities are actually received by the Investor.
2.8
Limitation On Amount Of Ownership. Notwithstanding anything to the contrary in this Agreement,
in no event shall the Investor be entitled to purchase that number of Shares, which when added to the sum of the number of shares
of Common Stock beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3 of the 1934 Act), by the Investor,
would exceed 4.99% of the number of shares of Common Stock outstanding on the Closing Date, as determined in accordance with Rule
13d-1G) of the 1934 Act.
SECTION 3
INVESTOR'S REPRESENTATIONS, WARRANTIES AND
COVENANTS
The Investor represents
and warrants to the Company, and covenants, that:
3.1
Sophisticated Investor. The Investor has, by reason of its business and financial experience,
such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type
that it is capable of (i) evaluating the merits and risks of an investment in the Securities and making an informed investment
decision; (ii) protecting its own interest; and (iii) bearing the economic risk of such investment for an indefinite period of
time.
3.2
Authorization; Enforcement. This Agreement has been duly and validly authorized, executed
and delivered on behalf of the Investor and is a valid and binding agreement of the Investor enforceable against the Investor in
accordance with its terms, subject to enforceability to general principles of equity and to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
3.3
Section 9 of the 1934 Act. During the term of this Agreement, the Investor will comply with
the provisions of Section 9 of the 1934 Act, and the rules promulgated thereunder, with respect to transactions involving the Common
Stock. The Investor agrees not to sell the Company's stock short, either directly or indirectly through its affiliates, principals
or advisors, during the term of this Agreement.
3.4
Accredited Investor. Investor is an "Accredited Investor" as that term is defined
in Rule 50l(a) of Regulation D of the 1933 Act.
3.5
No conflicts. The execution, delivery and performance of the Transaction Documents by the
Investor and the consummation by the Investor of the transactions contemplated hereby and thereby will not result in a violation
of operating agreement or other organizational documents of the Investor.
3.6
Opportunity to Discuss. The Investor has received all materials relating to the Company's
business, finance and operations which it has requested. The Investor has had an opportunity to discuss the business, management
and financial affairs of the Company with the Company's management.
3.7
Investment Purposes. The Investor is purchasing the Securities for its own account for investment
purposes and not with a view towards distribution and agrees to resell or otherwise dispose of the Securities solely in accordance
with the registration provisions of the 1933 Act (or pursuant to an exemption from such registration provisions).
3.8
No Registration as a Dealer. The Investor is not and will not be required to be registered
as a "dealer" under the 1934 Act, either as a result of its execution and performance of its obligations under this Agreement
or otherwise.
3.9
Good Standing. The Investor is a limited liability company, duly organized, validly existing
and in good standing in the State of California.
3.10
Tax Liabilities. The Investor understands that it is liable for its own tax liabilities.
3.11
Regulation M. The Investor will comply with Regulation M under the 1934 Act, if applicable.
3.12
No short sales. No short sales shall be permitted by the Investor or its affiliates during
the period commencing on the Execution Date and continuing through the termination of this Agreement.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Schedules attached
hereto, or as disclosed on the Company's SEC Documents, the Company represents and warrants to the Investor that:
4.1
Organization and Qualification. The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Nevada, and has the requisite corporate power and authorization to own its properties
and to carry on its business as now being conducted. Both the Company and the companies it owns or controls ("Subsidiaries")
are duly qualified to do business and are in good standing in every jurisdiction in which its ownership of property or 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. As used in this Agreement, "Material Adverse Effect "means
a change, event, circumstance, effect or state of facts that has had or is reasonably likely to have, a material adverse effect
on the business, properties, assets, operations, results of operations, financial condition or prospects of the Company and its
Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements and instruments to be entered
into in connection herewith, or on the authority or ability of the Company to perform its obligations under the Transaction Documents.
4.2
Authorization; Enforcement; Compliance with Other Instruments.
(a)
The Company has the requisite corporate power and authority to enter into and perform this
Investment Agreement and the Registration Rights Agreement (collectively, the "Transaction Documents"), and to issue
the Securities in accordance with the terms hereof and thereof.
(b)
The execution and delivery of the Transaction Documents by the Company and the consummation
by it of the transactions contemplated hereby and thereby, including without limitation the issuance of the Securities pursuant
to this Agreement, have been duly and validly authorized by the Company's Board of Directors and no further consent or authorization
is required by the Company and its Board of Directors, and no further consent or authorization is currently required by its shareholders.
(c)
The Transaction Documents have been duly and validly executed and delivered by the Company.
(d)
The Transaction Documents 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.
4.3
Capitalization. As of the date hereof, the authorized capital stock of the Company consists
of, 4,500,000,000 shares of the Common Stock, par value $0.001 per share, of which as of the date hereof, there are at least 107,931,034
shares issued and outstanding. All of such outstanding shares have been, or upon issuance will be, validly issued and are fully
paid and nonassessable.
Except as disclosed in the Company's publicly
available filings with the SEC:
(a)
no shares of the Company's capital stock are subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company;
(b)
there are no outstanding debt securities;
(c)
there are no outstanding shares of capital stock, 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;
(d)
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 1933 Act (except the Registration Rights Agreement);
(e)
there are no outstanding securities of the Company or any of its Subsidiaries which contain
any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries;
(f)
there are no securities or instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of the Securities as described in this Agreement;
(g)
the Company does not have any stock appreciation rights or "phantom stock" plans
or agreements or any similar plan or agreement; and capital stock.
(h)
there is no dispute as to the classification of any shares of the Company's
The Company has furnished to the Investor,
or the Investor has had access through EDGAR to, true and correct copies of the Company's Articles of Incorporation, as in effect
on the date hereof (the "Articles 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.
4.4
Issuance of Shares. As of the Effective Date, the Company will have reserved the amount of
Shares included in the Registration Statement for issuance pursuant to the Transaction Documents, which will have been duly authorized
and reserved (subject to adjustment pursuant to the Company's covenant set forth in Section 5.5 below) pursuant to this Agreement.
Upon issuance in accordance with this Agreement, the Securities will be validly issued, fully paid for and non-assessable and free
from all taxes, liens and charges with respect to the issuance thereof. In the event the Company cannot reserve a sufficient number
of Shares for issuance pursuant to this Agreement, the Company will use its best efforts to authorize and reserve for issuance
the number of Shares required for the Company to perform its obligations hereunder as soon as reasonably practicable.
4.5
No Conflicts. The execution, delivery and performance of the Transaction Documents by the
Company and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation
of the Articles of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred
stock of the Company or the By-laws; or (ii) conflict with, or constitute a material default (or an event which with notice or
lapse of time or both would become a material default) under, or give to others any rights of termination , amendment, acceleration
or cancellation of, any material agreement, contract, indenture mortgage, indebtedness or instrument to which the Company or any
of its Subsidiaries is a party, or to the Company's knowledge result in a violation of any law, rule, regulation , order, judgment
or decree (including United States federal and state securities laws and regulations and the rules and regulations of the Principal
Market or principal securities exchange or trading market on which the Common Stock is traded or listed) applicable to the Company
or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected. Neither
the Company nor its Subsidiaries is in violation of any term of, or in default under, the Articles of Incorporation, any Certificate
of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the By laws or their organizational
charter or by-laws, respectively, or any contract, agreement, mortgage, indebtedness, indenture, instrument, judgment , decree
or order or any statute, rule or regulation applicable to the Company or its Subsidiaries, except for possible conflicts, defaults,
terminations , amendments, accelerations, cancellations and violations that would not individually or in the aggregate have or
constitute a Material Adverse Effect. The business of the Company and its Subsidiaries is not being conducted, and shall not be
conducted, in violation of any law, statute, ordinance, rule, order or regulation of any governmental authority or agency, regulatory
or self-regulatory agency, or court, except for possible violations the sanctions for which either individually or in the aggregate
would not have a Material Adverse Effect. Except as specifically contemplated by this Agreement and as required under the 1933
Act or any securities laws of any states, to the Company's knowledge, the Company is not required to obtain any consent, authorization,
permit or order of, or make any filing or registration (except the filing of a registration statement as outlined in the Registration
Rights Agreement between the parties) with, any court, governmental authority or agency, regulatory or self-regulatory agency or
other third party in order for it to execute, deliver or perform any of its obligations under, or contemplated by, the Transaction
Documents in accordance with the terms hereof or thereof. All consents, authorizations, permits, 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 and are in full force and effect as of the date hereof. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company is not, and will not be, in violation of the listing requirements of
the Principal Market as in effect on the date hereof and on each of the Closing Dates and is not aware of any facts which would
reasonably lead to delisting of the Common Stock by the Principal Market in the foreseeable future.
4.6
SEC Documents; Financial Statements. As of the date hereof, the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements
of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements
and schedules thereto and documents incorporated by reference therein, and amendments thereto, being hereinafter referred to as
the "SEC Documents"). The Company has delivered to the Investor or its representatives, or they have had access through
EDGAR to, true and complete copies of the SEC Documents. As of their respective filing dates, the SEC Documents complied in all
material respects with the requirements of the 1934 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 or the time they were amended, if
amended, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 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, by a firm that is a member of the Public
Companies Accounting Oversight Board ("PCAOB") 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). No other written information provided
by or on behalf of the Company to the Investor which is not included in the SEC Documents, including, without limitation, information
referred to in Section 4.3 of this Agreement, contains any untrue statement of a material fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstance under which they are or were made, not misleading. Neither
the Company nor any of its Subsidiaries or any of their officers, directors, employees or agents have provided the Investor with
any material, nonpublic information which was not publicly disclosed prior to the date hereof and any material, nonpublic information
provided to the Investor by the Company or its Subsidiaries or any of their officers, directors, employees or agents prior to any
Closing Date shall be publicly disclosed by the Company prior to such Closing Date.
4.7
Absence of Certain Changes. Except as otherwise set forth in the SEC Documents, the Company
does not intend to change the business operations of the Company in any material way. The Company has not taken any steps, and
does not currently expect to take any steps, to seek protection pursuant to any bankruptcy law nor does the Company or its Subsidiaries
have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings.
4.8
Absence of litigation and/or Regulatory Proceedings. Except as set forth in the SEC Documents,
there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the executive officers of Company or any of its Subsidiaries, threatened against
or affecting the Company, the Common Stock or any of the Company's Subsidiaries or any of the Company's or the Company's Subsidiaries'
officers or directors in their capacities as such, in which an adverse decision could have a Material Adverse Effect.
4.9
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 purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby. The Company further acknowledges that the Investor is not acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
hereby and thereby and any advice given by the Investor or any of its respective representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Investor's purchase of the
Securities, and is not being relied on by the Company. The Company further represents to the Investor that the Company's decision
to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.
4.10
No Undisclosed Events, Liabilities, Developments or Circumstances. Except as set forth in
the SEC Documents or required with respect to the Transaction Documents, as of the date hereof, no event, liability, development
or circumstance has occurred or exists, or to the Company's knowledge is contemplated to occur, with respect to the Company or
its Subsidiaries or their respective business, properties, assets, prospects, operations or financial condition, that would be
required to be disclosed by the Company under applicable securities laws on a registration statement filed with the SEC relating
to an issuance and sale by the Company of its Common Stock and which has not been publicly announced.
4.11
Employee Relations. Neither the Company nor any of its Subsidiaries is involved in any union
labor dispute nor, to the knowledge of the Company or any of its Subsidiaries, is any such dispute threatened. Neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that
relations with their employees are good. No executive officer (as defined in Rule 501(f) of the 1933 Act) has notified the Company
that such officer intends to leave the Company's employ or otherwise terminate such officer's employment with the Company.
4.12
Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights
or licenses to use all 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. Except as set forth in the SEC Documents, none of the Company's trademarks, trade names, service marks,
service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, government authorizations,
trade secrets or other intellectual property rights necessary to conduct its business as now or as proposed to be conducted have
expired or terminated, or are expected to expire or terminate within two (2) years from the date of this Agreement. 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, or of any such development of similar or identical trade secrets or technical information
by others and, except as set forth in the SEC Documents, 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. The Company and its Subsidiaries have taken commercially reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties.
4.13
Environmental Laws. The Company and its Subsidiaries (i) are, to the knowledge of the management
and directors of the Company and its Subsidiaries, in compliance with any and all applicable 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, to the knowledge of the management and directors
of the Company, received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) are in compliance, to the knowledge of the management and directors of the Company, with
all terms and conditions of any such permit, license or approval where, in each of the three (3) foregoing cases, the failure to
so comply would have, individually or in the aggregate, a Material Adverse Effect.
4.14
Title. The Company and its Subsidiaries have good and marketable title to all personal property
owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the SEC Documents or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of such property by the Company or any of its Subsidiaries.
Any real property and facilities held under lease by the Company or any of 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.
4.15
Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as management of the Company reasonably believes to
be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any of
its Subsidiaries has been refused any insurance coverage sought or applied for and neither the Company nor its Subsidiaries has
any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material
Adverse Effect.
4.16
Regulatory Permits. The Company and its Subsidiaries have in full force and effect all certificates,
approvals, authorizations and permits from the appropriate federal, state, local or foreign regulatory authorities and comparable
foreign regulatory agencies, necessary to own, lease or operate their respective properties and assets and 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, approval, authorization or permit, except for such certificates, approvals, authorizations
or permits which if not obtained, or such revocations or modifications which, would not have a Material Adverse Effect.
4.17
Internal Accounting Controls. Except as otherwise set forth in the SEC Documents, the Company
and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles by a firm
with membership to the PCAOB and to maintain asset accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any differences. The Company's management has determined
that the Company's internal accounting controls were not effective as of the date of this Agreement as further described in the
SEC Documents.
4.18
No Materially Adverse Contracts, 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. Neither the Company nor any of its
Subsidiaries is a party to any contract or agreement which in the judgment of the Company's officers has or is expected to have
a Material Adverse Effect.
4.19
Tax Status. The Company and each of its Subsidiaries has made or filed all United States federal
and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (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) and 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.
4.20
Certain Transactions. Except as set forth in the SEC Documents filed at least ten (I0) days
prior to the date hereof and except arm's length transactions pursuant to which the Company makes payments in the ordinary course
of business upon terms no less favorable than the Company could obtain from disinterested third parties and other than the grant
of stock options disclosed in the SEC Documents, none of the officers, directors, or employees of the Company is presently a party
to any transaction with the Company or any of its Subsidiaries (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, such that disclosure would be required in the
SEC Documents.
4.21
Dilutive Effect. The Company understands and acknowledges that the number of shares of Common
Stock 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 period between the Effective Date
and the end of the Open 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 Transaction Documents, its obligation to issue shares of Common Stock 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.
4.22
Lock-Up. The Company shall cause its officers, insiders, directors, and affiliates or other
related parties under control of the Company, to refrain from selling Common Stock during each Pricing Period.
4.23
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.
4.24
No brokers, finders or financial advisory fees or commissions. No brokers, finders or financial
advisory fees or commissions will be payable by the Company, its agents or Subsidiaries, with respect to the transactions contemplated
by this Agreement
4.25
FAST/ DWAC. The Company's transfer agent is participating in The Depository Trust Company
("DTC") Fast Automated Securities Transfer ("FAST") program and the Securities are eligible for inclusion in
the FAST program.
SECTION 5
COVENANTS OF THE COMPANY
5.1
Best efforts. The Company shall use all commercially reasonable efforts to timely satisfy
each of the conditions set forth in Section 7 of this Agreement.
5.2
Reporting status. Until one of the following occurs, the Company shall file all reports required
to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status, or take an action or fail to
take any action, which would terminate its status as a reporting company under the 1934 Act: (i) this Agreement terminates pursuant
to Section 8 and the Investor has the right to sell all of the Securities without restrictions pursuant to Rule 144 promulgated
under the 1933 Act, or such other exemption, or (ii) the date on which the Investor has sold all the Securities and this Agreement
has been terminated pursuant to Section 8.
5.3
Use of proceeds. The Company will use the proceeds from the sale of the Shares (excluding
amounts paid by the Company for fees as set forth in the Transaction Documents) for general corporate and working capital purposes
and acquisitions or assets, businesses or operations or for other purposes that the Board of Directors, in its good faith deem
to be in the best interest of the Company.
5.4
Financial information. During the Open Period, the Company agrees to make available to the
Investor via EDGAR or other electronic means the following documents and information on the forms set forth: (i) within five (5)
Trading Days after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q,
any Current Reports on Form 8-K and any Registration Statements or amendments filed pursuant to the 1933 Act; (ii) copies of any
notices and other information made available or given to the shareholders of the Company generally, contemporaneously with the
making available or giving thereof to the shareholders; and (iii) within two (2) calendar days of filing or delivery thereof, copies
of all documents filed with, and all correspondence sent to, the Principal Market, any securities exchange or market, or the Financial
Industry Regulatory Association, unless such information is material nonpublic information.
5.5
Reservation of Shares. The Company shall take all action necessary to, at all times, have
authorized and reserved the amount of Shares included in the Registration Statement for issuance pursuant to the Transaction Documents.
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 as described in this Section 5.5, 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.
5.6
Listing. The Company will promptly secure and maintain the listing of all of the Registrable
Securities (as defined in the Registration Rights Agreement) on the Principal Market and each other national securities exchange
and automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance)
and shall maintain, such listing of all Registrable Securities from time to time issuable under the terms of the Transaction Documents.
Neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting
or suspension of the Common Stock on the Principal Market (excluding suspensions of not more than one (1) Trading Day resulting
from business announcements by the Company). The Company shall promptly provide to the Investor copies of any notices it receives
from the Principal Market regarding the continued eligibility of the Common Stock for listing on such automated quotation system
or securities exchange. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section
5.6.
5.7
Transactions with Affiliates. The Company shall not 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.
5.8
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 Transaction Documents in the form required by the 1934 Act, if such filing is required.
5.9
Corporate existence. The Company shall use all commercially reasonable efforts to preserve
and continue the corporate existence of the Company.
5.10
Notice of Certain Events Affecting Registration; Suspension of Right To Make a Put. The Company
shall promptly notify the Investor upon the occurrence of any of the following events in respect of a Registration Statement or
related prospectus in respect of an offering of the Securities: (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 any 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 Securities for sale in any jurisdiction or the initiation or notice of any proceeding for such purpose; (iv) the
happening of any event that makes any statement made in such Registration Statement or related prospectus or 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 Registrable Securities from time to time issuable under the terms of the Transaction Documents. Neither the Company nor any
of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the Common
Stock on the Principal Market (excluding suspensions of not more than one (1) Trading Day resulting from business announcements
by the Company). The Company shall promptly provide to the Investor copies of any notices it receives from the Principal Market
regarding the continued eligibility of the Common Stock for listing on such automated quotation system or securities exchange.
The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 5.10.
5.11
Transfer Agent, Prime Broker. Upon the Effective Date, and for so long as the Registration
Statement is effective, the Company shall deliver instructions to its transfer agent to issue shares to the Investor that are covered
for resale by the Registration Statement, and the Company shall ensure that upon delivery to the transfer agent of evidence of
the sale of any such Shares in accordance with the Plan of Distribution section of the then current prospectus relating to such
Registration Statement, such Shares shall be issued to the purchaser electronically or if in certificate form, free of restrictive
legends in accordance with Section 3.11 of the Registration Rights Agreement. In addition, upon the Effective Date and upon any
Put Notice Date, Company's legal counsel shall, at Investor's request, provide an opinion letter addressed to the Company's transfer
agent and any Prime Broker of Investor's choosing, opining as to the availability of the sale of such Shares covered by the Registration
Statement by Investor.
5.12
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
CONDITIONS OF THE COMPANY'S OBLIGATION TO
SELL
The obligation hereunder of the Company to
issue and sell the Securities to the Investor is further subject to the satisfaction, at or before each Closing Date, of each of
the following conditions set forth below. These conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion.
6.1
The Investor shall have executed this Agreement and the Registration Rights Agreement and
delivered the same to the Company.
6.2
The representations and warranties of the Investor shall be true and correct as of the date
when made and as of the applicable Closing Date as though made at that time and the Investor shall have performed, satisfied and
complied with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied
with by the Investor on or before such Closing Date.
6.3
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 which prohibits the
consummation of any of the transactions contemplated by this Agreement.
SECTION 7
FURTHER CONDITIONS OF THE INVESTOR'S OBLIGATION
TO PURCHASE
The obligation of the Investor hereunder to
purchase Securities is subject to the satisfaction, on or before each Closing Date, of each of the following conditions set forth
below.
7.1
The Company shall have executed the Transaction Documents and delivered the same to the Investor.
7.2
The Common Stock shall be authorized for quotation on the Principal Market and trading in
the Common Stock shall not have been suspended by the Principal Market or the SEC, at any time beginning on the date hereof and
through and including the respective Closing Date (excluding suspensions of not more than one (1) Trading Day resulting from business
announcements by the Company, provided that such suspensions occur prior to the Company's delivery of the Put Notice related to
such Closing).
7.3
The representations and warranties of the Company shall be true and correct as of the date
when made and as of the applicable Closing Date as though made at that time and the Company shall have performed, satisfied and
complied with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied
with by the Company on or before such Closing Date. The Investor may request an update as of such Closing Date regarding the representation
contained in Section 4.3.
7.4
The Company shall have executed and delivered to the Investor the Securities being purchased
by the Investor at each Closing.
7.5
The Board of Directors of the Company shall have adopted resolutions consistent with Section
4.2(ii) (the "Resolutions") and such Resolutions shall not have been amended or rescinded prior to such Closing Date.
7.6
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 which prohibits the
consummation of any of the transactions contemplated by this Agreement.
7.7
The Registration Statement shall be effective on each Closing Date and no stop order suspending
the effectiveness of the Registration statement shall be in effect or to the Company's knowledge shall be pending or threatened.
Furthermore, on each Closing Date (i) neither the Company nor the Investor shall have received notice that the SEC has issued or
intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn
the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so (unless
the SEC's concerns have been addressed), and (ii) no other suspension of the use or withdrawal of the effectiveness of such Registration
Statement or related prospectus shall exist.
7.8
At the time of each Closing, the Registration Statement (including information or documents
incorporated by reference therein) and any amendments or supplements thereto shall 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
or which would require public disclosure or an update supplement to the prospectus.
7.9
If applicable, the shareholders of the Company shall have approved the issuance of any Shares
in excess of the Maximum Common Stock Issuance in accordance with Section 2.6 or the Company shall have obtained appropriate approval
pursuant to the requirements of Nevada law and the Company's Articles of Incorporation and By-laws.
7.10
The conditions to such Closing set forth in Section 2.3 shall have been satisfied on or before
such Closing Date.
7.11
The Company shall have certified to the Investor the number of Shares of Common Stock outstanding
when a Put Notice is given to the Investor. The Company's delivery of a Put Notice to the Investor constitutes the Company's certification
of the existence of the necessary number of shares of Common Stock reserved for issuance.
SECTION 8
TERMINATION
8.1
This Agreement shall terminate upon any of the following events:
(a)
when the Investor has purchased an aggregate of Ten Million Dollars ($10,000,000) in the Common
Stock of the Company pursuant to this Agreement;
(b)
on the date which is thirty-six (36) months after the Effective Date;
(c)
if at any time after the Effective Date, the Registration Statement is no longer in effect;
(d)
the trading of the Common Stock is suspended by the SEC, the Principal Market or FINRA for
a period of two (2) consecutive Trading Days during the Open Period; or,
(e)
the Common Stock ceases to be registered under the 1934 Act or listed or traded on the Principal
Market or the Registration Statement is no longer effective (except as permitted hereunder).. Immediately upon the occurrence of
one of the above-described events, the Company shall send written notice of such event to the Investor.
8.2
Any and all shares, or penalties, if any, due under this Agreement shall be immediately payable
and due upon termination of this Agreement.
SECTION 9
INDEMNIFICATION
In consideration of the
parties mutual obligations set forth in the Transaction Documents, each of the parties (in such capacity, an "Indemnitor")
shall defend, protect, indemnify and hold harmless the other and all of the other party 's shareholders, officers, directors, employees,
counsel, and direct or indirect investors and any of the foregoing person's agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the "Indemnitees")
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and reasonable expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees and disbursements (the "Indemnified Liabilities
"), incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any
representation or warranty made by the Indemnitor or any other certificate, instrument or document contemplated hereby or thereby;
(ii) any breach of any covenant, agreement or obligation of the Indemnitor contained in the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby; or (iii) any cause of action, suit or claim brought or made
against such Indemnitee by a third party and arising out of or resulting from the execution, delivery, performance or enforcement
of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, except insofar as
any such misrepresentation, breach or any untrue statement, alleged untrue statement, omission or alleged omission is made in reliance
upon and in conformity with information furnished to Indemnitor which is specifically intended for use in the preparation of any
such Registration Statement, preliminary prospectus , prospectus or amendments to the prospectus. To the extent that the foregoing
undertaking by the Indemnitor may be unenforceable for any reason, the Indemnitor shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. The indemnity provision s contained
herein shall be in addition to any cause of action or similar rights Indemnitor may have, and any liabilities the Indemnitor or
the Indemnitees may be subject to.
SECTION 10
MISCELLANEOUS
10.1
Fees. Except as otherwise set forth below or elsewhere in the Transaction Documents (including
but not limited to Section 5 of the Registration Rights Agreement), each party shall pay the fees and expenses of its advisers,
the accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. Any attorneys' fees and expenses incurred by either the Company or the Investor
in connection with the preparation , negotiation, execution and delivery of any amendments to this Agreement or relating to the
enforcement of the rights of any party, after the occurrence of any breach of the terms of this Agreement by another party or any
default by another party in respect of the transactions contemplated hereunder, shall be paid on demand by the party which breached
the Agreement and/or defaulted, as the case may be. The Company shall pay all stamp and other taxes and duties levied in connection
with the issuance of any Securities.
(a)
Initial Commitment Shares. In consideration for the Investor's execution and delivery of this
Agreement, concurrently with the execution and delivery of this Agreement on the Execution Date, the Company shall deliver irrevocable
instructions to its transfer agent to issue to the Investor, not later than 4:00 p.m. (New York City time) on the second Trading
Day immediately following the Execution Date, a certificate representing the Initial Commitment Shares in the name of the Investor
or its designee (in which case such designee name shall have been provided to the Company prior to the Execution Date). Such certificate
shall be delivered to the Investor by overnight courier at its address set forth in Section 10.7 hereof. For the avoidance of doubt,
all of the Initial Commitment Shares shall be fully earned as of the Execution Date, regardless of whether any Put Notices are
issued by the Company or settled hereunder. Upon issuance, the Initial Commitment Shares shall constitute "restricted securities"
as such term is defined in Rule 144(a)(3) under the Securities Act and, subject to the provisions of subsection (d) of this Section
10.1, the certificates representing the Initial Commitment Shares shall bear the restrictive legend set forth below in subsection
(c) of this Section 10.2. The Initial Commitment Shares shall constitute Registrable Securities and shall be included in the Registration
Statement in accordance with the terms of the Registration Rights Agreement.
(b)
Additional Commitment Shares. Upon the Threshold Date, the Company shall deliver irrevocable
instructions to its transfer agent to issue to the Investor not later than 4:00 p.m. (New York City time) on the second business
day immediately following the Threshold Date, a certificate representing the Additional Commitment Shares in the name of the Investor
or its designee (in which case such designee name shall have been provided to the Company prior to the Threshold Date). Such certificate
shall be delivered to the Investor by overnight courier at its address set forth in Section 10.7 hereof. For the avoidance of doubt,
all of the Additional Commitment Shares shall be fully earned as of the date required for delivery above. Upon issuance, the Additional
Commitment Shares shall constitute "restricted securities" as such term is defined in Rule 144(a)(3) under the Securities
Act and shall bear the restrictive legend set forth below in subsection (c) of this Section 10.2. The Additional Commitment Shares
shall not constitute Registrable Securities and shall not be included in the Registration Statement in accordance with the terms
of the Registration Rights Agreement
(c)
Legends. The certificate(s) representing the Commitment Shares, except as set forth below,
shall bear a restrictive legend in substantially the following form:
THE OFFER AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED
BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
(d)
Removal of Legend. From and after the Effective Date, the Company shall, no later than two
Trading Days following the delivery by the Investor to the Company or the Company's transfer agent (with notice to the Company)
of a legended certificate representing the Initial Commitment Shares (endorsed or with stock powers attached, signatures guaranteed,
and otherwise in form necessary to affect the reissuance and/or transfer, if applicable), as directed by the Investor, either:
(A) issue and deliver (or cause to be issued and delivered) to the Investor a certificate representing such Commitment Shares that
is free from all restrictive and other legends or (B) cause the Company's transfer agent to credit the Investor' s or its designee's
account at DTC through its Deposit/Withdrawal at Custodian (DWAC) system with a number of shares of Common Stock equal to the number
of Initial Commitment Shares represented by the certificate so delivered by the Investor (the date by which such certificate is
required to be delivered to the Investor or such credit is so required to be made to the account of the Investor or its designee
at DTC pursuant to the foregoing is referred to herein as the "Required Delivery Date"). If the Company fails on or prior
to the Required Delivery Date to either (i) issue and deliver (or cause to be issued and delivered) to the Investor a certificate
representing the Commitment Shares that is free from all restrictive and other legends or (ii) cause the Company's transfer agent
to credit the balance account of the Investor or its designee at DTC through its Deposit/Withdrawal at Custodian (DWAC) system
with a number of shares of Common Stock equal to the number of Commitment Shares represented by the certificate delivered by the
Investor pursuant hereto, then, in addition to all other remedies available to the Investor, the Company shall not be able to issue
a Put Notice to Investor. In addition, to the extent applicable or necessary, the Company shall cooperate with Investor to provide,
at Company's expense, any legal opinions required to sell any Commitment Shares pursuant to Rule 144 under the 1933 Act.
10.2
Law governing this agreement. This Agreement shall be governed by and construed in accordance
with the laws of the State of California without regard to principles of conflicts of laws. Any action brought by either party
against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of California
or in the federal courts located in Los Angeles County, California. The parties to this Agreement hereby irrevocably waive any
objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction
or venue or based upon forum non conveniens. The parties executing this Agreement and other agreements referred to herein or delivered
in connection herewith on behalf of the Company agree to submit to the in person am jurisdiction of such courts and hereby irrevocably
waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and
costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Documents by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to
limit in any way any right to serve process in any other manner permitted by law.
10.3
Counterparts. This Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts
shall constitute but one and the same instrument. This Agreement may be executed by facsimile transmission, PDF, electronic signature
or other similar electronic means with the same force and effect as if such signature page were an original thereof.
10.4
Headings; Singular/Plural. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement. Whenever required by the context of this Agreement
, the singular shall include the plural and masculine shall include the feminine.
10.5
Severability. If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement
in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
10.6
Entire agreement; amendments. This Agreement is the final agreement between the Company and
the Investor with respect to the terms and conditions set forth herein, and, the terms of this Agreement may not be contradicted
by evidence of prior, contemporaneous or subsequent oral agreements of the Parties.
10.7
Notices. Any notices 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 electronic mail (provided confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) 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:
Well Power, Inc.
Attn: Dan M. Patience
11111 Katy Freeway, Suite # 910
Houston, TX 77079
If to the Investor:
Premier Venture Partners, LLC
4221 Wilshire Blvd., Suite 355
Los Angeles, CA 90010
Fax: (323) 315-2273
Each party shall provide five (5) days prior
written notice to the other party of any change in address or facsimile number.
10.8
No assignment. This Agreement may not be assigned.
10.9
No third party beneficiaries. This Agreement is intended for the benefit of the parties hereto
and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except that the Company acknowledges
that the rights of the Investor may be enforced by its general partner.
10.10
Survival. The representations and warranties of the Company and the Investor contained in
Sections 3 and 4, the agreements and covenants set forth in Sections 5 and 6, and the indemnification provisions set forth in Section
9, shall survive each of the Closings and the termination of this Agreement.
10.11
Publicity. The Company and the Investor shall consult with each other in issuing any press
releases or otherwise making public statements 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 consent of the other party, which consent shall
not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law,
in which such case the disclosing party shall provide the other party with prior notice of such public statement. The Investor
acknowledges that this Agreement and all or part of the Transaction Documents may be deemed to be "material contracts"
as that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore be required to file such documents
as exhibits to reports or registration statements filed under the 1933 Act or the 1934 Act. The Investor further agrees that the
status of such documents and materials as material contracts shall be determined solely by the Company, in consultation with its
counsel.
10.12
Further assurances. 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.
10.13
No strict construction. 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, as
the parties mutually agree that each has had a full and fair opportunity to review this Agreement and seek the advice of counsel
on it.
10.14
Remedies. The Investor shall have all rights and remedies set forth in this Agreement and
the Registration Rights Agreement and all rights and remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which the Investor has by law. Any person having any rights under any provision of
this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages
by reason of any default or breach of any provision of Agreement, including the recovery of reasonable attorneys fees and costs,
and to exercise all other rights granted by law.
10.15
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 fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law,
state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred.
10.16
Pricing of common stock. For purposes of this Agreement, the VWAP of the Common Stock shall
be as reported on Bloomberg, L.P., Quotestream, or other applicable service.
SECTION 11
NON-DISCLOSURE OF NON-PUBLIC INFORMATION
The Company shall not disclose
non-public information to the Investor, its advisors, or its representatives.
Nothing in the Transaction
Documents shall require or be deemed to require the Company to disclose non-public information to the Investor or its advisors
or representatives, and the Company represents that it does not disseminate non-public information to any investors who purchase
stock in the Company in a public offering, to money managers or to securities analysts, provided, however, that notwithstanding
anything herein to the contrary, the Company will, as hereinabove provided, 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 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. In addition, neither the Company or any of its Subsidiaries, nor any of their respective directors,
officers, employees or agents shall disclose any material non-public information about the Company to the Investor, unless a simultaneous
public announcement thereof is made by the Company in the manner contemplated by Regulation FD. In the event of a breach of the
foregoing covenant by the Company or any of its Subsidiaries, or any of their respective directors, officers, employees and agents
(as determined in the reasonable good faith judgment of the Investor), (i) the Investor shall promptly provide written notice of
such breach to the Company and (ii) after such notice has been provided to the Company and in addition to any other remedy provided
herein or in the other Transaction Documents, the Investor shall have the right to make a public disclosure, in the form of a press
release, public advertisement or otherwise, of such material, non-public information without the prior approval by the Company,
any of its Subsidiaries, or any of their respective directors, officers, employees or agents; provided that the Company shall have
failed to publicly disclose such material, non-public information within 24 hours following such demand by the Investor. The Investor
shall not have any liability to the Company, any of its Subsidiaries, or any of their respective directors, officers, employees,
stockholders or agents, for any such disclosure.
SECTION 12
ACKNOWLEDGEMENTS OF THE PARTIES
Notwithstanding anything
in this Agreement to the contrary, the parties hereto hereby acknowledge and agree to the following: (i) the 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 short the Common Stock at any time during the Open Period; (ii) the Company shall comply with its obligations under Section
5.8 in a timely manner; (iii) the Company has not and shall not provide material non-public information to the Investor unless
prior thereto the Investor shall have executed a written agreement regarding the confidentiality and use of such information; and
(iv) the Company understands and confirms that the Investor will be relying on the acknowledgements set forth in clauses (i) through
(iii) above if the Investor effects any transactions in the securities of the Company.
(Signature page immediately follows)
IN WITNESS WHEREOF, the
parties have caused this Equity Purchase Agreement to be duly executed by their respective authorized representatives as of the
Execution Date.
“COMPANY”
Well Power, Inc.,
a Nevada corporation
By: /s/ Dan Patience
Name: Dan Patience
Title: President |
“INVESTOR”
Premier Venture Partners, LLC,
a California limited liability company
By:
Name:
Title: |
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS
AGREEMENT (the " Agreement "), dated as of July 30, 2014 (the " Execution Date "), is entered into by and between
Well Power, Inc., a Nevada corporation with its principal executive office at Katy Freeway, Suite # 910, Houston, TX 77079 (the
" Company "), and Premier Venture Partners, LLC, a California limited liability company (the " Investor "),
with its principal executive officers at 4221 Wilshire Blvd., Suite 355, Los Angeles, CA 90010.
RECITALS
A.
Pursuant to the Equity Purchase Agreement entered into by and between the Company and the
Investor of this even date (the "Equity Purchase Agreement"), the Company has agreed to issue and sell to the Investor
an indeterminate number of shares of the Company's common stock, par value $0.001 per share (the "Common Stock"), up
to an aggregate purchase price of Ten Million Dollars ($10,000,000);
B.
As an inducement to the Investors to execute and deliver the Equity Purchase 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 "1933 Act"), and applicable state securities laws, with
respect to the shares of Common Stock issuable pursuant to the Equity Purchase Agreement.
C.
NOW THEREFORE, in consideration of the foregoing promises and the mutual covenants contained
hereinafter and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company
and the Investor hereby agree as follows:
SECTION 1
DEFINITIONS
1.1
As used in this Agreement, the following terms shall have the following meanings:
"Execution Date" shall have the meaning
set forth in the preambles.
"Investor" shall have the meaning
set forth in the preambles.
"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.
"Potential Material Event" means
any of the following: (i) the possession by the Company of material information not ripe for disclosure in the Registration Statement,
which shall be evidenced by determinations in good faith by the Board of Directors of the Company that disclosure of such information
in the Registration Statement would be detrimental to the business and affairs of the Company, or (ii) any material engagement
or activity by the Company which would, in the good faith determination of the Board of Directors of the Company, be adversely
affected by disclosure in the Registration Statement at such time, which determination shall be accompanied by a good faith determination
by the Board of Directors of the Company that the Registration Statement would be materially misleading absent the inclusion of
such information.
"Register," "Registered,"
and "Registration" refer to the Registration effected by preparing and filing one (1) or more Registration Statements
in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities
on a continuous 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").
"Registrable Securities" means (i)
the shares of Common Stock issued or issuable pursuant to the Equity Purchase Agreement except for the Additional Commitment Shares,
and (ii) any shares of capital stock issued or issuable with respect to such shares of Common Stock, if any, as a result of any
stock split, stock dividend, recapitalization, exchange or similar event or otherwise, which have not been (x) included in the
Registration Statement that has been declared effective by the SEC, or (y) sold under circumstances meeting all of the applicable
conditions of Rule 144 (or any similar provision then in force) under the 1933 Act.
"Registration Statement" means the
registration statement of the Company filed under the 1933 Act covering the Registrable Securities.
"Transaction Documents" shall mean
this Agreement and the Equity Purchase Agreement between the Company and the Investor as of the date hereof, and any other agreements
between the Company and the Investor executed in conjunction with this transaction
All capitalized terms used in this Agreement
and not otherwise defined herein shall have the same meaning ascribed to them as in the Equity Purchase Agreement.
SECTION 2
REGISTRATION
2.1
The Company shall use all commercially reasonable efforts to, within thirty (30) days of the
date of this Agreement, file with the SEC a Registration Statement or Registration Statements (as is necessary) on Form S-1 (or,
if such form is unavailable for such a registration, on such other form as is available for such registration), covering the resale
by the Investor of Registrable Securities in an amount not less than 20,000,000 shares of Common Stock (the "Registration
Amount"), 3,955,070 of which shares of Common Stock shall be registered as Initial Commitment Shares, and the balance of which
shares of Common Stock shall be registered as the Securities which Registration Statement(s) shall state that, in accordance with
Rule 416 promulgated under the 1933 Act, such Registration Statement also covers such indeterminate number of additional shares
of Common Stock as may become issuable upon stock splits, stock dividends or similar transactions. The Company may reduce the Registration
Amount to the extent that the SEC requires such amount of the Registration to be reduced as a condition of effectiveness, however
not to an amount that is less than 250% of the Initial Commitment Shares.
2.2
The Company shall use all commercially reasonable efforts to have the Registration Statement(s)
declared effective by the SEC.
2.3
The Company agrees not to include any other securities in the Registration Statement covering
the Registrable Securities without Investor's prior written consent which Investor may withhold in its sole discretion. Furthermore,
the Company agrees that it will not file any other Registration Statement for other securities, until thirty calendar days after
the Registration Statement for the Registrable Securities is declared effective by the SEC.
2.4
Notwithstanding the registration obligations set forth in this Section 2.1, if the staff of
the SEC (the "Staff ') or the SEC informs the Company that all of the unregistered Registrable Securities cannot, as a result
of the application of Rule 415, be registered for resale as a secondary offering on a single Registration Statement, the Company
agrees to promptly (i) inform Investor of such fact and use its commercially reasonable efforts to file amendments to the Registration
Statement as required by the SEC and/or (ii) withdraw the Registration Statement and file a new registration statement (the "New
Registration Statement"), in either case covering the maximum number of Registrable Securities permitted to be registered
by the SEC, on Form S-1 to register for resale the Registrable Securities as a secondary offering. If the Company amends the Registration
Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its
commercially reasonable efforts to file with the SEC, as promptly as allowed by the Staff or SEC, one or more registration statements
on Form S-1 to register for resale those Registrable Securities that were not registered for resale on the Registration Statement,
as amended, or the New Registration Statement (each, an "Additional Registration Statement"). Additionally, the Company
shall have the ability to file one or more New Registration Statements to cover the Registrable Securities once the Shares under
the initial Registration Statement referenced in Section 2.1 have been sold.
SECTION 3
RELATED OBLIGATIONS
At such time as the Company
is obligated to prepare and file the Registration Statement with the SEC pursuant to Section 2, the Company will affect the registration
of the Registrable Securities in accordance with the intended method of disposition thereof and, with respect thereto, the Company
shall have the following obligations:
3.1
The Company shall use all commercially reasonable efforts to cause such Registration Statement
relating to the Registrable Securities to become effective and shall keep such Registration Statement effective until the earlier
to occur of the date on which (A) the Investor shall have sold all the Registrable Securities actually issued or that the Company
has an obligation to issue under the Equity Purchase Agreement; or (B) the Investor has no right to acquire any additional shares
of Common Stock under the Equity Purchase Agreement (the "Registration Period"). The Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading. The Company shall use all commercially reasonable efforts to respond to
all SEC comments within ten (10) business days from receipt of such comments by the Company. The Company shall use all commercially
reasonable efforts to cause the Registration Statement relating to the Registrable Securities to become effective no later than
five (5) business days after notice from the SEC that the Registration Statement may be declared effective. The Investor agrees
to provide all information which is required by law to provide to the Company, including the intended method of disposition of
the Registrable Securities, and the Company's obligations set forth above shall be conditioned on the receipt of such information.
3.2
The Company shall prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to the 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 1933 Act, as may be necessary to keep such Registration
Statement effective during the Registration Period, and, during such period, comply with the provisions of the 1933 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 Investor
thereof as set forth in such Registration Statement. In the event the number of shares of Common Stock covered by the Registration
Statement filed pursuant to this Agreement is at any time insufficient to cover all of the Registrable Securities, the Company
shall amend such Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable),
or both, so as to cover all of the Registrable Securities, in each case, as soon as practicable, but in any event within thirty
(30) calendar days after the necessity therefor arises (based on the then Purchase Price of the Common Stock and other relevant
factors on which the Company reasonably elects to rely), assuming the Company has sufficient authorized shares at that time, and
if it does not, within thirty (30) calendar days after such shares are authorized. The Company shall use commercially reasonable
efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing
thereof.
3.3
The Company shall make available to the Investor whose Registrable Securities are included
in any Registration Statement and its legal counsel without charge (i) promptly after the same is prepared and filed with the SEC
at least one (1) copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules,
all documents incorporated therein by reference and all exhibits, the prospectus included in such Registration Statement (including
each preliminary prospectus) and, with regards to such Registration Statement(s), any correspondence by or on behalf of the Company
to the SEC or the staff of the SEC and any correspondence from the SEC or the staff of the SEC to the Company or its representatives;
(ii) upon the effectiveness of any Registration Statement, the Company shall make available copies of the prospectus, via EDGAR,
included in such Registration Statement and all amendments and supplements thereto; and (iii) such other documents, including copies
of any preliminary or final prospectus, as the Investor may reasonably request from time to time to facilitate the disposition
of the Registrable Securities.
3.4
The Company shall use commercially reasonable efforts to (i) register and qualify the Registrable
Securities covered by the Registration Statement under such other securities or "blue sky" laws of such states 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 (A) qualify to do business in any jurisdiction where it would not otherwise be required
to qualify but for this Section 3.4, or (B) subject itself to general taxation in any such jurisdiction. The Company shall promptly
notify the Investor who holds Registrable Securities 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 threatening of any proceeding
for such purpose.
3.5
As promptly as practicable after becoming aware of such event and as permitted by laws, the
Company shall notify Investor in writing of the happening of any event as a result of which the prospectus included in the 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
("Registration Default") and use all diligent efforts to promptly prepare a supplement or amendment to such Registration
Statement and take any other necessary steps to cure the Registration Default (which, if such Registration Statement is on Form
S-3, may consist of a document to be filed by the Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934
Act (as defined below) and to be incorporated by reference in the prospectus) to correct such untrue statement or omission, and
make available copies of such supplement or amendment to the Investor. The Company shall also promptly notify the Investor (i)
when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when the Registration Statement
or any post-effective amendment has become effective (the Company will prepare notification of such effectiveness which shall be
delivered to the Investor on the same day of such effectiveness and by overnight mail), additionally, the Company will promptly
provide to the Investor, a copy of the effectiveness order prepared by the SEC once it is received by the Company; (ii) of any
request by the SEC for amendments or supplements to the Registration Statement or related prospectus or related information, (iii)
of the Company's reasonable determination that a post-effective amendment to the Registration Statement would be appropriate, (iv)
in the event the Registration Statement is no longer effective, or (v) if the Registration Statement is stale as a result of the
Company's failure to timely file its financials or otherwise
3.6
The Company shall use all commercially reasonable efforts to prevent the issuance of any stop
order or other suspension of effectiveness of the Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction 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 holding Registrable Securities being sold of
the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding
concerning the effectiveness of the registration statement.
3.7
The Company shall permit the Investor and one (1) legal counsel, designated by the Investor,
to review and comment upon the Registration Statement and all amendments and supplements thereto at least one (1) calendar day
prior to their filing with the SEC. However, any postponement of a filing of a Registration Statement or any postponement of a
request for acceleration or any postponement of the effective date or effectiveness of a Registration Statement by written request
of the Investor (collectively, the "Investor's Delay") shall not act to trigger any penalty of any kind, or any cash
amount due or any in-kind amount due the Investor from the Company under any and all agreements of any nature or kind between the
Company and the Investor. The event(s) of an Investor's Delay shall act to suspend all obligations of any kind or nature of the
Company under any and all agreements of any nature or kind between the Company and the Investor.
3.8
At the request of the Investor, the Company's counsel shall furnish to the Investor an opinion
letter confirming the effectiveness of the registration statement. Such opinion letter shall be issued as of the date of the effectiveness
of the registration statement and be in a form reasonably acceptable to the Investor.
3.9
The Company shall hold in confidence and not make any disclosure of information concerning
the Investor 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 covering such information.
3.10
The Company shall use all commercially reasonable efforts to maintain designation and quotation
of all the Registrable Securities covered by any Registration Statement on the Principal Market. If, despite the Company's commercially
reasonable efforts, the Company is unsuccessful in satisfying the preceding sentence, it shall use commercially reasonable efforts
to cause all the Registrable Securities covered by any Registration Statement to be listed on each other national securities exchange
and automated quotation system, if any, 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 system. The Company
shall pay all fees and expenses in connection with satisfying its obligation under this Section 3.10.
3.11
The Company shall cooperate with the Investor to facilitate electronic delivery of the Registrable
Securities or if requested by the Investor, the preparation of certificates to be offered pursuant to the 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 after any sales of such Registrable Securities by the Investor, such certificates not bearing any restrictive legend).
3.12
The Company shall provide a transfer agent for all the Registrable Securities not later than
the effective date of the first Registration Statement filed pursuant hereto.
3.13
If requested by the Investor, the Company shall (i) as soon as reasonably practical incorporate
in a prospectus supplement or post-effective amendment such information as the Investor reasonably determines should be included
therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect
to the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement
or post-effective amendment as soon as reasonably possible after being notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested
by the Investor.
3.14
The Company shall use all commercially reasonable 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 facilitate the disposition of such Registrable Securities.
3.15
The Company shall otherwise use all commercially reasonable efforts to comply with all applicable
rules and regulations of the SEC in connection with any registration hereunder.
3.16
Within two (2) business day after the Registration Statement which includes Registrable Securities
is declared effective by the SEC, the Company shall 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.
3.17
The Company shall take all other reasonable actions necessary to expedite and facilitate disposition
by the Investor of Registrable Securities pursuant to the Registration Statement.
SECTION 4
OBLIGATIONS OF THE INVESTOR
4.1
At least five (5) calendar days prior to the first anticipated filing date of the Registration
Statement the Company shall notify the Investor in writing of the information the Company requires from the Investor for the Registration
Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement
with respect to the Registrable Securities and the Investor agrees to furnish to the Company that information regarding itself,
the Registrable Securities and the intended method of disposition of the Registrable Securities as shall reasonably be required
to effect the registration of such Registrable Securities and the Investor shall execute such documents in connection with such
registration as the Company may reasonably request. The Investor covenants and agrees that, in connection with any sale of Registrable
Securities by it pursuant to the Registration Statement, it shall comply with the "Plan of Distribution" section of the
then current prospectus relating to such Registration Statement.
4.2
The Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the
Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder,
unless the Investor has notified the Company in writing of an election to exclude all of the Investor's Registrable Securities
from such Registration Statement.
4.3
The Investor agrees that, upon receipt of written notice from the Company of the happening
of any event of the kind described in Section 3.6 or the first sentence of 3.5, 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 3.6 or the first sentence of 3.5.
SECTION 5
EXPENSES OF REGISTRATION
5.1
All legal expenses, other than underwriting discounts and commissions and other than as set
forth in the Equity Purchase Agreement, incurred in connection with registrations including comments, filings or qualifications
pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, and printing fees
shall be paid by the Company.
SECTION 6
INDEMNIFICATION
In the event any Registrable
Securities are included in the Registration Statement under this Agreement:
6.1
To the fullest extent permitted by law, the Company, under this Agreement, will, and hereby
does, indemnify, hold harmless and defend the Investor who holds Registrable Securities, the directors, officers, partners, employees,
counsel, agents, representatives of, and each Person, if any, who controls, any Investor within the meaning of the 1933 Act or
the Securities Exchange Act of 1934, as amended (the "1934 Act") (each, an "Indemnified Person"), against any
losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, 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 the 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 the Investor has requested in writing that the Company register or qualify the Shares ("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,
in light of the circumstances under which the statements therein were made, not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the 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 1933 Act, the 1934 Act, any other law, including, without limitation,
any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant
to the Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively, "Violations").
Subject to the restrictions set forth in Section 6.3 the Company shall reimburse the Investor and each such controlling person,
promptly as such expenses are incurred and are due and payable, for any reasonable legal fees 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 6.1: (i) shall not apply to a Claim arising out of or based upon a Violation
which is due to the inclusion in the Registration Statement of the information furnished to the Company by any Indemnified Person
expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement
thereto; (ii) shall not be available to the extent such Claim is based on (a) a failure of the Investor to deliver or to cause
to be delivered the prospectus made available by the Company or (b) the Indemnified Person's use of an incorrect prospectus despite
being promptly advised in advance by the Company in writing not to use such incorrect prospectus; (iii) any claims based on the
manner of sale of the Registrable Securities by the Investor or of the Investor's failure to register as a dealer under applicable
securities laws; (iv) any omission of the Investor to notify the Company of any material fact that should be stated in the Registration
Statement or prospectus relating to the Investor or the manner of sale; and (v) any 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
and shall survive the resale of the Registrable Securities by the Investor pursuant to the Registration Statement.
6.2
In connection with any Registration Statement in which Investor is participating, the Investor
agrees to severally and jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth
in Section 6.1, the Company, each of its directors, each of its officers who signs the Registration Statement, each Person, if
any, who controls the Company within the meaning of the 1933 Act or the 1934 Act and the Company's agents (collectively and together
with an Indemnified Person, an "Indemnified Party"), against any Claim or Indemnified Damages to which any of them may
become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent, that such Violation is due to the inclusion in the
Registration Statement of the written information furnished to the Company by the Investor expressly for use in connection with
such Registration Statement; and, subject to Section 6.3, 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 6.2 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 only
be liable under this Section 6.2 for that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such
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 and shall survive the resale
of the Registrable Securities by the Investor pursuant to the Registration Statement. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 6.2 with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the preliminary
prospectus were corrected on a timely basis in the prospectus, as then amended or supplemented. This indemnification provision
shall apply separately to each Investor and liability hereunder shall not be joint and several.
6.3
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 Indemnified Person or Indemnified
Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the Indemnified Person or Indemnified Party, the representation by 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 indemnifying
party shall pay for only one (1) separate legal counsel for the Indemnified Persons or the Indemnified Parties, as applicable,
and such counsel shall be selected by the Investor, if the Investor is entitled to indemnification hereunder, or the Company, if
the Company is entitled to indemnification hereunder, as applicable. 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 affected without its written consent, provided, however,
that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without
the 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. 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.
6.4
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.
SECTION 7
CONTRIBUTION
7.1
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 contribution shall be made under circumstances
where the maker would not have been liable for indemnification under the fault standards set forth in Section 6; (ii) no seller
of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section ll(f) of the 1933 Act) shall be
entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii)
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.
SECTION 8
REPORTS UNDER THE 1934 ACT
8.1
With a view to making available to the Investor the benefits of Rule 144 promulgated under
the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of
the Company to the public without registration ("Rule 144"), provided that the Investor holds any Registrable Securities
are eligible for resale under 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 1933 Act and the 1934 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 5(c) of the Equity Purchase 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, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 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.
SECTION 9
MISCELLANEOUS
9.1
Notices. Any notices or other communications required or permitted to be given under the terms
of this Agreement that must be in writing will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii)
upon receipt, when sent by electronic mail (provided a confirmation of transmission is mechanically or electronically generated
and kept on file by the sending party); or (iii) one (1) 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:
Well Power, Inc.
Attn: Dan M. Patience
11111 Katy Freeway, Suite # 910
Houston, TX 77079
If to the Investor:
Premier Venture Partners, LLC
4221 Wilshire Blvd., Suite 355
Los Angeles, CA 90010
Fax: (323) 315-2273
Each party shall provide five (5) days prior
written notice to the other party of any change in address or facsimile number.
9.2
No Waivers. 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.
9.3
No Assignments. The rights and obligations under this Agreement shall not be assignable.
9.4
Entire Agreement/Amendment. This Agreement and the Transaction Documents constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the Transaction Documents
supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.
The provisions of this Agreement may be amended only with the written consent of the Company and Investor.
9.5
Headings. The headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. Whenever required by the context of this Agreement, the singular shall include the
plural and masculine shall include the feminine.
This Agreement shall not be construed as if
it had been prepared by one of the parties, but rather as if all the parties had prepared the same.
9.6
Counterparts. This Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts
shall constitute but one and the same instrument. This Agreement may be executed by facsimile transmission, PDF, electronic signature
or other similar electronic means with the same force and effect as if such signature page were an original thereof.
9.7
Further assurances. 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.
9.8
Severability. In case any provision of this Agreement is held by a court of competent jurisdiction
to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this
Agreement will not in any way be affected or impaired thereby.
9.9
Law governing this agreement. This Agreement shall be governed by and construed in accordance
with the laws of the State of California without regard to principles of conflicts of laws. Any action brought by either party
against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of California
or in the federal courts located in Los Angeles County, California. The parties to this Agreement hereby irrevocably waive any
objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction
or venue or based upon forum non conveniens. The parties executing this Agreement and other agreements referred to herein or delivered
in connection herewith on behalf of the Company agree to submit to the in person am jurisdiction of such courts and hereby irrevocably
waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and
costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Documents by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
9.10
No third party beneficiaries. This Agreement is intended for the benefit of the parties hereto
and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except that the Company acknowledges
that the rights of the Investor may be enforced by its general partner.
(Signature page immediately follows)
IN WITNESS WHEREOF, the
parties have caused this Registration Rights Agreement to be duly executed by their respective authorized representatives as of
the Execution Date.
“COMPANY”
Well Power, Inc.,
a Nevada corporation
By: /s/ Dan Patience
Name: Dan Patience
Title: President |
“INVESTOR”
Premier Venture Partners, LLC,
a California limited liability company
By:
Name:
Title: |
WELL POWER, INC
CONVERTIBLE DEBENTURE
$133,000.00 |
August 21, 2014 |
THIS DEBENTURE HAS NOT BEEN REGISTERED PURSUANT
TO THE SECURITIES ACT OF 1933 (THE "ACT"} OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AS TO TIDS DEBENTURE OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
THE PRINCIPAL SUM DUE TO LENDER SHALL BE PRORATED
BASED ON THE CONSIDERATION ACTUALLY PAID BY LENDER. THE ORIGINAL ISSUE DISCOUNT IS PRORATED BASED ON THE CONSIDERATION ACTUALLY
PAID BY THE LENDER AS WELL AS ANY OTHER INTEREST OR FEES. THE BORROWER IS ONLY REQUIRED TO REPAY THE AMOUNT FUNDED AND IS NOT REQUIRED
TO REPAY ANY UNFUNDED PORTION OF THIS NOTE.
FOR VALUE RECEIVED , the
undersigned , Well Power, Inc, a Nevada corporation (the "Company"), hereby promises to pay to Macallan Partners, LLC
(the "Lender"), or its registered assigns, the principal sum of ONE HUNDRED TIDRTY THREE THOUSAND DOLLARS ($133,000.00)
(or so much thereof as shall have been advanced by the Lender to the Company hereunder subject to an approximate Original Issue
Discount of 9.77%, together with interest (computed on the basis of a three hundred sixty (360) day year of twelve (12) thirty
(30) day months) on the unpaid principal balance of this Debenture from the date of this Debenture until paid, at the rate of Five
percent (5%) per annum.
(a)
Payments of the principal of and interest on this Debenture shall be made in lawful money
of the United States of America at the current address of the registered holder of this Debenture as recorded in the Company's
books.
(b)
Interest accruing on the outstanding principal balance of this Debenture during the term of
this Debenture shall be paid at the Maturity Date, which shall be February 27, 2015. Upon the occurrence of any Event of Default
(as such term is defined hereinafter) and acceleration of the indebtedness hereunder, or after the Maturity Date (including without
limitation any time from and after the entry of a judgment for sums due), any unpaid principal of this Indenture shall bear interest
at the rate of eighteen percent (18%) per annum until paid. There shall be a 10 day grace period for payments to be made hereunder
(but interest shall be computed to the actual date of payment).
(c)
The outstanding principal balance of this Debenture, together with all accrued but unpaid
interest thereon, may be prepaid, at the Company's option at any time prior to the Maturity Date, provided that the Company shall
give written notice of any such prepayment to the registered holder of this Debenture no later than ten (10) days prior to the
date filed for prepayment (the "Prepayment Date"). Upon the Prepayment Date the Company shall pay a prepayment penalty
on the outstanding principal balance plus all accrued and unpaid interest thereon and any applicable fees and expenses. (the "Prepayment
Penalty"). Upon the Prepayment Date the Company shall pay a prepayment penalty based upon the following schedule: Ifprepayment
is made within 60 days from the date of this debenture then 125% of the outstanding principal balance plus all accrued and unpaid
interest thereon, if prepayment is made between 61-120 days from the date of this debenture then 135% of the outstanding principal
balance plus all accrued and unpaid interest thereon, if prepayment is made between 121-180 days from the date of this debenture
then 150% of the outstanding principal balance plus all accrued and unpaid interest thereon, (the "Prepayment"). No prepayment
shall be permitted after 180 days from the date of this debenture.
| 2. | REGISTRATION AND TRANSFER. |
(a)
The Company shall maintain at its principal executive offices a register for this Debenture,
in which the Company shall record the name and address of the person in whose name this Debenture has been issued and the name
and address of each transferee and prior owner thereof. The Company may deem and treat the person in whose name this Debenture
is so registered as the holder and owner thereof for all purposes and all notices hereunder to the registered holder may be to
the address indicated on such register.
(b)
This Debenture may be transferred only by the surrendering thereof for registration of transfer
duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder. The Company may condition
its registration of such transfer upon (a) the opinion of counsel reasonably acceptable to the Company that the transfer of this
Debenture does not violate the Act or any state securities or blue sky laws, and (b) the payment to it of a sum sufficient to cover
any stamp tax or other governmental charge imposed in respect of such transfer.
| 3. | COMMON STOCK CONVERSION RIGHTS AND SHARE RESERVATION RIGHTS. |
1.
The Lender has the right, at any time after the Effective Date, at its election, to convert
all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) under any convertible balance
due by the Company, into fully paid and non-assessable shares of common stock of the Company as per this conversion formula: Number
of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion price
is equal to 55% of the lowest traded price during the 15 trading days prior to the election to convert. If conversion shares are
not deliverable by DWAC then an additional 5% discount will apply to the conversion price. If the shares are ineligible for deposit
into the DTC system for any reason and only eligible for "X clearing" then an additional 10% discount will apply to the
conversion price. Notice of Lender's conversion may be delivered to Borrower by method of Lender's choice (including but not limited
to email, facsimile, mail, overnight courier, or personal delivery), and all conversions shall be cashless and not require further
payment from the Lender. If no objection is delivered from Borrower to Lender regarding calculations in the conversion notice within
24 hours of delivery of the conversion notice, the Company shall have been thereafter deemed to have irrevocably confirmed and
irrevocably ratified such conversion notice and waived any objection thereto. The Company shall deliver the shares from any conversion
to Lender (in any name directed by Lender) within 2 (two) business days of conversion notice delivery. At no time will the lender
convert any amount of the debenture into common stock that would result in the lender owning more than 4.99% of the company's common
stock outstanding.
2.
The Borrower shall irrevocably place 20,000,000 shares of the Company's common stock on reserve
with the Company's Transfer Agent to ensure that there are sufficient shares available for the conversion of this Debenture. So
long as any of the Notes are outstanding, the Company shall take all action necessary to reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of effecting the conversion of the Notes, a number of shares of Common
Stock equal to, at minimum, 4 times (4x) the value of the outstanding principal and interest of the note as shall from time to
time be necessary to effect the conversion of all of the Notes then outstanding (without regard to any limitations on conversions)
(the "Required Reserve Amount' ).
3.
Insufficient Authorized Shares. If, not withstanding Section 3(b), and not in limitation thereof,
at any time while any of the Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of the Notes at least a number of shares
of Common Stock equal to the Required Reserve Amount (an "Authorized Share Failure"), then the Company shall immediately
take all action necessary to increase the Company's authorized shares of Common Stock to an amount sufficient to allow the Company
to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the foregoing sentence,
as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than twenty (20)
days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval
of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each
stockholder with a proxy statement and shall use its reasonable best efforts to solicit its stockholders' approval of such increase
in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such
proposal.
4.
In the event that the outstanding shares of the common stock subject to the conversion are
changed into or exchanged for a different number or kind of shares of the Company or other securities of the Company by reason
of merger, consolidation, re capitalization, re-classification, stock split, stock dividend or combination of shares, the Company
shall make an appropriate and equitable adjustment in the number and kind of shares as to which the conversion shall be applicable,
to the end that after such event the Lender's proportionate interest is preserved after the occurrence of such event.
5.
If Borrower fails to deliver shares in accordance with the timeframe stated this Section;
the Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part, of that particular
conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded
conversion shares returned to the Company (under Lender's and Borrower's expectations that any returned conversion amounts will
tack back to the original date of this Debenture). In addition, for each conversion, in the event that shares are not delivered
by the fourth business day (inclusive of the day of conversion), a penalty of $2,000 per day will be assessed for each day after
the third business day (inclusive of the day of the conversion) until share delivery is made; and such penalty will be added to
the Principal Sum of this Debenture (under Lender's and Borrower's expectations that any penalty amounts will tack back to the
original date of this Debenture).
4.
ADJUSTMENT FOR CAPITAL CHANGES; MERGER OR CONSOLIDATION; NON-DILUTION PROVISIONS.
(a)
In the event of a stock dividend, stock split, recapitalization, combination, subdivision
or other similar corporate change with respect to the capital stock of the Company, the Board of Directors of the Company shall
make an appropriate and proportional adjustment in the aggregate number of shares of Common Stock into which this Debenture is
convertible and/or the Conversion Price per share of Common Stock.
(b)
If any merger or consolidation of the Company or the sale of all or substantially all of its
assets shall occur, then, as a condition to such merger, consolidation or sale, lawful and adequate provision shall be made whereby
the registered holder of this Debenture shall thereafter have the right to receive upon the basis and upon the terms and conditions
specified herein (including without limitation payment of the applicable Conversion Price) and in lieu of the shares of Common
Stock of the Company immediately theretofore receivable upon conversion of this Debenture, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for such shares of Common Stock immediately theretofore receivable
by such holder had such merger or consolidation not taken place. The Company shall not effect any such consolidation or merger,
unless prior to or simultaneously with the consummation thereof, the successor (if other than the Company) resulting from such
consolidation or merger shall assume, by written instrument executed and delivered to the holder, the obligation to deliver to
the holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the holder may be entitled
to receive.
(c)
The Conversion Price shall be subject to automatic adjustment from time to time as follows:
1)
If the Company shall at any time or from time to time hereafter issue (an "Issuance")
any Common Stock, options or other securities of the Company convertible into or exchangeable for Common Stock without consideration
or for a consideration per share less than the Conversion Price then in effect for this Debenture immediately prior to such issuance,
the Conversion Price shall forthwith be adjusted to a price equal to:
| (i) | an amount equal to the sum of: |
| A. | (i) The total number of shares of Common Stock outstanding immediately
prior to such Issuance, plus the maximum amount of all additional Common Stock issuable upon conversion of this Debenture, multiplied
by (ii) the Conversion Price in effect immediately prior to such Issuance, and |
| B. | the aggregate consideration received or receivable by the Company
on account of the Issuance, divided by |
| (ii) | the total number of shares of Common Stock outstanding immediately
after the Issuance (including for such purpose the maximum amount of additional Common Stock issuable upon conversion of this Debenture
plus the maximum amount of Common Stock issued or issuable pursuant to the Issuance). |
For purposes of the above
calculations, the number of shares of Common Stock outstanding immediately prior to the Issuance shall not include any additional
Common Stock issuable solely as a result of the adjustment of the Conversion Price resulting from the application of the foregoing
provisions.
2)
For the purposes of any adjustment of the Conversion Price as set forth above:
| (i) | In the case of the issuance of Common Stock for cash, the consideration
shall be deemed to be the amount of cash paid therefor. |
| (ii) | In the case of the issuance of Common Stock for a consideration in
whole or in part other than cash, the consideration other than cash shall be deemed to be the fair market value thereof, as determined
in good faith by the Board of Directors. |
(d)
In the event of the occurrence of any event or transaction not specifically provided for herein
that would equitably require an adjustment to the Conversion Price to remain consistent with the anti-dilution intent and purpose
of this Article, then the Board of Directors of the Company shall make such adjustment to the Conversion Price as they shall deem
reasonable and consistent with the intentions and purposes of this Article.
(e)
Upon any adjustment of the Conversion Price, the Company shall give written notice to the
registered holder of this Debenture, which notice shall state the Conversion Price resulting from such adjustment, setting forth
in reasonable detail the method of calculation and the facts upon which such calculation is based.
(f)
The Company will at all times reserve and keep available out of its authorized Common Stock,
for the purpose of issuance upon conversion of this Debenture as herein provided, the maximum number of shares of Common Stock
as shall then be issuable upon the exercise of the conversion privileges set forth herein. The Company covenants that all shares
which shall be so issuable shall, upon the conversion of this Debenture as herein provided, be duly and validly issued and fully
paid and nonassessable by the Company.
5.
EVENTS OF DEFAULT.
(a)
If one or more of the following events of default shall occur (an "Event of Default"):
i. the
Company shall fail to pay any principal under this Debenture when due and payable (or payable by conversion) thereunder; or
ii. the
Company shall fail to pay any interest or any other amount under this Debenture when due and payable (or payable by conversion)
thereunder; or
iii. a
receiver, trustee or other similar official shall be appointed over the Company or a material part of its assets and such appointment
shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; or
iv. the
Company shall become insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any; or
v. the
Company shall make a general assignment for the benefit of creditors; or
vi. the
Company shall file a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); or
vii. an
involuntary insolvency proceeding shall be commenced or filed against the Company; or
viii. the
Company shall lose its status as "DTC Eligible" or the Company's shareholders shall lose the ability to deposit (either
electronically or by physical certificates, or otherwise) shares into the DTC System; or the shares of the Company no longer allow
for DWAC transfer for the shares; or
ix. the
Company shall become delinquent in its filing requirements as a fully-reporting issuer registered with the SEC,
x. the
company shall fail to maintain sufficient common shares authorized and available to satisfy the lender's conversions for as long
as this debenture remains unpaid in whole or in part.
then during the continuance of any such Event
of Default, the registered holder of this Debenture may declare by written notice all the then unpaid principal amount of this
Debenture to be due and payable as if a Prepayment Penalty was to be enforced, upon which the same shall forthwith become due and
payable, together with the interest accrued thereon, without presentation, demand, protest or notice of dishonor, all of which
the Company hereby waives. In the event of any default, the outstanding principal amount of this Debenture, plus accrued but unpaid
interest, liquidated damages, fees and other amounts owing in respect thereof shall be accelerated and shall become, at the Lender's
election, immediately due and payable in cash at the Mandatory Default Amount. The Mandatory Default Amount means the greater of
(i) the outstanding principal amount of this Debenture, plus all accrued and unpaid interest, liquidated damages, fees and other
amounts hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either demanded or paid in full, whichever
has a lower Conversion Price, multiplied by the VWAP (volume weighted average price) on the date the Mandatory Default Amount is
either demanded or paid in full, whichever has a higher VWAP, or (ii) 150% of the outstanding principal amount of this Debenture,
plus 100% of the accrued and unpaid interest, liquidated damages, fees and other amounts hereon. Commencing five (5) days after
the occurrence of any event of default that results in the acceleration of this Debenture, a default interest rate shall be applicable
to all borrowings. The default interest rate shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum
rate permitted under applicable law. In connection with such acceleration described herein, the Lender need not provide, and the
Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Lender may immediately and without
expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it
under applicable law. Such acceleration may be rescinded and annulled by Lender at any time prior to payment hereunder and the
Lender shall have all rights as a holder of the note until such time, if any, as the Lender receives full payment pursuant to this
Section 10. No such rescission or annulment shall affect any subsequent event of default or impair any right consequent thereon.
Nothing herein shall limit Lender's right to pursue any other remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates
representing shares of Common Stock upon conversion of this Debenture as required pursuant to the terms hereof.
(b)
Should the indebtedness represented by this Debenture or any part thereof be collected in
any proceeding or placed in the hands of attorneys for collection, the Company agrees to pay, in addition to the principal and
interest due and payable hereon, all costs of collecting this Debenture, including reasonable attorneys' fees and expenses.
6.
MISCELLANEOUS.
(a)
If the date of any payment required by this Debenture be Saturday, Sunday or a bank holiday,
such payment shall be payable on the first business day following such date.
(b)
The Company hereby expressly waives presentment, demand, protest or any other notice whatsoever.
(c)
Borrower shall have the right to enter into secured or unsecured borrowings from commercial
banks and comparable commercial credit institutions for the purpose of financing inventory and fixed assets, upon approval of the
Board of Directors of the Company ("Permitted Borrowings"). Permitted Borrowings shall not require the prior approval
of the Lender. All other borrowings by the Company shall be subject to the prior written approval of the Lender.
(d)
This Debenture shall be binding upon and shall inure to the benefit of the parties hereto,
their successors, heirs and assigns.
(e)
The invalidity or partial invalidity of any provision of this Debenture shall affect only
such provision or part thereof and the balance of this Debenture shall remain in effect.
(f)
It is understood and agreed that no failure or delay in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any right, power or privilege hereunder.
7.
CHOICE OF LAW & VENUE
(a)
All questions concerning the construction, validity, enforcement and interpretation of this
Debenture shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without
regard to the principles of conflicts of law thereof. Any claim or controversy arising out of or relating to the interpretation,
application or enforcement of any provision of this Agreement, shall be submitted for resolution to a court of competent jurisdiction
in New York. The parties hereby consent to personal jurisdiction and venue in New York.
IN WITNESS WHEREOF, the
Company has caused this Debenture to be executed, sealed and delivered on the date first above written.
Well Power, Inc
By: /s/ Dan Patience
Name: Dan Patience
Title: President
Macallan Partners LLC.
By: /s/ Adam Didia
Name: Adam Didia
Title: Member
FINANCING AGREEMENT
FOR VALUE RECEIVED, Well Power, Inc, ("WPWR"),
a Nevada corporation (the "Borrower") with at least 107,000,000 common shares issued and outstanding, promises to pay
to Macallan Partners, LLC or its Assignees (the "Lender") the Principal Sum along with the Interest and any other fees
according to the terms herein . This Agreement will become effective only upon execution by both parties and delivery of the first
payment of consideration by the Lender (the "Effective Date").
The Principal Sum is $133,000 plus accrued
and unpaid interest and any other fees. The loan amount will be evidenced by a Convertible Debenture issued by the Borrower to
the Lender, including all material terms of this Agreement. The Convertible Debenture shall be issued at an approximate 9.77% Original
Issue Discount, such that the total amount that the Lender shall provide to the Borrower under this Agreement shall be $120,000
(the "Discounted Amount"). The Discounted Amount shall be paid by Lender, as follows: (i) $120,000 in cash initially,
after the lender has received proof from the borrower and its transfer agent of common shares being irrevocably placed in a reserve
account for benefit of the lender (ii) such further amounts as shall be agreed by the Lender and the Borrower, up to the Discounted
Amount. All installments shall be payable under a full recourse Convertible Debenture(s) for $133,000 (the "Investor Note"),
subject to certain prepayment requirements, set forth below.
The prepayment of any amount of the Principal
Sum shall be subject to a prepayment penalty. Upon prepayment, the Company shall be required to pay the principal amount outstanding,
plus all accrued and unpaid interest plus all expenses and fees plus a prepayment penalty as further outlined herein.
The Maturity Date is February 27, 2015 unless
earlier converted pursuant to the Conversion section below.
At no time will the Lender convert any amount
of the Debenture into common stock that would result in the Lender owning more than 4.99% of the common stock outstanding.
Furthermore:
1.
Prepayment Penalty. Prepayment of any amount of the Principal Sum shall be subject to a prepayment
premium. Upon prepayment, the Borrower shall be required to pay the principal amount outstanding, plus all accrued and unpaid interest
plus all expenses and fees plus a prepayment penalty premium. Upon the Prepayment Date the Company shall pay a prepayment penalty
based upon the following schedule: If prepayment is made within 60 days from the date of this debenture then 125% of the outstanding
principal balance plus all accrued and unpaid interest thereon, if prepayment is made between 61-120 days from the date of this
debenture then 135% of the outstanding principal balance plus all accrued and unpaid interest thereon, if prepayment is made between
121-180 days from the date of this debenture then 150% of the outstanding principal balance plus all accrued and unpaid interest
thereon, (the "Prepayment"). No prepayment shall be permitted after 180 days from the date of this debenture.
2.
Conversion(s). The Lender has the right, at any time after the Effective Date, at its election,
to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) under any convertible
balance due by the Borrower, into fully paid and nonassessable shares of common stock of the Borrower as per this conversion formula:
Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion
price is equal to 55% of the lowest traded price during the 15 trading days prior to the election to convert. Notice of Lender's
conversion may be delivered to Borrower by method of Lender's choice (including but not limited to email, facsimile, mail, overnight
courier, or personal delivery), and all conversions shall be cashless and not require further payment from the Lender. If no objection
is delivered from Borrower to Lender regarding calculations in the conversion notice within 24 hours of delivery of the conversion
notice, the Borrower shall have been thereafter deemed to have irrevocably confirmed and irrevocably ratified such conversion notice
and waived any objection thereto. The Borrower shall deliver the shares from any conversion to Lender (in any name directed by
Lender) within two (2) business days of conversion notice delivery.
In the event that the outstanding shares of
the common stock subject to the conversion are changed into or exchanged for a different number or kind of shares of the Borrower
or other securities of the Borrower by reason of merger, consolidation, re-capitalization , re-classification, stock split, stock
dividend or combination of shares, the Borrower shall make an appropriate and equitable adjustment in the number and kind of shares
as to which the conversion shall be applicable, to the end that after such event the Lender's proportionate interest is preserved
after the occurrence of such event.
3.
Convertible Debenture. The borrowings under this Agreement shall be evidenced by a Convertible
Debenture, in the form attached as Exhibit A, hereto.
4.
Conversion Delays. If Borrower fails to deliver shares in accordance with the timeframe stated
in Section 2; the Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part, of that
particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum
with the rescinded conversion shares returned to the Borrower (under Lender's and Borrower's expectations that any returned conversion
amounts will tack back to the original date of the Debenture). In addition, for each conversion, i n the event that shares are
not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $2,000 per day will be assessed for
each day after the third business day (inclusive of the day of the conversion) until share delivery is made; and such penalty will
be added to the Principal Sum of the Debenture (under Lender's and Borrower' s expectations that any penalty amounts will tack
back to the original date of the Debenture).
5.
Notification about balance of Authorized Shares. During the course of this Agreement, the
Borrower will notify the Lender if the balance of the unissued authorized shares falls below 15% of the authorized shares limit
and if so, the Lender has the right to suspend its impending installments until more shares are authorized to accommodate further
conversions.
6.
Terms of Future Financings. So long as the Debenture is outstanding, upon any issuance by
the Borrower or any of its subsidiaries of any security with any term more favorable to the holder of such security or with a term
in favor of the holder of such security that was not similarly provided to the Lender in the Debenture, then the Borrower shall
notify the Lender of such additional or more favorable term and such term, at Lender's option, shall become a part of the transaction
documents with the Lender. The types of terms contained in another security that may be more favorable to the holder of such security
include, but are not limited to, terms addressing conversion discounts.
During the course of this agreement, the Borrower
must notify the lender if any of these conditions occur:
I.
If conversion shares are not deliverable by DWAC.
II.
If the shares are ineligible for deposit into the DTC system and only eligible for Xclearing
deposit.
7.
Default. The following are events of default under the Debenture and this Agreement: (i) the
Borrower shall fail to pay any principal under the Debenture when due and payable (or payable by conversion) thereunder; or (ii)
the Borrower shall fail to pay any interest or any other amount under the Debenture when due and payable (or payable by conversion)
thereunder; or (iii) a receiver, trustee or other similar official shall be appointed over the Borrower or a material part of its
assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty
(60) days; or (iv) the Borrower shall become insolvent or generally fails to pay, or admits in writing its inability to pay, its
debts as they become due, subject to applicable grace periods, if any; or (v) the Borrower shall make a general assignment for
the benefit of creditors; or (vi) the Borrower shall file a petition for relief under any bankruptcy , insolvency or similar law
(domestic or foreign); or (vii) an involuntary insolvency proceeding shall be commenced or filed against the Borrower; or (viii)
the Borrower shall lose its status as "OTC Eligible" or the borrower's shareholders shall lose the ability to deposit
(either electronically or by physical certificates, or otherwise) shares into the DTC System; or the shares of the Borrower no
longer allow for OWAC transfer for the shares; or (ix) the Borrower shall become delinquent in its filing requirements as a fully-reporting
issuer registered with the SEC; or (x) the borrower shall fail to maintain sufficient common shares authorized and available to
satisfy the lender's conversions for as long as this debenture remains unpaid in whole or in part.
8.
Remedies. In the event of any default, the outstanding principal amount of the Debenture,
plus accrued but unpaid interest, liquidated damages, fees and other amounts owing in respect thereof shall be accelerated and
shall become, at the Lender's election, immediately due and payable in cash at the Mandatory Default Amount. The Mandatory Default
Amount means the greater of (i) the outstanding principal amount of the Debenture, plus all accrued and unpaid interest, liquidated
damages, fees and other amounts hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either demanded
or paid in full, whichever has a lower Conversion Price, multiplied by the VWAP (volume weighted average price) on the date the
Mandatory Default Amount is either demanded or paid in full, whichever has a higher VWAP, or (ii) 150% of the outstanding principal
amount of the Debenture, plus 100% of the accrued and unpaid interest, liquidated damages, fees and other amounts hereon. Commencing
five (5) days after the occurrence of any event of default that results in the acceleration of the Debenture, a default interest
rate shall be applicable to all borrowings. The default interest rate shall accrue at an interest rate equal to the lesser of 18%
per annum or the maximum rate permitted under applicable law. In connection with such acceleration described herein, the Lender
need not provide, and the Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and the Lender
may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other
remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Lender at any time prior to payment
hereunder and the Lender shall have all rights as a holder of the note until such time, if any, as the Lender receives full payment
pursuant to this Section 10. No such rescission or annulment shall affect any subsequent event of default or impair any right consequent
thereon. Nothing herein shall limit Lender's right to pursue any other remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Borrower's failure to timely
deliver certificates representing shares of Common Stock upon conversion of the Debenture as required pursuant to the terms hereof.
9.
No Short Selling. Lender must agree that as long as the Debenture from Borrower to Lender
remains outstanding, Lender will not short sell the Common Stock or hedge the transaction which establishes a net short position
with respect to the Common Stock of Borrower. Borrower agrees that upon delivery of a conversion notice by Lender, Lender will
own the shares of Common Stock described in the conversion notice and any sale of those shares issuable under such conversion notice
would not be considered a short sale.
10.
Assignability. The Borrower may not assign the Debenture. The Debenture is binding upon the
Borrower and its successors and will inure to the benefit of the Lender and its successors and assigns and may be assigned by the
Lender to anyone of its choosing without Borrower's approval.
11.
Governing Law. This Agreement will be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware, without regard to the conflict of laws principles thereof. Any action brought by either
party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of
New York or in the federal courts for located in New York. Both parties and the individuals signing this Agreement agree to submit
to the jurisdiction of such courts.
12.
Delivery of Process by Lender to Borrower. In the event of any action or proceeding by Lender
against Borrower, and only by Lender against Borrower, service of copies of summons and/or complaint and/or any other process which
may be served in any such action or proceeding may be made by Lender via U.S. Mail, overnight delivery service such as FedEx or
UPS, email, fax, or process server, or by mailing or otherwise delivering a copy of such process to the Borrower at its last known
attorney as set forth in its most recent SEC filing.
13.
Attorney Fees. In the event any attorney is employed by either party to the Debenture with
regard to any legal or equitable action, arbitration or other proceeding brought by such party for the enforcement of the Debenture
or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of the Debenture,
the prevailing party in such proceeding will be entitled to recover from the other party reasonable attorneys' fees and other costs
and expenses incurred, in addition to any other relief to which the prevailing party may be entitled. In connection with the issuance
of the Convertible Debenture, the Borrower shall pay attorney fees incurred by the Lender of $5,000. Borrower shall also be responsible
for payment of banking fees as agreed with the investment banker.
14.
Permitted Borrowings. Borrower shall have the right to enter into secured or unsecured borrowings
from commercial banks and comparable commercial credit institutions for the purpose of financing inventory and fixed assets, upon
approval of the Board of Directors of the Borrower ("Permitted Borrowings"). Permitted Borrowings shall not require the
prior approval of the Lender. All other borrowings by the Borrower shall be subject to the prior written approval of the Lender.
15.
Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related
to the Debenture, Lender has the right to have any such opinion provided by its counsel. Lender also has the right to have any
such opinion provided by Borrower's counsel.
16.
Notices. Any notice required or permitted hereunder (including Conversion Notices) must be
in writing and either personally served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be
deemed effectively delivered at the time of transmission if by facsimile or email, and if by overnight courier the business day
after such notice is deposited with the courier service for delivery.
The Borrower
/s/ Dan Patience
Well Power, Inc. |
The Lender |
NOTE PURCHASE AGREEMENT
This Note Purchase Agreement (the "Agreement")
is made as of August 6, 2014 by and between Well Power, Inc. a Nevada corporation with principal offices at 11111 Katy Freeway,
Suite 910, Houston, TX 77079 (the "Company") and Iconic Holdings, LLC, a Delaware LLC with principal offices at
7200 Wisconsin Ave, Suite 206, Bethesda, MD 20814 (the "Purchaser"). As used herein, the term "Parties"
shall be used to refer to the Company and Purchaser jointly.
WHEREAS:
| A. | The Parties jointly warrant and represent that they have a pre-existing
relationship prior to the date of this Agreement. |
| B. | Purchaser warrants and represents that it is sophisticated and experienced
in acquiring the debt instruments issued by small early-stage companies that have not achieve profitability, positive cash flow
or both. |
| C. | Purchaser warrants and represents that it is an "accredited
investor," as that term is defined in Rule 501 of the Securities Act of 1933, as amended (the "1933 Act"). |
| D. | Purchaser warrants and represents that prior to entering into this
Agreement that it has received and completed its review of the Company's corporate and financial statements as included in the
filings and disclosures as listed for the Company with the Securities and Exchange Commission which has allowed Purchaser to make
an informed investment decision with respect to purchase of that certain Convertible Promissory Note in the stated original principal
amount of $275,000 (the "Note") attached in Exhibit A and dated August 6, 2014. |
| E. | The Purchaser acknowledges and agrees that it is acquiring the Note
for investment purposes only and not with a view to a distribution. |
| F. | The Purchaser acknowledges and agrees that: (i) the Note is a "restricted
security," as that term is defined in the 1933 Act and (ii) no registration rights have been granted to Purchaser to register
the Note. |
NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:
Section 1. SALE AND ISSUANCE OF THE
NOTE. In consideration of the Company's receipt of the initial sum of $110,000 at Closing (as defined in Section 2.1), the
Company shall sell to the Purchaser, and the Purchaser shall purchase from the Company (the "Issuance") the Note upon
the terms set forth in this Agreement.
Section 2. THE CLOSING.
2.1. PLACE OF CLOSING AND
PROCEDURE AT CLOSING. The closing of the issuance of the Note to the Purchaser (the "Closing") shall take place
simultaneously with and upon the satisfaction of the following conditions:
(1)
the Company's execution and delivery to the Purchaser of the following: (a) an executed copy
of this Agreement; (b) an executed copy of the Note; (c) a signed copy of the Irrevocable Instructions to the Transfer Agent; and
(d) that certain Action of the Board of Directors, dated August 6, 2014 (the "Action of the Board of Directors"),
a copy of which is attached hereto as Exhibit A, signed by the Directors of the Company.
(2)
the Purchaser's execution of a wire transfer to the Company no later than 2 business days
following the Closing as follows: the sum of $100,000 in cash shall be remitted and delivered to the Company and $10,000 shall
be retained by the Purchaser through an original issue discount for due diligence and legal bills related to this transaction .
(3)
the Purchaser reserves the right to pay additional consideration at any time and in any amount
it desires, at its sole discretion.
Section 3. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY.
The Company hereby represents and warrants
to the Purchaser as follows:
3.1.
ORGANIZATION. The Company is duly organized, validly existing and in good standing under the
laws of the State of Nevada and is qualified to conduct its business as a foreign corporation in each jurisdiction where the failure
to be so qualified would have a material adverse effect on the Company.
3.2.
AUTHORIZATION OF AGREEMENT, ETC. The execution, delivery and performance by the Company of
this Agreement , the Note, and each other document or instrument contemplated hereby or thereby (collectively , the "Financing
Documents") have been duly authorized by all requisite corporate action by the Company and delivered by the Company. Each
of the Financing Documents, when executed and delivered by the Company, constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization , fraudulent
conveyance, moratorium or other similar laws affecting creditors' rights and remedies generally, and subject as to enforceability
to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
Section 4. REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER.
The Purchaser hereby represents and warrants
to the Company as follows:
4.1. AUTHORIZATION OF
THE DOCUMENTS. Purchaser has all requisite power and authority (corporate or otherwise) to execute, deliver and perform the Financing
Documents to which it is a party and the transactions contemplated thereby, and the execution, delivery and performance by such
Purchaser of the Financing Documents to which it is a party have been duly authorized by all requisite action by such Purchaser
and each such Financing Document, when executed and delivered by the Purchaser, constitutes a valid and binding obligation of such
Purchaser, enforceable against such Purchaser in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
4.2. INVESTMENT REPRESENTATIONS.
The Purchaser warrants and represents that:
| (a) | the Purchaser is an accredited investor (as that term is defined
in Rule 50l(a)(l) of Regulation D of the 1933 Act; |
| (b) | the Purchaser is sophisticated and experienced in acquiring the securities
of small public companies; |
| (c) | the Purchaser has reviewed the Company's Annual and Quarterly Reports
together with the audited financial statements contained therein; |
| (d) | the Purchaser has had sufficient opportunity to review and evaluate
the risks and uncertainties associated with the purchase of the Company's securities; |
| (e) | the Purchaser is acquiring the Note from the Company for investment
purposes only and not with a view to a distribution. |
4.3
RESTRICTED SECURITY. Purchaser understands and acknowledges that the Note has not been, and
when issued will not be, registered with the Securities and Exchange Commission. Purchaser warrants and represents that it has
fully reviewed the restricted securities legend and the terms thereof with its financial, legal, investment, and business advisors
and that it has not relied upon the Company or any other person for any advice in connection with the purchase of the Note, this
Agreement, or both of them.
4.4
LEGAL COUNSEL. Purchaser has consulted with its own independent legal, tax, investment, and
other advisors of its own choosing prior to entering into this Agreement.
4.5
ABSENCE OF REGISTRATION RIGHTS. Purchaser understands and agrees that it is not acquiring
and has not been granted any registration rights with respect to the Note. The Note is a restricted security and the Purchaser
understands that there is no trading market for the Note and no such market will likely ever develop.
Section 5. BROKERS AND FINDERS.
The Company shall not be obligated, unless
previously detailed in Section 2.1(2), to pay any commission, brokerage fee or finder's fee based on any alleged agreement or understanding
between the Purchaser and a third person in respect of the transactions contemplated hereby. The Purchaser hereby agrees to indemnify
the Company against any claim by any third person for any commission, brokerage or finder's fee or other payment with respect to
this Agreement or the transactions contemplated hereby based on any alleged agreement or understanding between the Purchaser and
such third person, whether express or implied from the actions of the Purchaser.
Section 6. SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the
benefit of the Company, the Purchaser and their respective successors and assigns.
Section 7. ENTIRE AGREEMENT.
This Agreement and the other writings and agreements
referred to in this Agreement or delivered pursuant to this Agreement contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and understandings among the parties with respect thereto.
Section 8. NOTICES.
All notices, demands and requests of any kind
to be delivered to any party in connection with this Agreement shall be personally served, sent via facsimile or e-mail, or sent
in writing via an internationally recognized overnight courier or by registered or certified mail, return receipt requested and
postage prepaid to the address of each party listed on the first page of this Agreement or to such other address as the party to
whom notice is to be given may have furnished to the other parties to this Agreement in writing in accordance with the provisions
of this Section 8. Any such notice or communication shall be deemed to have been received (i) in the case of personal delivery,
on the date of such delivery, (ii) in the case of facsimile or e-mail, immediately (iii) in the case of an internationally-recognized
overnight courier, on the next business day after the date when sent and (iv) in the case of mailing, on the third business day
following that on which the piece of mail containing such communication is posted.
Section 9. AMENDMENTS.
This Agreement may not be modified or amended,
or any of the provisions of this Agreement waived, except by written agreement of the Company and the Purchaser.
Section 10. ATTORNEYS' FEES.
In the event of a dispute between the parties
concerning the enforcement or interpretation of this Agreement, the prevailing party in such dispute, whether by legal proceedings
or otherwise, shall be reimbursed immediately for the reasonably incurred attorneys' fees and other costs and expenses by the other
parties to the dispute.
Section 11. GOVERNING LAW AND ARBITRATION.
All questions concerning the construction,
interpretation and validity of this Agreement shall be governed by and construed and enforced in accordance with the domestic laws
of the State of California without giving effect to any choice or conflict of law provision or rule (whether in the State of California
or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California.
In furtherance of the foregoing, the internal law of the State of California will control the interpretation and construction of
this Agreement, even if under such jurisdiction's choice of law or conflict of law analysis, the substantive law of some other
jurisdiction would ordinarily or necessarily apply.
Section 12. CAPTIONS AND EXHIBIT A.
The captions by which the sections and subsections
of this Agreement are identified are for convenience only, and shall have no effect whatsoever upon its interpretation. Exhibit
A is attached hereto and each of the attachments listed in Exhibit A are each with Exhibit A incorporated by reference herein.
Section 13. SEVERANCE.
If any provision of this Agreement is held
to be illegal or invalid by a court of competent jurisdiction, such provision shall be deemed to be severed and deleted; and neither
such provision, nor its severance and deletion, shall affect the validity of the remaining provisions.
Section 14. COUNTERPARTS.
This Agreement may be executed in any number
of counterparts, and each such counterpart of this Agreement shall be deemed to be an original instrument, but all such counterparts
together shall constitute but one agreement. Facsimile counterpart signatures to this Agreement shall be acceptable and binding.
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blank.]
IN WITNESS WHEREOF,
each of the undersigned has duly executed this Note Purchase Agreement as of the date first written above.
FOR THE COMPANY:
Well Power, Inc.
By: /s/ Dan Patience
Name: Dan Patience
Its: President
FOR THE PURCHASER:
Iconic Holdings, LLC
By: /s/ Michael Sobeck
Name: Michael Sobeck
Its: Manager
[SIGNATURE PAGE TO NOTE PURCHASE AGREEMENT]
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blank.]
EXHIBIT A
(Copy of Convertible Promissory Note, Board
Resolution, and Irrevocable Instructions to Stock Transfer Agent, are each attached hereto.)
1.
Copy of Convertible Promissory Note
2.
Copy of the Board Resolution of the Borrower
3.
Copy of Irrevocable Instructions to Stock Transfer Agent
[The remainder of this page has been left intentionally
blank.]
NEITHER THESE SECURITIES NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS NOTE DOES NOT REQUIRE PHYSJCAL SURRENDER
OF THE NOTE IN THE EVENT OF A PARTIAL REDEMPTION OR CONVERSION. AS A RESULT, FOLLOWING ANY REDEMPTION OR CONVERSION OF ANY PORTION
OF THIS NOTE, THE OUTSTANDING PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE MAY BE LESS THAN THE PRINCIPAL AMOUNT AND ACCRUED INTEREST
SET FORTH BELOW.
10% CONVERTIBLE PROMISSORY NOTE
OF
WELL POWER, INC.
Issuance Date: August 6, 2014
Total Face Value of Note: $250,000
Original Issue Discount: $25,000
THIS NOTE is a duly authorized
Convertible Promissory Note of WELL POWER, INC. a corporation duly organized and existing under the laws of the State of Nevada
(the "Company"), designated as the Company's 10% Convertible Promissory Note due August 6, 2015 ("Maturity
Date") in the principal amount of $275,000 (the "Note").
FOR VALUE RECEIVED, the
Company hereby promises to pay to the order of Iconic Holdings, LLC or its registered assigns or successors-in-interest
("Holder") the principal sum of up to $275,000 and to pay "guaranteed" interest on the principal balance hereof
(which principal balance shall be increased by the Holder's payment of additional consideration as set forth herein and which increase
shall also include the prorated amount of the original issue discount in connection with Holders payment of additional consideration)
at the rate of 10%, all of which "guaranteed" interest shall be deemed earned as of the date of each such payment of
additional consideration by the Holder on the Maturity Date, to the extent such principal amount and "guaranteed" interest
have been repaid or converted into the Company's Common Stock, $0.001 par value per share (the "Common Stock"),
in accordance with the terms hereof.
The initial Purchase Price
will be $110,000 of consideration upon execution of the Note Purchase Agreement and all supporting documentation. The sum of $100,000
shall be remitted and delivered to the Company, and $10,000 shall be retained by the Purchaser through an original issue discount
for due diligence and legal bills related to this transaction. The Holder reserves the right to pay additional consideration at
any time and in any amount it desires, at its sole discretion. The principal sum (including the prorated amount of the original
issue discount) owed by the Company shall be prorated to the amount of consideration paid by the Holder and only the consideration
received by the Company, plus prorated "guaranteed" interest d other fees and prorated original issue discount, shall
be deemed owed by the Company. The original issue discount is set at 10% of any consideration paid. The Company is not responsible
to repay any unfunded portion of this Note.
In addition to the "guaranteed"
interest referenced above, and in the Event of Default pursuant to Section 2(e), additional interest will accrue from the date
of the Event of Default at the rate equal to the lower of 20% per annum or the highest rate permitted by law (the "Default
Rate").
This note may be prepaid
according to the following schedule: Within sixty (60) days of the date of execution, this note may be prepaid for one hundred
twenty five percent (125%) of face value plus accrued interest. Between sixty (60) and one hundred twenty (120) days from the date
of execution, this note may be prepaid for one hundred thirty percent (130%) of face value plus accrued interest. Between one hundred
twenty (120) and one hundred eighty (180) days from the date of execution, this note may be prepaid for one hundred thirty five
percent (135%) of face value. After one hundred eighty (180) days from the date of execution until the Due Date, this note may
not be prepaid without written consent from Tangiers. Whenever any amount expressed to be due by the terms of this Note is due
on any day which is not a Business Day (as defined below), the same shall instead be due on the next succeeding day which is a
Business Day.
For purposes hereof the
following terms shall have the meanings ascribed to them below:
"Business Day"
shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the City of New York are authorized or required
by law or executive order to remain closed.
"Conversion Price"
shall be equal to the lower of $.08 or 55% of the lowest trading price of the Company's common stock during the 15 consecutive
trading days prior to the date on which Holder elects to convert all or part of the Note. If the Company is placed on "chilled"
status with the Depository Trust Company ("DTC"), the discount shall be increased by 10% until such chill is remedied.
If the Company is not Deposits and Withdrawal at Custodian ("DWAC") eligible through their Transfer Agent and
the Depository Trust Company's ("DTC") Fast Automated Securities Transfer ("FAST") system, the
discount will be increased by 5%. In the case of both, the discount shall be a cumulative 15%.
"Principal Amount”
shall refer to the sum of (i) the original principal amount of this Note (including the prorated amount of the original issue discount),
(ii) all accrued but unpaid interest hereunder, and (iii) any default payments owing under the Note but not previously paid or
added to the Principal Amount.
"Trading
Day" shall mean a day on which there is trading on the Principal Market.
"Underlying Shares"
means the shares of common stock into which the Note is convertible (including interest or principal payments in common stock as
set forth herein) in accordance with the terms hereof.
The following terms and
conditions shall apply to this Note:
Section 1.00 Conversion.
(a)
Conversion Right. Subject to the terms hereof and restnct10ns and limitations contained herein,
the Holder shall have the right, at the Holder's option, at any time to convert the outstanding Principal Amount and interest under
this Note in whole or in part.
(b)
The date of any Conversion Notice hereunder and any Payment Date shall be referred to herein
as the "Conversion Date".
(i)
Stock Certificates or DWAC. The Company will deliver to the Holder, or Holder's authorized
designee, no later than two 2 Trading Days after the Conversion Date, a certificate or certificates (which certificate(s) shall
be free of restrictive legends and trading restrictions) representing the number of shares of Common Stock being acquired upon
the conversion of this Note. In lieu of delivering physical certificates representing the shares of Common Stock issuable upon
conversion of this Note, provided the Company's transfer agent is participating in the Depository Trust Company ("DTC")
Fast Automated Securities Transfer ("FAST") program, upon request of the Holder, the Company shall use commercially reasonable
efforts to cause its transfer agent to electronically transmit such shares issuable upon conversion to the Holder (or its designee),
by crediting the account of the Holder's (or such designee's) prime broker with DTC through its Deposits and Withdrawal at Custodian
("DWAC") program (provided that the same time periods herein as for stock certificates shall apply).
(ii)
Charges, Expenses. Issuance of Common Stock to Holder, or any of its assignees, upon the
conversion of this Note shall be made without charge to the Holder for any issuance fee, transfer tax, postage/mailing charge or
any other expense with respect to the issuance of such Common Stock. Company shall pay all Transfer Agent fees incurred from the
issuance of the Common stock to Holder and acknowledges that this is a material obligation of this Note.
If the Company fails to deliver to the Holder
such certificate or certificates (or shares through DTC) pursuant to this Section (free of any restrictions on transfer or legends)
prior to 3 Trading Days after the Conversion Date, the Company shall pay to the Holder as liquidated damages an amount equal to
$2,000 per day, until such certificate or certificates are delivered. The Company acknowledges that it would be extremely difficult
or impracticable to determine the Holder's actual damages and costs resulting from a failure to deliver the Common Stock and the
inclusion herein of any such additional amounts are the agreed upon liquidated damages representing a reasonable estimate of those
damages and costs. Such liquidated damages will be automatically added to the Principal Amount of the Note.
(c)
Reservation and Issuance of Underlying Securities. The Company covenants that it will at all
times reserve and keep available out of its authorized and unissued Common Stock solely for the purpose of issuance upon conversion
of this Note (and repayments in Common Stock), free from preemptive rights or any other actual contingent purchase rights of persons
other than the Holder, not less than three times the number of shares of Common Stock as shall be issuable (taking into account
the adjustments under this Section 1 but without regard to any ownership limitations contained herein) upon the conversion of this
Note to Common Stock (the "Required Reserve"). These shares shall be reserved in proportion with the consideration actually
received by the Company and the total sharers reserved will be increased with future payments of consideration by Holder to ensure
the Required Reserve is met. The Company covenants that all shares of Common Stock that shall be issuable will, upon issue, be
duly authorized, validly issued, fully-paid, non-assessable and freely-tradable. If the amount of shares on reserve at the Transfer
Agent for this Note in Holder's name shall drop below the Required Reserve, the Company will, within two (2) business days of written
notification from Holder, instruct the Transfer Agent to increase the number of shares so that the Required Reserve is met. The
Company agrees that this is a material term of this Note and any breach of this will result in a default of the Note.
(d)
Conversion Limitation. The Holder will not submit a conversion to the Company that would result
in the Holder owning more than 9.99% of the then total outstanding shares of the Company ("Restricted Ownership Percentage").
Section 2.00 Defaults and Remedies.
(e)
Events of Default. An "Event of Default" is: (i) a default in payment of
any amount due hereunder which default continues for more than 5 business days after the due date; (ii) a default in the timely
issuance of underlying shares upon and in accordance with terms hereof, which default continues for 3 Business Days after the Company
has failed to issue shares or deliver stock certificates within the 3rd day following the Conversion Date; (iii) failure by the
Company for 3 days after notice has been received by the Company to comply with any material provision of the Note Purchase Agreement;
(iv) failure of the Company to remain compliant with DTC, thus incurring a "chilled" status with DTC; (v) if the Company
is subject to any Bankruptcy Event; (vi) any failure of the Company to satisfy its "filing" obligations under the rules
and guidelines issued by OTC Markets News Service, OTC Markets.com and their affiliates; (vii) any failure of the Company to provide
the Holder with information related to the corporate structure including, but not limited to, the number of authorized and outstanding
shares, public float, etc. within 1 day of request by Holder; (viii) failure to have sufficient number of authorized but unissued
shares of the Company's Common Stock available for any conversion; (ix) failure of Company's Common Stock to maintain a bid price
in its trading market which occurs for at least 3 consecutive Trading Days; (x) any delisting for any reason; (xi) failure by Company
to pay any of its Transfer Agent fees or to maintain a Transfer Agent of record; (xii) any trading suspension imposed by the Securities
and Exchange Commission under Sections 120) or 12(k) of the 1934 Act; (xiii) any breach of Section 1.00 (c); (xiv) or any default
after any cure period under, or acceleration prior to maturity of, any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company in excess of $50,000
or for money borrowed the repayment of which is guaranteed by the Company in excess of $50,000, whether such indebtedness or guarantee
now exists or shall be created hereafter.
Remedies. If an Event
of Default occurs and is continuing with respect to the Note, the Holder may declare all of the then outstanding Principal Amount
of this Note, including any interest due thereon, to be due and payable immediately without further action or notice. In the event
of such acceleration, the amount due and owing to the Holder shall be increased to 150% of the outstanding Principal Amount of
the Note held by the Holder plus all accrued and unpaid interest, fees, and liquidated damages, if any. Additionally, this Note
shall accrue interest on any unpaid principal from and after the occurrence and during the continuance of an Event of Default at
a rate of 20%. Finally, the Note will accrue liquidated damages of $1,000 per day from and after the occurrence and during the
continuance of an Event of Default. The Company acknowledges that it would be extremely difficult or impracticable to determine
the Holder's actual damages and costs resulting from an Event of Default and any such additional amounts are the agreed upon liquidated
damages representing a reasonable estimate of those damages and costs. The remedies under this Note shall be cumulative and automatically
added to the principal value of the Note.
Section 3.00 General.
(f)
Payment of Expenses. The Company agrees to pay all reasonable charges and expenses,
including attorneys' fees and expenses, which may be incurred by the Holder in successfully enforcing this Note and/or collecting
any amount due under this Note.
(g)
Assignment, Etc. The Holder may assign or transfer this Note to any transferee at its
sole discretion. This Note shall be binding upon the Company and its successors and shall inure to the benefit of the Holder and
its successors and permitted assigns.
(h)
Governing Law; Jurisdiction.
(i)
Governing Law. This note will be governed by and
construed in accordance with the laws of the state of California without regard to any conflicts of laws or provisions thereof
that would otherwise require the application of the law of any other jurisdiction.
(ii)
Jurisdiction. Any dispute or claim arising to or
in any way related to this Note or the rights and obligations of each of the parties hereto shall be settled by binding arbitration
in San Diego, California. All arbitration shall be conducted in accordance with the rules and regulations of the American Arbitration
Association ("AAA"). AAA shall designate an arbitrator from an approved list of arbitrators following both parties'
review and deletion of those arbitrators on the approved list having a conflict of interest with either party. The Company agrees
that a final non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on such judgment or in any other lawful manner.
(iii)
No Jury Trial. The Company hereto knowingly and voluntarily waives any and all rights
it may have to a trial by jury with respect to any litigation based on, or arising out of, under, or in connection with, this note.
IN WITNESS WHEREOF, the Company has
caused this Convertible Promissory Note to be duly executed on the day and in the year first above written.
WELL POWER, INC.
By: /s/ Dan Patience
Name: Dan Patience
Title: President
Date: 8/6/2014
This Note is acknowledged as: Note of
August 6, 2014
NEITHER THE ISSUANCE NOR SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.
Well Power, Inc.
$25,000.00 NOTE
TEN PERCENT (10%) CONVERTIBLE NOTE
DATED JULY 23, 2014
THIS NOTE (the "Note") is a duly
authorized Convertible Note of Well Power, Inc., a Nevada corporation (the "Company").
FOR VALUE RECEIVED, the Company promises to
pay Tarpon Bay Partners, LLC (the "Holder"), the principal sum of Twenty Five Thousand Dollars and No Cents ($25,000.00)
(the "Principal Amount") or such lesser principal amount following the conversion or conversions of this Note in accordance
with Paragraph 2 (the "Outstanding Principal Amount") on January 30, 201 5 (the "Maturity Date"), and to pay
interest on the Outstanding Principal Amount ("Interest") in a lump sum on the Maturity Date, at the rate of ten percent
(10%) per Annum (the "Rate") from the date of issuance.
| 1) | Accrual of Interest shall commence on the date of this Note and continue
until the Company repays or provides for repayment in full the Outstanding Principal Amount and all accrued but unpaid Interest.
Accrued and unpaid Interest shall bear Interest at the Rate until paid, compounded monthly. The Outstanding Principal Amount of
this Note is payable on the Maturity Date in such coin or currency of the United States as at the time of payment is legal tender
for payment of public and private debts, at the address last appearing on the Note Register of the Company as designated in writing
by the Holder from time to time. The Company may prepay principal and interest on this Note at any time before the Maturity Date.
The Company will pay the Outstanding Principal Amount of this Note on the Maturity Date, free of any withholding or deduction of
any kind to the Holder as of the Maturity Date and addressed to the Holder at the address appearing on the Note Register. |
This Note is subject to the following additional
provisions:
| 2) | All payments on account of the Outstanding Principal Amount of this
Note and all other amounts payable under this Note (whether made by the Company or any other person) to or for the account of the
Holder hereunder shall be made free and clear of and without reduction by reason of any present and future income, stamp, registration
and other taxes, levies, duties, cost, and charges whatsoever imposed, assessed, levied or collected by the United States or any
political subdivision or taxing authority thereof or therein, together with interest thereon and penalties with respect thereto,
if any, on or in respect of this Note (such taxes, levies, duties, costs and charges being herein collectively called "Taxes"). |
| 3) | The Holder of this Note is entitled, at its option, at any time after
the issuance of this Note, to convert all or any lesser portion of the Outstanding Principal Amount and accrued but unpaid Interest
into Common Stock at a conversion price (the "Conversion Price") for each share of Common Stock at a 50% discount from
the lowest closing bid price in the 20 trading days prior to the day that the Holder requests conversion, unless otherwise modified
by mutual agreement between the Parties (the "Conversion Price"); provided that if the closing bid price for the common
stock on the Clearing Date (defined below) is lower than that used for the Conversion Price, then the Conversion Price shall be
adjusted such that the Discount shall be taken from the closing bid price on the Clearing Date, and the Company shall issue additional
shares to Holder to reflect such adjusted conversion price. For interest that accrues pursuant to the terms of this Note, the conversion
price shall be at $.001, par value, regardless of the trading price ("Interest Conversion "). Upon the exercise of any
conversion, the Holder shall notify the Issuer whether principal or interest is being converted (The Common stock into which the
Note is converted shall be referred to in this agreement as "Conversion Shares.") If the Issuer's Common stock is chilled
for deposit at OTC, becomes chilled at any point while this Agreement remains outstanding or deposit otherwise additional fees
due to a Yield Sign, Stop Sign or other trading restrictions, an additional 10% discount will be attributed to the Conversion Price
defined hereof and the conversion dollar amount per conversion shall be reduced by a flat fee of $1,500.00 shall be charged to
the Issuer to cover costs associated with the deposit of chilled stocks for each conversion. For purpose of this Section, the closing
bid price of the Common Stock shall be the closing bid price as reported by the Nasdaq Stock Market, or on the over-the-counter
market or, if the Common Stock is listed on another stock market or exchange, the closing bid price on such exchange as reported
by Bloomberg LP. In the event that holder elects to convert this Note in part, the conversion price for each conversion event shall
be calculated at the time of conversion in part. The Holder may convert this Note into Common Stock by delivering a conversion
notice, the form of conversion notice attached to the Note as Exhibit B, executed by the Holder of the Note evidencing such Holder's
intention to convert the Note. For purposes of this Agreement, the Clearing Date shall be on the date in which the conversion shares
are deposited into the Holder 's brokerage account and Holder 's broker has confirmed with Holder the Holder may execute trades
of the conversion shares. The Clearing Date will be reported to Issuer, and Issuer will issue reset shares if needed. The Company
shall bear any and all miscellaneous expenses that may arise as a result of conversion and delivery of shares of common stock in
respect of the Note, including but are not limited to the cost of the issuance of a Rule 144 legal opinion, transfer agent fees,
equity issuance and deposit fees, etc. At Holder's option, any accrued costs paid by Holder may be subtracted from the dollar amount
of any conversion of the Note. |
Share Issuance. So long as this Note
is outstanding, and prior to the complete conversion or payment of this Note, if the Company shall issue any Common Stock for consideration
per share that is less than the Conversion Price that would be in effect at the time of such issuance, then, and thereafter successively
upon each such issuance, the Conversion Price shall be reduced to such other lower issue price. For purposes of this adjustment,
the issuance of any security or debt instrument of the Company carrying the right to convert such security or debt instrument into
Common Stock, or of any warrant, right or option to purchase Common Stock shall result in an adjustment to the Conversion Price
upon the issuance of the above described security, debt instrument, warrant, right or option, and again upon the issuance of shares
of Common Stock upon exercise of such conversion or purchase right if such issuance is at a price lower than the then applicable
Conversion Price. Common Stock issued or issuable by the Borrower for no consideration will be deemed issuable or to have been
issued for $0.0001 per share of Common Stock. The reduction of the Conversion Price described in this paragraph is in addition
to all other rights of the Holder of this Note.
The Company will not issue fractional
shares or script representing fractions of shares of Common Stock on conversion, but the Company will round the number of shares
of Common Stock issuable up to the nearest whole share. The date on which a Notice of Conversion is given shall be deemed to be
the date on which the Holder notifies the Company of its intention to so convert by delivery, by facsimile transmission, email,
or otherwise, of a copy of the Notice of Conversion . Notice of Conversion may be sent by email to the Company, Attn: Dan Patience,
President. At the Maturity Date, subject to Section 13 below, the Company will pay any unconverted Outstanding Principal Amount
and accrued Interest thereon, at the option of the Holder, in either (a) cash or (b) Common Stock valued at a price equal to the
Conversion Price determined as if the Note was converted in accordance with its terms into Common Stock on the Maturity Date.
Without in any way limiting the Holder's
right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common
Stock issuable upon conversion of this Note is not delivered by the Deadline (3 Trading days) the Borrower shall pay to the Holder
$1,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount
shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder
(by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to
the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such
additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees
that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interfere
with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated
damages provision contained in this Section are justified.
| 4) | No provision of this Note shall alter or impair the obligation of
the Company, which is absolute and unconditional, to the payment of the Outstanding Principal Amount of this Note at the Maturity
Date, and in the coin or currency herein prescribed. This Note and all other Notes now or hereafter issued on similar terms are
direct obligations of the Company. I n the event of any liquidation, reorganization, winding up or dissolution, repayment of this
Note shall not be subordinate in any respect to any other indebtedness of the Company outstanding as of the date of this Note or
hereafter incurred by the Company. |
Such non-subordination shall extend
without limiting the generality of the foregoing, to all indebtedness of the Company to banks, financial institutions, other secured
lenders, equipment lessors and equipment finance companies, but shall exclude trade debts. Any warrants, options or other securities
convertible into stock of the Company issued before the date hereof shall rank pari passu with the Note in all respects
| 5) | If at any time or from time to time after the date of this Note,
the Common Stock issuable upon the conversion of the Note is changed into the same or different numbers of shares of any class
or classes of stock, whether by recapitalization or otherwise, then in each such event the Holder shall have the right thereafter
to convert the Note into the kind of security receivable in such recapitalization, reclassification or other change by holders
of Common Stock, all subject to further adjustment as provided herein. In such event, the formulae set forth herein for conversion
and redemption shall be equitably adjusted to reflect such change in number of shares or, if shares of a new class of stock are
issued, to reflect the market price of the class or classes of stock issued in connection with the above described transaction. |
| 6) | This Note shall be governed by and construed in accordance with the
laws of the State of Connecticut. Each of the parties consents to the jurisdiction of the state or Federal courts of the State
of Connecticut residing in Fairfield County in connection with any dispute arising under this Note and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum non coveniens, to the bringing of
any such proceeding in such jurisdictions. Each of the parties hereby waives the right to a trial by jury in connection with any
dispute arising under this Note. |
7)
The following shall constitute an "Event of Default":
| a. | The Company shall default in the payment of principal and interest
on this Note and same shall continue for a period of five (5) days; or |
| b. | Any of the representations or warranties made by the Company herein,
in any certificate or financial or other written statements heretofore or hereafter furnished by the Company in connection with
the execution and delivery of this Note shall be false or misleading in any material respect at the time made; or |
| c. | The Company shall fail to perform or observe, in any material respect,
any other covenant, term, provision, condition, agreement or obligation of any Note and such failure shall continue uncured for
a period of thirty (30) days after written notice from the Holder of such failure; or |
| d. | The Company fails to authorize or to cause its Transfer Agent to
issue shares of Common Stock upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of
this Note, fails to transfer or to cause its Transfer Agent to transfer any certificate for shares of Common Stock issued to the
Holder upon conversion of this Note and when required by this Note, and such transfer is otherwise lawful, or fails to remove any
restrictive legend on any certificate or fails to cause its Transfer Agent to remove such restricted legend, in each case where
such removal is lawful, as and when required by this Note, the Agreement, and any such failure shall continue uncured for ten (10)
business days; or |
| e. | The Company shall make an assignment for the benefit of creditors
or commence proceedings for its dissolution; or shall apply for or consent to the appointment of a trustee, liquidator or receiver
for its or for a substantial part of its property or business; or |
| f. | A trustee, liquidator or receiver shall be appointed for the Company
or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after
such appointment; or |
| g. | Any governmental agency or any court of competent jurisdiction at
the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties
or assets of the Company and shall not be dismissed within sixty (60) days thereafter; or |
| h. | Any money judgment, writ or warrant of attachment, or similar process
in excess of One Hundred Thousand ($100,000) Dollars in the aggregate shall be entered or filed against the Company or any of its
properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of sixty (60) days or in any event
later than five (5) days prior to the date of any proposed sale thereunder; or |
| i. | Bankruptcy, reorganization, insolvency or liquidation proceedings
or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against
the Company and, if instituted against the Company, shall not be dismissed within sixty (60) days after such institution or the
Company shall by any action or answer approve of, consent to, or acquiesce in any such proceedings or admit the material allegations
of, or default in answering a petition filed in any such proceeding; or |
| j. | The Company shall have its Common Stock suspended or delisted from
an exchange or over-the-counter market from trading for in excess of five trading days. |
Then, or at any time thereafter,
and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall
not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder
may consider all obligations under this Note immediately due and payable within five (5) days of notice, without presentment, demand,
protest or notice of any kinds, all of which are hereby expressly waived, anything herein or in any note or other instruments contained
to the contrary notwithstanding, and the Holder may immediately enforce any and all of the Holder's rights and remedies provided
herein or any other rights or remedies afforded by law.
| 8) | If one or more of the "Events of Default" as described
above shall occur, the Company agrees to pay all costs and expenses, including reasonable attorney's fees, which the Holder may
incur in collecting any amount due under, or enforcing any terms of, this Note. |
9)
Prepayment. At any time that the Note remains outstanding, upon three (3) business days' written
notice (the "Prepayment Notice") to the Holder, the Company may pay 150% of the entire Outstanding Principal Amount of
the Note plus any accrued but unpaid interest. If the Company gives written notice of prepayment, the Holder continues to have
the right to convert principal and interest on the Note into Conversion Shares until three (3) business days elapses from the Prepayment
Notice.
10)
The Company covenants that until all amounts due under this Note are paid in full, by conversion
or otherwise, unless waived by the Holder or subsequent Holder in writing, the Company shall:
give prompt written notice to the
Holder of any Event of Default or of any other matter which has resulted in, or could reasonably be expected to result in a materially
adverse change in its financial condition or operations;
give prompt notice to the Holder of
any claim, action or proceeding which, in the event of any unfavorable outcome, would or could reasonably be expected to have a
Material Adverse Effect (as defined in the Note Purchase Agreement) on the financial condition of the Company;
at all times reserve and keep available
out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of this Note into Common Stock, such
number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of the Outstanding
Principal Amount of this Note into Common Stock.
| 11) | Upon receipt by the Company of evidence from the Holder reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, |
| a. | in the case of loss, theft or destruction, upon provision of indemnity
reasonably satisfactory to it and/or its transfer agent, or |
| b. | (ii) in the case of mutilation, upon surrender and cancellation of
this Note, then the Company at its expense will execute and deliver to the Holder a new Note, dated the date of the lost, stolen,
destroyed or mutilated Note, and evidencing the outstanding and unpaid principal amount of the lost, stolen, destroyed or mutilated
Note. |
| 12) | Reservation of Shares. Maker shall instruct its transfer agent to
reserve at least Five Hundred and Fifty Thousand (550,000) shares of its Common Stock for issuance to Holder in connection with
conversion of this Note, and shall provide Holder with a copy of such instruction letter. |
| 13) | The Holder may not convert this Note to the extent such conversion
would result in the Holder, together with any affiliate thereof, beneficially owning (as determined in accordance with Section
13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 9.99% of the then issued and outstanding shares of
Common Stock held by such Holder after application of this Section. Since the Holder will not be obligated to report to the Company
the number of shares of Common Stock it may hold at the time of a conversion hereunder, unless the conversion at issue would result
in the issuance of shares of Common Stock in excess of 9.99% of the then outstanding shares of Common Stock without regard to any
other shares which may be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation
to determine whether the restriction contained in this Section will limit any particular conversion hereunder and to the extent
that the Holder determines that the limitation contained in this Section applies, the determination of which portion of the principal
amount of Note are convertible shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion
Notice for a principal amount of Note that would result in the issuance of in excess of the permitted amount hereunder, without
regard to any other shares that the Holder or its affiliates may beneficially own, the Company shall notify the Holder of this
fact and shall honor the conversion for the maximum principal amount permitted to be converted on such Conversion Date and, at
the option of the Holder, either retain any principal amount tendered for conversion in excess of the permitted amount hereunder
for future conversions or return such excess principal amount to the Holder. The provisions of this Section may be waived by a
Holder (but only as to itself and not to any other Holder) upon not less than 65 days prior notice to the Company. |
IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed by an officer thereunto duly authorized, as of the date first written above.
Well Power, Inc.
By: /s/ Dan Patience
Dan Patience, President
NEITHER
THE ISSUANCE AND
SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES
INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTNE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (B) AN OPINION OF
COUNSEL (WHICH COUNSEL SHALL BE SELECTED
BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
Principal
Amount: $10,000.00 |
Issue
Date: July 25,
2014 |
CONVERTIBLE
PROMISSORY NOTE
FOR
VALUE RECEIVED, WELL
POWER, INC., a Nevada
corporation (hereinafter called
the "Borrower"),
hereby promises to
pay to the
order of Melvyn Maller,
or registered assigns (the "Holder")
the sum of $10,000.00 together
with any interest as set forth herein,
on July 25, 2015 (the "Maturity Date"),
and to pay interest on the unpaid principal balance hereof at the rate
of eight percent (8%) (the "Interest
Rate") per annum
from the date hereof (the "Issue Date") until the same becomes
due and payable, whether at maturity or upon acceleration or by
prepayment or otherwise. Subject to Section 1.8 below, this Note may be prepaid
in whole or in part at any time. Any amount of principal
or interest on this Note which
is not paid when due shall bear interest at
the lower of the rate of eighteen percent
(18%) per annum or the highest interest rate
permitted by law from the
due date thereof until
the same is paid (the
"Default Interest Rate"). Interest
shall commence accruing on the
Issue Date, shall be computed on the
basis of a 365-day year and the actual number
of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share
(the "Common Stock") in accordance with the
terms hereof) shall be made in lawful
money of the United
States of America. All payments shall
be made at such address as the Holder shall
hereafter give to the Borrower by written notice made
in accordance with the provisions of this Note. Whenever any amount expressed
to be due by the terms of this Note is due on any day which is not a business day, the same
shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment
date which is not the
date on which this Note is paid
in full, the extension of the due date thereof shall not be taken
into account for purposes of determining the amount of interest due on such date. As used
in this Note, the term
"business day" shall mean any day other than a Saturday, Sunday or a day
on which commercial banks in
the city of New York, New York are authorized or required by law or executive order to remain closed. Delivery of this
Note is subject to Holder's execution of Holder's representations set forth as Exhibit
B.
This
Note is free
from all taxes, liens, claims
and encumbrances with
respect to the issue thereof
and shall not
be subject to
preemptive rights or other
similar rights of shareholders of the
Borrower and will not
impose personal liability upon the holder
thereof.
The
following terms shall apply to
this Note:
ARTICLE
I
CONVERSION
RIGHTS
1.1
Conversion Right. The Holder
shall have the right
from time to
time, and at
any time the Note
is still outstanding, to convert
all or any part of the outstanding and unpaid principal and
interest on this Note into fully
paid and non-assessable shares of Common
Stock, as such Common Stock exists on the
Issue Date, or any shares
of capital stock or other securities
of the Borrower into which such
Common Stock shall hereafter be changed
or reclassified at the conversion price (the "Conversion Price")
determined as provided herein (a "Conversion");
provided, however, that in no event shall the Holder be entitled to convert
any portion of this Note in excess of that
portion of this Note upon
conversion of which the
sum of (1) the number of shares
of Common Stock beneficially owned by the Holder and
its affiliates (other than shares of Common Stock which may
be deemed beneficially owned through the ownership of the unconverted portion
of the Note or the unexercised or unconverted portion of
any other security of the Borrower
subject to a limitation on conversion or exercise analogous to
the limitations contained herein) and (2) the
number of shares of Common Stock issuable upon the conversion of the portion
of this Note with respect to
which the determination of this proviso
is being made, would result in beneficial ownership
by the Holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock. For purposes of the
proviso to the immediately preceding
sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange
Act"), and Regulations 13D-G thereunder, except
as otherwise provided in
clause (1) of such proviso, provided,
further, however, that the
limitations on conversion may be
waived by the Holder upon, at the
election of the Holder, not less than 61
days' prior notice to
the Borrower, and the provisions of the conversion limitation shall continue
to apply until such 61st day (or
such later date, as determined by the Holder,
as may be specified
in such notice of
waiver). The number of shares of
Common Stock to be
issued upon each conversion of this Note shall be
determined by dividing the Conversion Amount
(as defined below) by the applicable Conversion
Price then in effect on the date
specified in the notice of
conversion, in the form attached
hereto as Exhibit A (the "Notice
of Conversion"), delivered to the Borrower by the Holder
in accordance with Section 1.4 below; provided that
the Notice of Conversion is submitted
by facsimile (or by other means
resulting in, or reasonably expected
to result in, notice)
to the Borrower before 5:00 p.m., New York,
New York time on such
conversion date (the "Conversion Date"). The term "Conversion Amount" means, with respect to any conversion
of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Borrower's
option, accrued and unpaid interest, if any, on
such principal amount at the interest
rates provided in this Note to the Conversion
Date, provided, however, that the
Company shall have the right to pay any
or all interest in cash.
1.2
Conversion Price.
(a)
Calculation of Conversion
Price. The conversion
price (the "Conversion
Price") shall
equal the lower of
(i) $.09 or (ii) the Variable
Conversion Price (as defined herein)(subject
to equitable adjustments for stock splits, stock dividends or rights offerings by the
Borrower relating to the Borrower's securities or the securities of any subsidiary
of the Borrower, combinations, recapitalization, reclassifications, extraordinary
distributions and similar events). The "Variable Conversion Price" shall
mean 50% multiplied by the Market Price
(as defined herein)(representing a discount rate
of 50%). "Market Price" means the
lowest individual daily VWAP (as
defined below) for the Common Stock during
the ten (10) Trading Day period ending
one Trading Day prior
to the date the Conversion Notice is received by the Holder
from the Borrower (the "Conversion
Date"). "VWAP" means the
volume weighted average price (the aggregate
sales price of all trades of
Common Stock during a Trading Day
divided by the
total number of
shares of Common Stock traded during such Trading
Day) of the Common Stock during a Trading Day as reported on Bloomberg, L.P.,
Quotestream, or other applicable service.
1.3
Authorized Shares. The Borrower
covenants that during
the period the conversion
right exists, the
Borrower will reserve
from its authorized
and unissued Common Stock a sufficient
number of shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Note. The
Borrower is required at all times to have authorized and reserved five times the number
of shares that is actually issuable upon full conversion of the Nate (based on the Conversion
Price of the Nate in effect from time to time) (the "Reserved Amount"). The
Borrower represents that upon issuance, such shares will be duly and
validly issued, fully paid and non-assessable.
In addition, if the Borrower shall
issue any securities or make any change
to its capital structure which would change the number of shares of Common Stock into
which the Note shall be convertible at the then current Conversion Price, the Borrower shall
at the same time make proper
provision so that
thereafter there shall be a sufficient
number of shares
of Common Stock authorized and reserved, free from preemptive rights, for conversion
of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed
its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note (in the form attached hereto
as Exhibit C), and (ii) agrees that its issuance
of this Note shall constitute full authority to its officers and agents
who are charged with the duty of
executing stock certificates to
execute and issue the necessary certificates
for shares of Common Stock in accordance with the terms and conditions of this Note.
1.4
Method of
Conversion.
(a)
Mechanics of Conversion.
Subject to Section
1.1, this Note
may be converted by
the Holder in
whole or in
part at any
time from time to
time after the
Issue Date, by (A) submitting to
the Borrower a Notice of Conversion
(by facsimile or other reasonable means of communication dispatched
on the Conversion Date prior
to 5:00 p.m., New York, New York time) and
(B) subject to Section 1.4(b), surrendering this
Note at the principal office of the
Borrower.
(b)
Surrender of Note
upon Conversion. Notwithstanding
anything to the contrary
set forth herein,
upon conversion of
this Note in accordance with
the terms hereof, the Holder shall
not be required to
physically surrender this Note to
the Borrower unless the entire unpaid principal
amount of this Note is so converted. The
Holder and the Borrower shall maintain
records showing the principal amount
so converted and the dates of such conversions or shall use
such other method, reasonably satisfactory
to the Holder and
the Borrower, so as not to require physical
surrender of this Nate upon
each such conversion. In
the event of any
dispute or discrepancy, such records of
the Borrower shall, prima facie, be controlling
and determinative in the absence of manifest error. Notwithstanding the foregoing,
if any portion of this Note is converted as aforesaid, the Holder
may not transfer this Note unless the
Holder first physically surrenders this
Note to the Borrower, whereupon the
Borrower will forthwith issue and deliver upon the
order of the Holder a new Note of like tenor, registered
as the Holder (upon payment by the
Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal
amount of this Note. The Holder
and any assignee, by
acceptance of this Note, acknowledge
and agree that, by reason
of the provisions of this paragraph, following conversion of
a portion of this Note, the unpaid
and unconverted principal amount of this
Note represented by this Note may be less
than the amount stated on the face hereof.
(c)
Payment of Taxes. The Borrower
shall not be
required to pay
any tax which may
be payable in
respect of any transfer involved in
the issue and delivery of shares of Common Stock or other securities or property on
conversion of this Note in a name other
than that of the Holder (or in street name), and the Borrower shall not be required
to issue or deliver any such shares or other
securities or property unless and until the person or persons
(other than the Holder or the custodian
in whose street name such shares are
to be held for the
Holder's account) requesting the issuance thereof shall have paid to the
Borrower the amount of
any such tax or shall have established
to the satisfaction of the Borrower that such tax has been paid.
(d)
Delivery of Common
Stock upon Conversion.
Upon receipt by
the Borrower from the
Holder of a
facsimile transmission (or other
reasonable means of communication) of a Notice of Conversion meeting
the requirements for conversion as provided in this Section 1.4, the Borrower
shall issue and deliver or cause to be
issued and delivered to or upon the order of the
Holder certificates for the Common Stock
issuable upon such conversion within three (3)
business days after such receipt (and, solely
in the case of conversion of the entire unpaid
principal amount hereof, surrender of this Note)
(such second business day being hereinafter referred
to as the "Deadline") in accordance
with the terms hereof.
(e)
Obligation of Borrower
to Deliver Common
Stock. Upon receipt
by the Borrower of
a Notice of
Conversion, the Holder
shall be deemed to be the
holder of record of the Common Stock issuable upon
such conversion, the outstanding principal
amount and the amount of accrued and unpaid interest
on this Note shall be reduced to reflect such conversion, and, unless the
Borrower defaults on its obligations under
this Article I, all rights with respect to
the portion of this Note being so converted
shall forthwith terminate except the right to
receive the Common Stock or other securities, cash or other assets, as herein provided,
on such conversion. If the Holder shall have
given a Notice of Conversion as provided herein, the
Borrower's obligation to issue and deliver the
certificates for Common Stock shall
be absolute and unconditional, irrespective
of the absence of any action by the Holder
to enforce the same, any waiver or consent with respect to
any provision thereof, the recovery of any judgment against any person or any
action to enforce the same, any failure
or delay in the enforcement of any other obligation of the Borrower to the holder
of record, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the Holder of any
obligation to the Borrower, and irrespective of
any other circumstance which might otherwise limit such obligation of the Borrower
to the Holder in connection with such conversion. The Conversion Date specified in
the Notice of Conversion shall be the
Conversion Date so long
as the Notice of Conversion is received by the Borrower
before 5:00 p.m., New York, New
York time, on such date.
(f)
Delivery of Common
Stock by Electronic Transfer.
In lieu of delivering physical certificates
representing the Common Stock
issuable upon conversion, provided
the Borrower's transfer agent is participating in
the Depository Trust Company ("DTC")
Fast Automated Securities Transfer ("FAST") program, upon
request of the Holder and its compliance with the provisions contained in Section
1.1 and in this Section
1.4, the Borrower shall use its best efforts
to cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion to
the Holder by crediting the account
of Holder's Prime Broker with DTC through its
Deposit Withdrawal Agent Commission ("DWAC")
system.
(g)
Failure to Deliver
Common Stock Prior to
Deadline. Without in
any way limiting the
Holder's right to
pursue other remedies, including
actual damages and/or equitable relief,
the parties agree that if delivery of
the Common Stock issuable upon conversion of
this Note is more
than three (3) business days after the Deadline (other
than a failure due to the circumstances described in Section 1.3
above, which failure shall be governed by such Section)
the Borrower shall pay to the Holder
$100 per day in cash, for each day beyond
the Deadline that the Borrower fails to deliver
such Common Stock. Such cash amount shall be paid to Holder by the fifth day of
the month following the month in
which it has accrued or, at the option of
the Holder (by written notice to
the Borrower by the first day
of the month following the month in which it has
accrued), shall be added to
the principal amount of this Note,
in which event interest shall accrue thereon in accordance with
the terms of this Note and such additional
principal amount shall be convertible into Common Stock in accordance with the
terms of this Note. In addition,
the Conversion Price for the conversion underlying
the delivery of Common Stock that was delayed
more than three
(3) business days after the Deadline shall be adjusted to the lower of
(i) the Conversion Price as of
such Conversion Notice Date and (ii) the
Conversion Price if the Conversion Notice was received on the date
that the Conversion Shares are actually received by the Holder.
1.5 Concerning
the Shares. The
shares of Common
Stock issuable upon
conversion of this Note
may not be
sold or transferred
unless (i) such shares are sold pursuant
to an effective registration statement under the Act or (ii)
the Borrower or its transfer agent shall have been furnished with an opinion
of counsel (which opinion shall be in
form, substance and scope customary for
opinions of counsel in comparable transactions)
to the effect that the shares to
be sold or transferred may be sold or transferred
pursuant to an exemption from
such registration or (iii) such
shares are sold or transferred pursuant
to Rule 144 under the Act (or a successor
rule) ("Rule 144") or (iv) such shares
are transferred to an "affiliate" (as defined in Rule 144)
of the Borrower who agrees to
sell or otherwise transfer the shares
only in accordance with this Section 1.5 and who
is an Accredited Investor (as defined
under the Act). Subject to
the removal provisions set forth below, until such time as
the shares of Common Stock issuable
upon conversion of this Note have been
registered under the
Act or otherwise may be
sold pursuant to Rule 144 without any restriction as to
the number of securities as of a
particular date that can then be
immediately sold, each certificate
for shares of
Common Stock issuable upon conversion of this Note that has not
been so included in an effective registration statement or
that has not been sold pursuant to
an effective registration statement
or an exemption that permits removal
of the legend, shall bear a legend substantially
in the following form, as appropriate:
"NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT ECURED BY THE SECURITIES."
The
legend set forth
above shall be
removed and the
Borrower shall issue
to the Holder
a new certificate therefore
free of any
transfer legend if
(i) the Borrower
or its transfer
agent shall have received an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable
transactions, to the effect that
a public sale or
transfer of such Common Stock
may be made without registration under
the Act and
the shares are so sold
or transferred, (ii) such
Holder provides the Borrower or
its transfer agent
with reasonable assurances that the
Common Stock issuable upon conversion
of this Note (to
the extent such securities
are deemed to have been acquired
on the same date) can be sold
pursuant to Rule 144 or (iii)
in the case of the Common Stock
issuable upon conversion of this
Note, such security
is registered for
sale by the Holder under an
effective registration statement filed under
the Act or otherwise
may be sold pursuant
to Rule 144 without any restriction as
to the number
of securities as of a particular
date that can then be immediately sold.
1.6
Effect of Certain
Events.
(a)
Effect of Merger,
Consolidation, Etc. At the
option of the Holder,
the sale, conveyance or
disposition of all
or substantially all
of the assets of the Borrower,
the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting
power of the Borrower is disposed of, or the consolidation, merger or other
business combination of the Borrower with
or into any other
Person (as defined below)
or Persons when the Borrower is
not the survivor shall either: (i) be
deemed to be an Event
of Default (as defined in Article II) pursuant to which the Borrower shall
be required to pay to the Holder upon the consummation of and as a condition to such transaction
an amount equal to the Default Amount (as defined in Article II)
or (ii) be treated
pursuant to Section l.6(b) hereof.
"Person" shall mean any individual, corporation, limited
liability company, partnership, association, trust or other entity or organization.
(b)
Adjustment Due to
Merger, Consolidation, Etc.
If, at any
time when this Note
is issued and
outstanding and prior
to conversion of all of the Note, there shall be any merger,
consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares
of Common Stock of the Borrower shall be changed
into the same or
a different number of shares of another
class or classes of stock or securities of the Borrower or another entity, or in case
of any sale or conveyance of all or substantially all of the assets of the Borrower
other than in connection with a plan of complete liquidation of the Borrower, then
the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms
and conditions specified herein and in lieu of the shares of Common Stock immediately
theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in
such transaction had this Note been converted in
full immediately prior
to such transaction (without regard to
any limitations on conversion set forth
herein), and in any such case appropriate provisions
shall be made with respect to the rights and interests of the Holder of this Note
to the end that the provisions hereof (including, without limitation, provisions for
adjustment of the
Conversion Price and of the number of shares issuable upon conversion of
the Note) shall thereafter be applicable,
as nearly as may be practicable in relation to any securities or assets thereafter
deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in
this Section l.6(b) unless (a) it first
gives, to the extent practicable,
thirty (30) days prior written notice
(but in any event at least fifteen
(15) days prior written notice) of the record
date of the special meeting of shareholders to approve, or if there is no such record
date, the consummation of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event
or sale of assets (during which time the Holder shall
be entitled to convert this Note) and (b) the resulting successor or acquiring entity
(if not the Borrower) assumes by written
instrument the obligations of this Section l.6(b). The above provisions shall similarly
apply to successive
consolidations, mergers, sales, transfers or
share exchanges.
(c)
Adjustment Due to
Distribution. If the
Borrower shall declare
or make any
distribution of its assets
(or rights to acquire
its assets) to holders of Common
Stock as a dividend, stock repurchase, by way
of return of capital
or otherwise (including any dividend or distribution to the Borrower's shareholders
in cash or shares (or rights to acquire
shares) of capital stock of a subsidiary (i.e., a spin-off)) (a "Distribution"),
then the Holder of this Note shall be entitled, upon any conversion of this Note after
the date of record for determining shareholders entitled to such Distribution,
to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock
issuable upon such conversion had such Holder been the holder of such shares of Common
Stock on the record date for the determination
of shareholders entitled to such Distribution.
(d)
Notice of Adjustments.
Upon the occurrence
of each adjustment
or readjustment of the
Conversion Price as
a result of the events
described in this Section 1.6, the Borrower,
at its expense, shall promptly compute
such adjustment or readjustment and prepare and furnish to the Holder of a
certificate setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Borrower shall, upon the
written request at any time of the Holder,
furnish to such Holder a like certificate setting forth
(i) such adjustment or readjustment,
(ii) the Conversion Price
at the time in effect and (iii) the
number of shares of Common Stock and
the amount, if any, of other securities
or property which at the time would be received upon conversion of the Note.
1.7
Status as Shareholder.
Upon submission of a
Notice of Conversion
by a Holder, (i)
the shares covered
thereby shall be deemed converted
into shares of Common Stock and (ii) the Holder's rights as a Holder
of such converted portion of this
Note shall cease and terminate, excepting only the right to receive certificates
for such shares of Common Stock and to any remedies provided herein or otherwise available
at law or in equity
to such Holder because of a failure by
the Borrower to comply with the terms of
this Note. Notwithstanding the foregoing, if a Holder has not received certificates
for all shares of Common Stock prior to the tenth (10th) business day after the expiration of
the Deadline with respect to a conversion
of any portion of this Note for any
reason, then (unless the Holder otherwise elects to retain its
status as a holder of Common Stock
by so notifying the
Borrower) the Holder shall regain the rights of a
Holder of this Note with respect to
such unconverted portions of this Note
and the Borrower shall, as soon as practicable, return such unconverted Note to the
Holder or, if the Note has not been surrendered, adjust its records
to reflect that such portion of this Note
has not been converted. In all cases,
the Holder shall retain all of its rights
and remedies (including, without limitation, (i) the right to receive Conversion
Default Payments pursuant to Section 1.3
to the extent required thereby for such Conversion
Default and any subsequent Conversion
Default and (ii) the right to have the
Conversion Price with respect
to subsequent conversions
determined in accordance with
Section 1.3) for the Borrower's
failure to convert
this Note.
1.8
Prepayment. Notwithstanding anything
to the contrary
contained in this
Note, the Borrower shall
have the right,
exercisable on not
less than ten (10)
Trading Days prior written notice to the Holder
of the Note to prepay the outstanding Note (principal and accrued interest),
in full or in part. Notwithstanding the
preceding sentence, the Holder shall have the opportunity to convert the outstanding
principal and interest on the Note pursuant to this Agreement at any time prior to payment by the Borrower on such principal and
interest.
ARTICLE
II
EVENTS
OF DEFAULT
If
any of the
following events of
default (each, an
"Event of
Default") shall
occur:
2.1
Failure to Pay
Principal or Interest.
The Borrower fails
to pay the principal hereof
or interest thereon when
due on this
Note, whether at
maturity, upon acceleration or otherwise.
2.2
Conversion and the
Shares. The Borrower
fails to issue
shares of Common Stock
to the Holder (or
announces or threatens in writing
that it will not honor its obligation
to do so) upon exercise by the Holder of the
conversion rights of the Holder in accordance
with the terms of this Note, fails
to transfer or cause its transfer agent
to transfer (issue)(electronically or in certificated form)
any certificate for shares
of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower
directs its transfer agent not
to transfer or delays, impairs, and/or hinders
its transfer agent in transferring (or
issuing)(electronically or in certificated form) any certificate
for shares of Common Stock to
be issued to the Holder upon conversion of
or otherwise pursuant to this Note as and when required by this Note, or fails to
remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any shares of
Common Stock issued to the
Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does
not intend to honor the obligations described in this paragraph) and any such
failure shall continue uncured (or any written announcement, statement or threat not
to honor its obligations shall not be rescinded in
writing) for three (3) business
days after the Holder shall have delivered a Notice
of Conversion.
2.3
Breach of Covenants.
The Borrower breaches any material
covenant or other material
term or condition
contained in this
Note and such
breach continues for a period of ten (10) days after written notice thereof
to the Borrower from the Holder.
2.4
Breach of Representations
and Warranties. Any representation
or warranty of the
Borrower made herein
or in any
agreement, statement or certificate
given in writing pursuant hereto or in
connection herewith, shall be false
or misleading in any material respect
when made and the breach of which has (or with
the passage of time will have)
a material adverse effect on the rights of
the Holder with
respect to this
Note.
2.5
Receiver or Trustee.
The Borrower or
any subsidiary of
the Borrower shall make
an assignment for
the benefit of
creditors, or apply for or consent
to the appointment of a receiver or
trustee for it
or for a substantial part of its
property or business, or such a receiver
or trustee shall otherwise be appointed.
2.6
Judgments. Any money
judgment, writ or
similar process shall
be entered or filed
against the Borrower
or any subsidiary
of the Borrower or
any of its property or other
assets for more than $50,000, and
shall remain unvacated, unbonded or unstayed for a period of twenty (20) days
unless otherwise consented to by the Holder, which consent will not be unreasonably
withheld.
2.7
Bankruptcy. Bankruptcy, insolvency,
reorganization or liquidation proceedings
or other proceedings, voluntary
or involuntary, for relief
under any bankruptcy
law or any
law for the relief
of debtors shall be instituted
by or against the Borrower or
any subsidiary of
the Borrower.
2.8
Delisting of Common
Stock. The Borrower
shall fail to
maintain the listing
of the Common Stock
on at least
one of the
OTCBB or an
equivalent replacement exchange, the Nasdaq
National Market, the Nasdaq SmallCap Market, the New York
Stock Exchange, or the American Stock Exchange.
2.9
Failure to Comply
with the Exchange
Act. The Borrower
shall fail to
comply with the reporting
requirements of the
Exchange Act; and/or
the Borrower shall cease
to be subject to the reporting requirements
of the Exchange Act.
2.10
Liquidation. Any dissolution,
liquidation, or winding
up of Borrower
or any substantial portion
of its business.
2.11
Cessation of Operations.
Any cessation of operations
by Borrower or
Borrower admits it is
otherwise generally unable
to pay its
debts as such debts
become due, provided, however, that any disclosure of the Borrower's ability
to continue as a "going concern" shall not be an admission that the Borrower cannot
pay its debts as they become due.
2.12
Maintenance of Assets.
The failure by
Borrower to maintain
any material intellectual property rights,
personal, real property or
other assets which are necessary to conduct
its business (whether now or in the
future).
2.13
Financial Statement Restatement.
The restatement of any
financial statements filed by
the Borrower with
the Securities and
Exchange Commission ("SEC")
for any date or period from two years prior to
the Issue Date of this Note and until this
Note is no longer outstanding, if the result of such restatement
would, by comparison to
the unrestated financial statement,
have constituted a material adverse effect
on the rights of the Holder with respect
to this Note.
2.14
Replacement of Transfer
Agent. In the
event that the
Borrower proposes to replace
its transfer agent,
the Borrower fails to
provide, prior to
the effective date of such replacement,
a fully executed Irrevocable Transfer Agent Instructions in a form attached hereto as Exhibit C (including but not limited to
the provision to irrevocably reserve shares of Common Stock in the Reserved
Amount) signed by the successor
transfer agent to Borrower
and the Borrower.
2.15
Failure to Accept
Opinion of Holder.
Borrower's failure to
accept the opinion of
counsel provided by
the Holder for
no good cause with
respect to the transfer of Securities
pursuant to an exemption from registration, such as Rule 144 or Regulation
S.
2.16
Holder's Rights upon
Event of Default.
Upon the occurrence
and continuance of any
Event of Default,
Holder in its
sole and absolute
discretion shall have the
right to declare all unpaid interest
and principal immediately due
and payable and exercise all
other legal rights in connection therewith,
without presentment, demand, or protest, all
of which are hereby expressly waived.
ARTICLE
III
MISCELLANEOUS
3.1
Failure or Indulgence
Not Waiver. No
failure or delay
on the part
of the Holder in
the exercise of
any power, right
or privilege hereunder shall operate as a waiver
thereof, nor shall any single
or partial exercise
of any such power, right or
privilege preclude other or
further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise available.
3.2
Notices. All notices,
demands, requests, consents,
approvals, and other communications
required or permitted hereunder
shall be in writing
and, unless otherwise specified
herein, shall be (i) personally served,
(ii) deposited in the
mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable
air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as
such party shall have specified most
recently by written notice. Any notice or other communication required or permitted
to be given hereunder shall be deemed effective (a) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by
the transmitting facsimile machine, at the address or number designated below
(if delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following
the date of mailing by express
courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications
shall be:
If
to
the Borrower,
to: Well Power,
Inc.
Attn:
Dan M. Patience
11111
Katy Freeway, Suite
# 910
Houston,
TX 77079
If
to
the Holder:
Melvyn Maller
17402
Citronia Street
Northridge,
CA 91325
3.3
Amendments. This Note
and any provision
hereof may only
be amended by
an instrument in writing
signed by the Borrower
and the Holder. The
term "Note" and all reference
thereto, as used throughout this instrument, shall
mean this instrument as originally
executed, or if later amended or supplemented,
then as so amended
or supplemented.
3.4
Assignability. This Note
shall be binding
upon the Borrower
and its successors and
assigns, and shall
inure to be
the benefit of
the Holder and its successors
and assigns. Each transferee of this Note
must be an "accredited investor" (as
defined in Rule 501(a) of the 1933
Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged
as collateral in connection with a bona fide
margin account or other lending arrangement.
3.5
Cost of Collection.
If default is
made in the
payment of this
Note, the Borrower shall
pay the Holder hereof costs of collection,
including reasonable attorneys' fees.
3.6
Governing Law. This
Note shall be
governed by and
construed in accordance with
the laws of
the State of
California without regard
to principles of
conflicts of laws. Any action brought
by either party against the other concerning the transactions contemplated
by this Note shall be brought only in the state courts of California
or in the federal courts located in the state and county of Los Angeles. The parties to this Note hereby irrevocably waive
any objection to jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based
on lack of jurisdiction or venue or based upon forum non conveniens. The
Borrower and Holder waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event
that any provision of this Note or any
other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed
inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement. Each
party hereby irrevocably waives personal service of process and consents to
process being served in
any suit, action or proceeding
in connection with this Agreement
or any other Transaction Document by mailing
a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery)
to such party at the address in
effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein
shall be deemed to limit in any
way any right to serve process in any
other manner permitted by law.
3.7
Certain Amounts. Whenever
pursuant to this
Note the Borrower
is required to pay
an amount in
excess of the
outstanding principal amount (or the portion thereof
required to be paid at that time) plus accrued
and unpaid interest plus in the
case of Default, interest on such interest, the Borrower and the
Holder agree that the actual damages to the
Holder from the receipt of cash payment on this Note may
be difficult to determine and the amount to
be so paid by the Borrower represents
stipulated damages and not a penalty and
is intended to compensate the
Holder in part for loss of the opportunity to
convert this Note and to
earn a return from the sale of
shares of Common Stock acquired upon conversion
of this Note at a price in excess of the price paid for such
shares pursuant to this Note. The Borrower and the Holder
hereby agree that such amount of stipulated damages is not plainly
disproportionate to the possible
loss to the Holder from the receipt of
a cash payment without
the opportunity to convert this Note into shares of Common
Stock.
3.8
Preservation of Personal
Information. To the
extent not in
violation of applicable laws,
Borrower shall take
all reasonable steps to protect the personal information
of Holder (such as Holder's name and address) from publicity and shall refrain from including such information in filings
with the SEC. In any case, Borrower shall inform Holder (or Holder's representative) prior to any required publishing
of Holder's personal information.
3.9
Notice of Corporate
Events. Except as
otherwise provided below,
the Holder of this
Note shall have
no rights as a
Holder of Common Stock unless and only to the extent
that it converts this Note into
Common Stock.
3.10
Remedies. The Borrower
acknowledges that a
breach by it
of its obligations hereunder
will cause irreparable harm
to the Holder, by vitiating the intent and
purpose of the transaction contemplated
hereby. Accordingly, the Borrower acknowledges that the
remedy at law for a breach of its obligations under this Note will be inadequate
and agrees, in the event of a breach or threatened breach by the Borrower of the provisions
of this Note, that the Holder shall be entitled, in addition to all
other available remedies at law
or in equity, and in addition to the penalties
assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this
Note and to enforce specifically
the terms and provisions thereof,
without the necessity of showing economic loss and without any bond or other
security being required.
(Signature
page immediately follows)
IN
WITNESS WHEREOF, Borrower
has caused this
Note to be
signed in its
name by its duly
authorized officer as
of Issue Date.
"BORROWER":
Well
Power, Inc.
a
Nevada corporation
By:
/s/ Dan Patience
Name:
Dan Patience
Title:
President