TABLE OF CONTENTS
Page
ARTICLE I Purchase and Sale of Common Stock and Warrants ...................................................1
Section 1.1
Purchase and Sale of Common Stock and Warrants....................................1
Section 1.2
Purchase Price and Closing..........................................................................1
Section 1.3
Warrants
.......................................................................................................1
Section 1.4 Warrant Shares.............................................................................................2
ARTICLE II Representations and Warranties
.................................................................................2
Section 2.1
Representations and Warranties of the Company
........................................2
Section 2.2
Representations and Warranties of the Purchasers
....................................12
ARTICLE III Covenants................................................................................................................14
Section 3.1
Securities Compliance ...............................................................................14
Section 3.2
Registration and Listing
.............................................................................14
Section 3.3
Inspection Rights .......................................................................................14
Section 3.4
Compliance with Laws ..............................................................................15
Section 3.5
Keeping of Records and Books of Account...............................................15
Section 3.6
Reporting Requirements
............................................................................15
Section 3.7
Other Agreements
......................................................................................15
Section 3.8
Reservation of Shares ................................................................................15
Section 3.9
Disclosure of Transactions and Other Material Information
.....................16
Section 3.10 Delivery of Securities ................................................................................16
Section 3.11 [Intentionally Omitted]
..............................................................................16
Section 3.12 Subsequent Financings...............................................................................16
Section 3.13 Beneficial Ownership Restrictions. ...........................................................18
ARTICLE IV Conditions
...............................................................................................................19
Section 4.1
Conditions Precedent to the Obligation of the Company to
Close and to Sell the Shares and Warrants.
...............................................19
Section 4.2
Conditions Precedent to the Obligation of the Purchasers to
Close and to Purchase the Shares and the Warrants
..................................20
ARTICLE V Transfer Restrictions and Legends...........................................................................21
Section 5.1
Legends.
.....................................................................................................21
ARTICLE VI Termination.............................................................................................................23
Section 6.1
Termination by Mutual Consent
................................................................23
Section 6.2
Effect of Termination.................................................................................24
ARTICLE VII Indemnification......................................................................................................24
-i-
Table of Contents
(continued)
Page
Section 7.1
General Indemnity
.....................................................................................24
Section 7.2
Indemnification Procedure.........................................................................24
ARTICLE VIII Miscellaneous.......................................................................................................25
Section 8.1
Fees and Expenses.
....................................................................................25
Section 8.2
Specific Enforcement; Consent to Jurisdiction..........................................25
Section 8.3
Entire Agreement; Amendment.
................................................................26
Section 8.4
Notices
.......................................................................................................26
Section 8.5
Waivers
......................................................................................................27
Section 8.6
Headings ....................................................................................................27
Section 8.7
Successors and Assigns..............................................................................27
Section 8.8
No Third Party Beneficiaries.
....................................................................27
Section 8.9
Governing Law
..........................................................................................27
Section 8.10 Surviva
.......................................................................................................28
Section 8.11 Counterparts
...............................................................................................28
Section 8.12 Publicity
.....................................................................................................28
Section 8.13 Severability
................................................................................................28
Section 8.14 Further Assurances.....................................................................................28
Section 8.15 Independent Nature of Purchasers
’
Obligations and Rights
......................28
-ii-
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this
“
Agreement
”
), dated as of
September
16,
2014,
by
and
among
MediJane
Holdings
Inc.,
a
Nevada
corporation
(the
“
Company
”
),
and
the
entities
listed
on
Exhibit
A
hereto
(each,
a
“
Purchaser
”
and
collectively,
the
“
Purchasers
”
), for the purchase and sale by
the Purchasers of shares of the Company
’
s
Common
Stock,
par
value
$0.001
per
share
(the
“
Common
Stock
”
),
and
warrants
to
purchase
shares of Common Stock.
The parties hereto agree as follows:
ARTICLE I
Purchase and Sale of Common Stock and Warrants
Section 1.1
Purchase and Sale of Common Stock and Warrants. Upon the
following
terms
and
conditions,
the
Company
shall
issue
and
sell
to
the
Purchasers,
and
each
Purchaser
shall,
severally
but
not
jointly,
purchase
from
the
Company
(i)
shares
of
Common
Stock
(the
“
Shares
”
),
and
(ii)
warrants
to
purchase
shares
of
Common
Stock
equal
to
200%
of
the
number
of
Shares
to
be
purchased
by
such
Purchaser,
in
substantially
the
form
attached
hereto
as
Exhibit
B
(the
“
Warrants
”
),
in
each
case
as
set
forth
opposite
each
such
Purchaser
’
s
name
on
Exhibit
A
hereto,
at
a
price
per
Share
and
related
Warrants
of
$0.09
for
an
aggregate
purchase
price
to
the
Company
from
all
Purchasers
of
$600,000.00
(the
“
Purchase
Price
”
).
The
Company
and
the
Purchasers
are
executing
and
delivering
this
Agreement
in
accordance
with
and
in
reliance
upon
the
exemption
from
securities
registration
afforded
by
Section
4(2)
of
the
U.S.
Securities
Act
of
1933,
as
amended,
and
the
rules
and
regulations
promulgated
thereunder
(the
“
Securities
Act
”
),
including
Regulation
D
(
“
Regulation
D
”
),
and/or
upon
such
other
exemption
from
the
registration
requirements
of
the
Securities
Act
as
may
be
available
with
respect to any or all of the investments to be made hereunder.
Section 1.2
Purchase
Price
and
Closing.
The
Company agrees
to
issue
and
sell
to
the
Purchasers
and,
in
consideration
of
and
in
express
reliance
upon
the
representations,
warranties, covenants, terms and conditions of this Agreement, the Purchasers, severally but not
jointly,
agree
to
purchase
the
number
of
Shares
and
Warrants
set
forth
opposite
their
respective
names
on
Exhibit
A.
The
closing
of
the
purchase
and
sale
of
the
Shares
and
Warrants
to
be
acquired
by
the
Purchasers
from
the
Company
under
this
Agreement
shall
take
place
remotely
via
the
exchange
of
documents
and
signatures
by
telecopier
or
e-mail
(the
“
Closing
”
)
at
10:00
a.m.,
Mountain
Time
(i)
on
or
before
September
16,
2014,
provided,
that
all
of
the
conditions
set forth in Article IV hereof and applicable to the Closing shall have been fulfilled or waived in
accordance
herewith,
or
(ii)
at
such
other
time
and
place
or
on
such
date
as
the
Purchasers
and
the
Company may agree
upon
(the
“
Closing
Date
”
).
The entire Purchase
Price shall
be
paid
by
the Purchasers in cash, by wire transfer or in readily available funds.
Section 1.3
Warrants.
At
the
Closing,
the
Company
shall
issue
to
each
Purchaser such number of Warrants to purchase shares of Common Stock as is set forth
opposite
such
Purchaser
’
s
name
on
Exhibit
A
hereto.
The Warrants
shall
be exercisable
for five
(5) years from the date of issuance and shall have an initial exercise price equal to $0.20.
Section 1.4
Warrant Shares. The Company
has authorized and has reserved
and
covenants
to
continue
to
reserve,
free
of
preemptive
rights
and
other
similar
contractual
rights
of
stockholders,
a
number
of
its
authorized
but
unissued
shares
of
Common
Stock
equal
to
the
aggregate
number
of
shares
of
Common
Stock
necessary
to
effect
the
exercise
of
the
Warrants. Any
shares
of
Common
Stock
issuable
upon
exercise
of
the Warrants (and
such
shares
when
issued)
are
herein
referred
to
as
the
“
Warrant
Shares
”
.
The
Shares,
the
Warrants
and the Warrant Shares are sometimes collectively referred to herein as the
“
Securities
”
.
ARTICLE II
Representations and Warranties
Section 2.1
Representations
and
Warranties
of
the
Company.
In
order
to
induce
the
Purchasers
to
enter
into
this
Agreement
and
to
purchase
the
Shares
and
the
Warrants,
the Company hereby makes the following representations and warranties to the Purchasers:
(a)
Organization,
Good
Standing
and
Power.
The
Company
is
a
corporation
duly
incorporated,
validly
existing
and
in
good
standing
under
the
laws
of
the
State
of
Nevada
and
has
the
requisite
corporate
power
to
own,
lease
and
operate
its
properties
and
assets
and
to
conduct its business as
it is now being conducted.
The Company does not
have any
Subsidiaries
(as defined in Section 2.1(g)) or own securities of any kind in any other entity, except as
disclosed in the Commission Documents (as defined in Section 2.1(f)) or as set forth on Schedule
2.1(g)
hereto.
The
Company
and
each
such
Subsidiary
is
duly
qualified
as
a
foreign
corporation
to
do
business
and
is
in
good
standing
in
every
jurisdiction
in
which
the
nature
of
the
business
conducted
or
property
owned
by
it
makes
such
qualification
necessary,
except
for
any
jurisdiction(s)
(alone
or
in
the
aggregate)
in
which
the
failure
to
be
so
qualified
will
not
have
a
Material
Adverse
Effect.
For
the
purposes
of
this
Agreement,
“
Material
Adverse
Effect
”
means
any
adverse
effect
on
the
business,
operations,
properties,
prospects
or
financial
condition
of
the
Company
or
its
Subsidiaries
and
which
is
material
to
such
entity
or
other
entities
controlling
or
controlled by such entity or which is likely to materially hinder the performance by the Company
of
its
material
obligations
hereunder
and
under
the
other
Transaction
Documents
(as
defined
in
Section 2.1(b) hereof).
(b)
Authorization; Enforcement. The Company has the requisite corporate
power
and
authority
to
enter
into
and
perform
this
Agreement,
the
Registration
Rights
Agreement,
the
Warrants
and
the
other
agreements
and
documents
contemplated
hereby
and
thereby
and executed by
the Company
or to which the Company
is party
(collectively, the
“
Transaction
Documents
”
),
and
to
issue
and
sell
the
Shares
and
the
Warrants
in
accordance
with
the terms hereof.
The execution, delivery and performance of the Transaction Documents by the
Company
and
the
consummation
by
it
of
the
transactions
contemplated
thereby
have
been
duly
and
validly
authorized
by
all
necessary
corporate
action,
and,
except
as
set
forth
in
Schedule
2.1(b),
no
further
consent
or
authorization
of
the
Company,
its
Board
of
Directors
or
its
stockholders is required. This Agreement has been duly executed and delivered by the Company.
The
other
Transaction
Documents
will
have
been
duly
executed
and
delivered
by
the
Company
at the Closing. Each of the Transaction Documents constitutes, or shall constitute when executed
and
delivered,
a
valid
and
binding
obligation
of
the
Company
enforceable
against
the
Company
in
accordance
with
its
terms,
except
as
such
enforceability
may
be
limited
by applicable
bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership or similar
-2-
laws
relating
to,
or
affecting
generally
the
enforcement
of,
creditor
’
s
rights
and
remedies
or
by
other equitable principles of general application.
(c)
Capitalization.
The
authorized
capital
stock
of
the
Company
and
the
shares thereof currently issued and outstanding as of
September 8, 2014, are set forth on
Schedule
2.1(c)
hereto.
All
of
the
outstanding
shares
of
the
Company
’
s
Common
Stock
and
any
other security of
the
Company have
been
duly and
validly authorized.
Except
as
disclosed
in
the
Commission
Documents
or
as
set
forth
on
Schedule
2.1(c)
hereto,
no
shares
of
Common
Stock
or
any
other
security
of
the
Company
are
entitled
to
preemptive
rights
or
registration
rights
and
there
are
no
outstanding
options,
warrants,
scrip,
rights
to
subscribe
to,
call
or
commitments
of
any character whatsoever
relating to, or securities
or rights
convertible into,
any shares of capital
stock of the Company.
Furthermore, except as disclosed in the Commission Documents or as set
forth
on
Schedule
2.1(c)
hereto,
there
are
no
contracts,
commitments,
understandings,
or
arrangements
by
which
the
Company
is
or
may
become
bound
to
issue
additional
shares
of
the
capital
stock
of
the
Company
or
options,
securities
or
rights
convertible
into
shares
of
capital
stock
of
the
Company.
Except
for
customary transfer
restrictions
contained
in
agreements
entered
into
by
the
Company
in
order
to
sell
restricted
securities
or
as
provided
on
Schedule
2.1(c) hereto, the Company is not a party
to or bound by any agreement or understanding
granting registration or anti-dilution rights to any individual, corporation, partnership, trust,
incorporated
or
unincorporated
association,
joint
venture,
limited
liability
company,
joint
stock
company,
government
(or
an
agency
or
political
subdivision
thereof)
or
other
entity
of
any
kind
(a
“
Person
”
)
with
respect
to
any
of
its
equity
or
debt
securities.
Except
as
set
forth
on
Schedule
2.1(c),
the
Company
is
not
a
party
to,
and
it
has
no
knowledge
of,
any
agreement
or
understanding restricting the voting or transfer of any shares of the capital stock of the Company.
Except
as
set
forth
on
Schedule
2.1(c)
hereto,
the
offer
and
sale
of
all
capital
stock,
convertible
securities,
rights,
warrants,
or
options
of
the
Company issued
prior to
the
Closing complied
with
all
applicable
federal
and
state
securities
laws,
and
no
holder
of
such
securities
has
a
right
of
rescission or claim for damages with respect thereto which could have a Material Adverse Effect.
The
Company
has
furnished
or
made
available
to
the
Purchasers
true
and
correct
copies
of
the
Company
’
s
Articles
of
Incorporation
as
in
effect
on
the
date
hereof
(the
“
Articles
”
),
and
the
Company
’
s Bylaws as in effect on the date hereof (the
“
Bylaws
”
).
(d)
Issuance
of
Securities.
The
Shares
and
the
Warrants
to
be
issued
at
the
Closing have been duly authorized by all necessary corporate action and, when paid for or issued
in
accordance
with
the
terms
hereof,
the
Shares
shall
be
validly
issued
and
outstanding,
fully
paid
and
nonassessable
and
free
and
clear
of
all
liens,
encumbrances
and
rights
of
refusal
of
any
kind
and
the
holders
shall
be
entitled
to
all
rights
accorded
to
a
holder
of
Common
Stock.
When
the Warrant Shares are issued and paid for in accordance with the terms of this Agreement and as
set
forth
in
the
Warrants,
such
shares
will
be
duly
authorized
by
all
necessary
corporate
action
and
validly
issued
and
outstanding,
fully
paid
and
nonassessable,
free
and
clear
of
all
liens,
encumbrances
and
rights
of
refusal
of
any
kind
and
the
holders
shall
be
entitled
to
all
rights
accorded to a holder of Common Stock.
(e)
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
do
not
and
will
not
(i)
violate
any
provision
of
the
Articles
or
Bylaws
or
any
Subsidiary
’
s
comparable
charter
documents,
(ii)
conflict
with,
or
constitute
a
default (or an event which with notice or lapse of time or both would become a default) under, or
-3-
give
to
others
any
rights
of
termination,
amendment,
acceleration
or
cancellation
of,
any
agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or
obligation
to
which
the
Company
or
any
of
its
Subsidiaries
is
a
party
or
by
which
the
Company
or
any
of
its
Subsidiaries
’
respective
properties
or
assets
are
bound,
(iii)
create
or
impose
a
lien,
mortgage,
security interest,
charge
or
encumbrance
of
any nature
on
any property or
asset
of
the
Company
or any
of its Subsidiaries under any
agreement or any
commitment to which the
Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries
is
bound
or
by
which
any
of
their
respective
properties
or
assets
are
bound,
or
(iv)
result
in
a
violation of any federal,
state, local
or
foreign
statute, rule,
regulation, order, judgment or decree
(including federal
and
state
securities
laws
and
regulations)
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,
except,
in
all
cases
other
than
violations
pursuant
to
clauses
(i)
or
(iv)
(with
respect to federal and
state
securities
laws)
above,
for
such conflicts, defaults,
terminations,
amendments, acceleration, cancellations and violations as would not, individually or in the
aggregate,
have
a
Material
Adverse
Effect.
The
business
of
the
Company
and
its
Subsidiaries
is
not
being
conducted
in
violation
of
any
laws,
ordinances
or
regulations
of
any
governmental
entity,
except
for
possible
violations
which
singularly
or
in
the
aggregate
do
not
and
will
not
have
a
Material
Adverse
Effect.
Neither
the
Company
nor
any
of
its
Subsidiaries
is
required
under
federal,
state,
foreign
or
local
law,
rule
or
regulation
to
obtain
any
consent,
authorization
or
order
of,
or
make
any
filing
or
registration
with,
any
court
or
governmental
agency
in
order
for
it
to
execute,
deliver
or
perform
any
of
its
obligations
under
the
Transaction
Documents
or
issue and sell the Securities in accordance with the terms hereof or thereof (other than any filings
which
may
be
required
to
be
made
by
the
Company
with
the
Securities
and
Exchange
Commission
(the
“
Commission
”
)
and/or
the
OTC
Markets
Group
prior
to
or
subsequent
to
the
Closing,
or
state
securities
administrators
prior
to
or
subsequent
to
the
Closing,
or
any
registration statement which may be filed pursuant hereto or thereto).
(f)
Commission Documents; Financial Statements. The Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended
(the
“
Exchange
Act
”
),
and,
except
as
disclosed
on
Schedule
2.1(f)
hereto,
the
Company
has
timely filed
all
reports,
schedules,
forms,
statements
and
other documents
required
to
be
filed
by
it
with
the
Commission
pursuant
to
the
reporting
requirements
of
the
Exchange
Act,
including
material
filed
pursuant
to
Section
13(a)
or
15(d)
of
the
Exchange
Act
(all
of
the
foregoing,
including
filings
incorporated
by
reference
therein,
being
referred
to
herein
as
the
“
Commission
Documents
”
).
The
Company
has
delivered
or
made
available
(through
the
SEC
EDGAR
website) to the Purchasers true and complete copies of the Commission Documents filed with the
Commission
since
June
3,
2010.
The
Company
has
not
provided
to
the
Purchasers
any material
non-public
information
or
other
information
which,
according
to
applicable
law,
rule
or
regulation,
should
have
been
disclosed
publicly
by
the
Company
but
which
has
not
been
so
disclosed,
other
than
with
respect
to
the
transactions
contemplated
by
this
Agreement. At
the
time
of
its
filing,
the
Company
’
s
Quarterly
Report
on
Form
10-Q
for
the
fiscal
quarter
ended
May
31,
2014
(the
“
Form
10-Q
”
)
complied
in
all
material
respects
with
the
requirements
of
the
Exchange
Act
and
the
rules
and
regulations
of
the
Commission
promulgated
thereunder
and
other
federal,
state
and
local
laws,
rules
and
regulations
applicable
to
such
documents,
and
the
Form
10-Q
did
not
contain
any
untrue
statement
of
a
material
fact
or
omitted
to
state
a
material
fact
required
to
be
stated
therein
or
necessary in
order
to
make
the
statements
therein,
in
light
of
the
circumstances
under
which
they
were
made,
not
misleading.
At
the
time
of
its
filing,
the
-4-
Company
’
s Annual Report on Form 10-K for the fiscal year ended February 28, 2014 (the
“
Form
10-K
”
) complied in all material respects with the requirements of the Exchange Act and the rules
and
regulations
of
the
Commission
promulgated
thereunder
and
other
federal,
state
and
local
laws,
rules
and
regulations
applicable
to
such
documents,
and,
at
the
time
of
its
filing,
the
Form
10-K
did
not
contain
any
untrue
statement
of
a
material
fact
or
omitted
to
state
a
material
fact
required
to
be
stated
therein
or
necessary
in
order
to
make
the
statements
therein,
in
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
Commission
Documents
complied
as
to
form in all material respects with applicable accounting requirements and the published rules and
regulations
of
the
Commission
or
other
applicable
rules
and
regulations
with
respect
thereto.
Such
financial
statements
have
been
prepared
in
accordance
with
generally
accepted
accounting
principles (
“
GAAP
”
) applied on a consistent basis 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
not
include
footnotes
or
may be
condensed
or
summary
statements),
and
fairly
present
in
all
material
respects
the
financial
position
of
the
Company and
its Subsidiaries as of the dates thereof and the
results of operations and cash
flows
for the periods then ended (subject, in the case of
unaudited statements, to
normal
year-end
audit
adjustments).
(g)
Subsidiaries. Schedule 2.1(g) hereto sets forth
each Subsidiary of the
Company,
showing
the
jurisdiction
of
its
incorporation
or
organization
and
showing
the
percentage of each
Person
’
s ownership of the outstanding stock or other interests of such
Subsidiary.
For
the
purposes
of
this
Agreement,
“
Subsidiary
”
shall
mean
any Person
of
which
at
least a majority of the securities or other ownership interest having ordinary voting power
(absolutely
or
contingently)
for
the
election
of
directors
or
other Persons
performing
similar
functions
are
at
the
time
owned
directly
or
indirectly
by
the
Company
and/or
any
of
its
other
Subsidiaries.
All
of
the
outstanding
shares
of
capital
stock
of
each
Subsidiary
have
been
duly
authorized
and
validly
issued,
and
are
fully
paid
and
nonassessable.
There
are
no
outstanding
preemptive,
conversion
or
other
rights,
options,
warrants
or
agreements
granted
or
issued
by
or
binding upon
any Subsidiary for the
purchase or
acquisition of any shares
of capital stock of
any
Subsidiary
or
any
other
securities
convertible
into,
exchangeable
for
or
evidencing
the
rights
to
subscribe for any shares of such capital stock. Neither the Company nor any Subsidiary is subject
to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any
shares
of
the
capital
stock
of
any
Subsidiary
or
any
convertible
securities,
rights,
warrants
or
options
of
the
type
described
in
the
preceding
sentence
except
as
set
forth
on
Schedule
2.1(g)
hereto.
Neither
the
Company
nor
any
Subsidiary
is
party
to,
nor
has
any
knowledge
of,
any
agreement restricting the voting or transfer of any shares of the capital stock of any Subsidiary.
(h)
No
Material
Adverse
Change.
Since
May
31,
2014,
the
Company
has
not
experienced
or
suffered
any
Material
Adverse
Effect,
except
for
operating
losses
incurred
in
the
ordinary course of business.
(i)
No Undisclosed Liabilities. Except as disclosed on Schedule 2.1(i) hereto,
neither
the
Company
nor
any
of
its
Subsidiaries
has
any
liabilities,
obligations,
claims
or
losses
(whether liquidated or
unliquidated, secured or unsecured, absolute, accrued,
contingent or
otherwise)
other
than
those
set
forth
on
the
balance
sheet
included
in
the
Form
10-Q
or
incurred
in
the
ordinary
course
of
the
Company
’
s
or
its
Subsidiaries
respective
businesses
since
May
31,
-5-
2014,
and
which,
individually
or
in
the
aggregate,
do
not
or
would
not
have
a
Material
Adverse
Effect on the Company or its Subsidiaries.
(j)
No
Undisclosed
Events
or
Circumstances.
Since
May
31,
2014,
except
as
disclosed on Schedule 2.1(j) hereto, no
event
or circumstance has occurred
or
exists with respect
to
the
Company
or
its
Subsidiaries
or
their
respective
businesses,
properties,
prospects,
operations or
financial condition, which, under applicable law,
rule or
regulation, requires
public
disclosure
or
announcement
by
the
Company
but
which
has
not
been
so
publicly
announced
or
disclosed.
(k)
Indebtedness.
Schedule
2.1(k)
hereto
sets
forth
as
of
the
date
hereof
all
outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which
the
Company
or
any
Subsidiary
has
commitments.
For
purposes
of
this
Agreement:
(x)
“
Indebtedness
”
of
any
Person
means,
without
duplication
(A)
any
indebtedness
for
borrowed
money in
excess
of
$100,000,
(B)
any obligations
issued,
undertaken
or
assumed
as
the
deferred
purchase
price
of
property
or
services
(other
than
trade
payables
entered
into
in
the
ordinary
course
of
business)
in
excess
of
$100,000,
(C)
all
reimbursement
or
payment
obligations
with
respect to letters of credit, surety bonds and other similar instruments, (D) any obligations
evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses, (E) any
indebtedness
in
excess
of
$100,000
created
or
arising
under
any
conditional
sale
or
other
title
retention agreement, or incurred as financing, in either case with respect to any property or assets
acquired
with
the
proceeds
of
such
indebtedness
(even
though
the
rights
and
remedies
of
the
seller
or
bank
under
such
agreement
in
the
event
of
default
are
limited
to
repossession
or
sale
of
such
property),
(F)
all
monetary
obligations
under
any
leasing
or
similar
arrangement
which,
in
connection
with
GAAP,
consistently
applied
for
the
periods
covered
thereby,
is
classified
as
a
capital
lease
with
a
present
value
in
excess
of
$100,000,
(G)
all
indebtedness
referred
to
in
clauses
(A)
through
(F)
above
secured
by
(or
for
which
the
holder
of
such
Indebtedness
has
an
existing
right,
contingent
or
otherwise,
to
be
secured
by)
any
mortgage,
lien,
pledge,
charge,
security interest
or
other
encumbrance
upon
or
in
any property or
assets
(including
accounts
and
contract rights) owned by any Person, even though the Person which owns such assets or
property
has
not
assumed
or
become
liable
for
the
payment
of
such
indebtedness,
and
(H)
all
Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to
in
clauses
(A)
through
(G)
above;
and
(y)
“
Contingent
Obligation
”
means,
as
to
any Person,
any
direct
or
indirect
liability,
contingent
or
otherwise,
of
that
Person
with
respect
to
any
indebtedness,
lease,
dividend
or
other
obligation
of
another
Person
if
the
primary
purpose
or
intent of the
Person incurring such liability, or the
primary effect thereof, is to provide assurance
to
the
obligee
of
such
liability that
such
liability will
be paid
or
discharged,
or
that
any
agreements
relating
thereto
will
be
complied
with,
or
that
the
holders
of
such
liability
will
be
protected
(in
whole
or
in
part)
against
loss
with
respect
thereto
in
excess
of
$100,000
due
under
leases
required
to
be
capitalized
in
accordance
with
GAAP.
Except
as
disclosed
on
Schedule
2.1(k), neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(l)
Title
to
Assets.
Each
of
the
Company
and
the
Subsidiaries
has
good
and
marketable
title
to
all
of
its
real
and
personal
property,
free
and
clear
of
any mortgages,
pledges,
charges, liens,
security
interests or
other
encumbrances
of
any
nature whatsoever,
except as
disclosed
in
the
Commission
Documents,
for
those
indicated
on
Schedule
2.1(l)
hereto
or
such
that,
individually
or
in
the
aggregate,
do
not
have
a
Material
Adverse
Effect.
All
leases
to
real
-6-
and personal property of the Company and each of its Subsidiaries are valid and subsisting and in
full force and effect.
(m)
Actions
Pending.
There
is
no
action,
suit,
claim,
investigation,
arbitration,
alternate
dispute
resolution
proceeding
or
other
proceeding
pending
or,
to
the
knowledge
of
the
Company, threatened against the Company or any Subsidiary which questions the validity of this
Agreement
or
any
of
the
other
Transaction
Documents
or
any
of
the
transactions
contemplated
hereby
or
thereby
or
any
action
taken
or
to
be
taken
pursuant
hereto
or
thereto.
Except
as
set
forth
on
Schedule
2.1(m)
hereto,
there
is
no
action,
suit,
claim,
investigation,
arbitration,
alternate
dispute
resolution
proceeding
or
other
proceeding
pending
or,
to
the
knowledge
of
the
Company,
threatened
against
or
involving
the
Company,
any
Subsidiary
or
any
of
their
respective
properties
or
assets,
which
individually
or
in
the
aggregate,
would
have
a
Material
Adverse
Effect.
There
are
no
outstanding
orders,
judgments,
injunctions,
awards
or
decrees
of
any
court,
arbitrator
or
governmental
or
regulatory
body against
the
Company or
any Subsidiary
or
any
officers
or
directors
of
the
Company
or
any
Subsidiary
in
their
capacities
as
such,
which
individually, or in the aggregate, would have a Material Adverse Effect.
(n)
Compliance with Law.
The business of the Company and the Subsidiaries
has
been
and
is
presently
being
conducted
in
accordance
with
all
applicable
federal,
state
and
local governmental laws, rules, regulations and ordinances, except as set forth in the Commission
Documents or on Schedule 2.1(n) hereto or such that, individually
or in the aggregate, the
noncompliance
therewith
would
not
have
a
Material
Adverse
Effect.
The
Company
and
each
of
its
Subsidiaries
have
all
franchises,
permits,
licenses,
consents
and
other
governmental
or
regulatory
authorizations
and
approvals
necessary
for
the
conduct
of
its
business
as
now
being
conducted
by
it
unless
the
failure
to
possess
such
franchises,
permits,
licenses,
consents
and
other
governmental
or
regulatory
authorizations
and
approvals,
individually
or
in
the
aggregate,
could not reasonably be expected to have a Material Adverse Effect.
(o)
Taxes. Except
as
set
forth
on
Schedule
2.1(o)
hereto,
the
Company
and
each
of
the
Subsidiaries
has
accurately
prepared
and
filed
all
federal,
state
and
other
tax
returns
required
by law
to
be
filed
by it,
has
paid
or
made
provisions
for the
payment
of
all
taxes
shown
to
be
due
and
all
additional
assessments,
and
adequate
provisions
have
been
and
are
reflected
in
the
financial
statements
of
the
Company
and
the
Subsidiaries
for
all
current
taxes
and
other
charges
to
which
the
Company
or
any Subsidiary
is
subject
and
which
are
not
currently due
and
payable.
Except
as
disclosed
on
Schedule
2.1(o)
hereto,
none
of
the
federal
income
tax
returns
of
the
Company
or
any
Subsidiary
have
been
audited
by
the Internal
Revenue
Service. The
Company has
no
knowledge
of
any
additional
assessments,
adjustments
or
contingent
tax
liability
(whether federal or state) of any
nature whatsoever, whether pending or threatened
against the Company or
any Subsidiary for any period, nor of any basis for any such
assessment,
adjustment or contingency.
(p)
Certain Fees.
Except
for Moody Capital Solutions,
Inc., the
Company has
not
employed
any
broker
or
finder
or
incurred
any
liability
for
any
brokerage
or
investment
banking fees,
commissions,
finders
’
structuring fees,
financial
advisory fees
or
other similar
fees
in connection with the Transaction Documents.
(q)
Disclosure.
To
the
best
of
the
Company
’
s
knowledge,
neither
this
Agreement
or
the
Schedules
hereto
nor
any
other
documents,
certificates
or
instruments
-7-
furnished to the Purchasers by or on behalf of the Company or any Subsidiary in connection with
the
transactions
contemplated
by
this
Agreement
contain
any
untrue
statement
of
a
material
fact
or
omit
to
state
a
material
fact
necessary
in
order
to
make the
statements
made herein
or
therein,
in the light of the circumstances under which they were made herein or therein, not misleading.
(r)
Intellectual Property.
Except as set forth on Schedule 2.1(r), the Company
and
each
of
the
Subsidiaries
owns
or
possesses
all
the
Proprietary
Rights
owned
by
it
and
have
no
knowledge
that
such
rights
are
in
conflict
with
the
rights
of
others.
As
of
the
date
of
this
Agreement,
neither
the
Company nor
any of
its
Subsidiaries
has
received
any written
notice
that
any
Proprietary
Rights
have
been
declared
unenforceable
or
otherwise
invalid
by
any
court
or
governmental agency. As of the date of this Agreement, there is, to the knowledge of the
Company, no material existing infringement, misuse or misappropriation of any Proprietary
Rights
by
others.
From
May
31,
2014,
to
the
date
of
this
Agreement,
neither
the
Company
nor
any of
its
Subsidiaries
has
received
any written
notice
alleging
that
the
operation
of
the
business
of
the
Company
or
any
of
its
Subsidiaries
infringes
in
any
material
respect
upon
the
intellectual
property
rights
of
others.
“
Proprietary
Rights
”
shall
mean
patents,
trademarks,
domain
names
(whether
or
not
registered)
and
any
patentable
improvements
or
copyrightable
derivative
works
thereof,
websites
and
intellectual
property
rights
relating
thereto,
service
marks,
trade
names,
copyrights, licenses and authorizations, and all rights with respect to the foregoing.
(s)
Environmental
Compliance.
Except
as
disclosed
on Schedule
2.1(s)
hereto,
the
Company
and
each
of
its
Subsidiaries
have
obtained
all
approvals,
authorization,
certificates,
consents,
licenses,
orders
and
permits
or
other
similar
authorizations
of
all
governmental
authorities,
or
from
any
other
Person,
that
are
required
under
any
Environmental
Laws, the absence of which would have a Material Adverse Effect.
“
Environmental
Laws
”
shall
mean
all
applicable
laws
relating
to
the
protection
of
the
environment
including,
without
limitation,
all
requirements
pertaining
to
reporting,
licensing,
permitting,
controlling,
investigating
or
remediating
emissions,
discharges,
releases
or
threatened
releases
of
hazardous
substances,
chemical
substances,
pollutants,
contaminants
or
toxic
substances,
materials
or
wastes,
whether
solid,
liquid
or
gaseous
in
nature,
into
the
air,
surface
water,
groundwater
or
land,
or
relating
to
the
manufacture,
processing,
distribution,
use,
treatment,
storage,
disposal,
transport
or
handling
of
hazardous
substances,
chemical
substances,
pollutants,
contaminants
or
toxic
substances,
material
or
wastes,
whether
solid,
liquid
or
gaseous
in
nature.
Except
as
set
forth on Schedule 2.1(s)
hereto, the
Company has
all necessary governmental approvals
required
under
all
Environmental
Laws
and
used
in
its
business
or
in
the
business
of
any
of
its
Subsidiaries,
except
for
such
instances
as
would
not
individually
or
in
the
aggregate
have
a
Material
Adverse
Effect.
The
Company
and
each
of
its
Subsidiaries
are
also
in
compliance
with
all
other
limitations,
restrictions,
conditions,
standards,
requirements,
schedules
and
timetables
required
or
imposed
under
all
Environmental
Laws.
Except
for
such
instances
as
would
not
individually
or
in
the
aggregate
have
a
Material
Adverse
Effect,
there
are
no
past
or
present
events, conditions, circumstances, incidents, actions or omissions relating to or in any way
affecting
the
Company
or
its
Subsidiaries
that
violate
or
may
violate
any
Environmental
Law
after
the
Closing
or
that
may
give
rise
to
any
Environmental
Liabilities,
or
otherwise
form
the
basis of any claim, action, demand, suit, proceeding, hearing, study or investigation (i) under any
Environmental
Law,
or
(ii)
based
on
or
related
to
the
manufacture,
processing,
distribution,
use,
treatment,
storage
(including,
without
limitation,
underground
storage
tanks),
disposal,
transport
or handling, or the emission, discharge, release or threatened release of any hazardous substance.
-8-
“
Environmental Liabilities
”
means all liabilities of a Person (whether such liabilities are owed by
such
Person
to
governmental
authorities,
third
parties
or
otherwise)
whether
currently
in
existence or arising hereafter which arise under or relate to any Environmental Law.
(t)
Books and Records;
Internal Accounting Controls. The books, records and
documents
of
the
Company
and
its
Subsidiaries
accurately
reflect
in
all
material
respects
the
information relating to the business of the Company and the Subsidiaries, the location and
collection
of
their
assets, and
the
nature
of
all transactions giving
rise to the
obligations
or
accounts
receivable
of
the
Company
or
any
Subsidiary.
The
Company
and
each
of
its
Subsidiaries
maintain
a
system
of
internal
accounting
controls
sufficient,
in
the
judgment
of
the
Company
’
s
board
of
directors,
to
provide
reasonable
assurance
that
(i)
transactions
are
executed
in
accordance
with
management
’
s
general
or
specific
authorizations,
(ii)
transactions
are
recorded
as
necessary
to
permit
preparation
of
financial
statements
in
conformity
with
GAAP
and
to
maintain
asset
accountability,
(iii)
access
to
assets
is
permitted
only
in
accordance
with
management
’
s
general
or
specific
authorization,
and
(iv) the
recorded
accountability for
assets
is
compared
with
the
existing
assets
at
reasonable
intervals
and
appropriate
actions
are
taken
with
respect to any differences.
(u)
Material Agreements. Except for the Transaction Documents or as set
forth on Schedule 2.1(u) hereto, or those that are included as exhibits to the Commission
Documents,
neither
the
Company
nor
any
Subsidiary
is
a
party
to
any
written
or
oral
contract,
instrument,
agreement,
commitment,
obligation,
plan
or
arrangement,
a
copy
of
which
would
be
required
to
be
filed
with
the
Commission
(collectively,
“
Material
Agreements
”
)
if
the
Company
or any Subsidiary were registering securities under the Securities Act. The Company and each of
its Subsidiaries has in all material respects performed all the obligations required to be performed
by
them
to
date
under
the
foregoing
agreements,
have
received
no
notice
of
default
and,
to
the
best
of
the
Company
’
s
knowledge,
are
not
in
default
under
any
Material
Agreement
now
in
effect,
the
result
of
which
could
cause
a
Material
Adverse
Effect.
No
written
or
oral
contract,
instrument,
agreement,
commitment,
obligation,
plan
or
arrangement
of
the
Company
or
of
any
Subsidiary
limits
or
shall
limit
the
payment
of
dividends
on
its
Common
Stock,
except
as
set
forth on Schedule 2.1(u) hereto.
(v)
Transactions
with
Affiliates.
Except
as
disclosed
in
the
Commission
Documents
or
as
set
forth
on
Schedule
2.1(v)
hereto,
there
are
no
loans,
leases,
agreements,
contracts,
royalty
agreements,
management
contracts
or
arrangements
or
other
continuing
transactions
between
(a)
the
Company,
any
Subsidiary
or
any
of
their
respective
customers
or
suppliers, on
the
one
hand,
and
(b)
on
the
other
hand, any
officer, employee, consultant
or
director
of
the
Company,
or
any
of
its
Subsidiaries,
or
any
Person
owning
5%
or
more
of
the
capital
stock
of
the
Company or
any Subsidiary or
any member
of
the
immediate
family of
such
officer,
employee,
consultant,
director
or
5%
or
greater
stockholder
or
any
corporation
or
other
entity controlled by such officer, employee, consultant, director or stockholder.
(w)
Securities Act of 1933.
The Company has complied and will comply with
all
applicable
federal
and
state
securities
laws
in
connection
with
the
offer,
issuance
and
sale
of
the Securities hereunder. Neither the Company nor anyone acting on its behalf, directly or
indirectly,
has
or
will
sell,
offer
to
sell
or
solicit
offers
to
buy
any
of
the
Securities,
or
similar
securities
to,
or
solicit
offers
with
respect
thereto
from,
or
enter
into
any
preliminary
conversations
or
negotiations
relating
thereto
with,
any
Person,
or
has
taken
or
will
take
any
-9-
action so as to bring the issuance and sale of any of the Securities under the registration
provisions
of
the
Securities
Act
and
applicable
state
securities
laws.
Neither
the
Company
nor
any
of
its
affiliates,
nor
any
Person
acting
on
its
or
their
behalf,
has
engaged
in
any
form
of
general
solicitation
or
general
advertising
(within
the
meaning of
Regulation
D
under
the
Securities Act) in connection with the offer or sale of any of the Securities.
(x)
Governmental
Approvals.
Except
as
set
forth
on
Schedule
2.1(x)
hereto,
and
except
for
the
filing
of
any
notice
prior
or
subsequent
to
the
Closing
that
may
be
required
under
applicable
state
and/or
federal
securities
laws
(which
if
required,
shall
be filed
on
a timely
basis),
no
authorization,
consent,
approval,
license,
exemption
of,
filing
or
registration
with
any
court
or
governmental
department,
commission,
board,
bureau,
agency
or
instrumentality,
domestic
or
foreign,
is
or
will
be
necessary
for,
or
in
connection
with,
the
execution
or
delivery
of
the
Shares
and
the
Warrants,
or
for
the
performance
by
the
Company
of
its
obligations
under
the Transaction Documents.
(y)
Employees.
Neither
the
Company
nor
any
Subsidiary
has
any
collective
bargaining arrangements or agreements covering any of its employees.
Except as set forth
in the
Commission
Documents
or
on
Schedule
2.1(y)
hereto,
neither
the
Company
nor
any
Subsidiary
has any
employment contract, agreement regarding proprietary
information, non-competition
agreement,
non-solicitation
agreement,
confidentiality
agreement,
or
any
other
similar
contract
or
restrictive
covenant,
relating
to
the
right
of
any
officer,
employee
or
consultant
to
be
employed or engaged by the Company or such Subsidiary, which contract or agreement is
required to be disclosed in the Commission Documents but which is not so disclosed. Since May
31, 2014,
no
officer,
consultant
or
key
employee
of the
Company
or
any
Subsidiary
whose
termination,
either
individually
or
in
the
aggregate,
could
have
a
Material
Adverse
Effect,
has
terminated
or,
to
the
knowledge
of
the
Company,
has
any
present
intention
of
terminating
his
or
her employment or engagement with the Company or any Subsidiary.
(z)
Absence
of
Certain
Developments.
Except
as
set forth
in
the
Commission
Documents
or
on
Schedule
2.1(z)
hereto,
since
May
31,
2014,
neither
the
Company
nor
any
Subsidiary has:
(i)
issued
any
stock,
bonds
or
other
corporate
securities
or
any
rights,
options or warrants with respect thereto other than under the Company
’
s stock option plans;
(ii)
borrowed
any
amount
or
incurred
or
become
subject
to
any
liabilities
(absolute
or
contingent)
except
current
liabilities
incurred
in
the
ordinary
course
of
business
which
are
comparable
in
nature
and
amount
to
the
current
liabilities
incurred
in
the
ordinary
course
of
business
during
the
comparable
portion
of
its
prior
fiscal
year,
as
adjusted
to
reflect the current nature and volume of the Company
’
s or such Subsidiary
’
s business;
(iii)
discharged
or
satisfied
any
lien
or
encumbrance
or
paid
any
obligation
or
liability
(absolute
or
contingent),
other
than
current
liabilities
paid
in
the
ordinary
course of business;
-10-
(iv)
declared or made any payment or distribution of cash or other
property to stockholders with respect to its stock, or purchased or redeemed, or made any
agreements so to purchase or redeem, any shares of its capital stock;
(v)
sold,
assigned
or
transferred
any
other
tangible
assets,
or
canceled
any debts or claims, except in the ordinary course of business;
(vi)
sold,
assigned
or
transferred
any
patent
rights,
trademarks,
trade
names, copyrights, trade secrets or other intangible assets or intellectual property rights, or
disclosed any proprietary confidential information
to any Person except in the ordinary course of
business or to the Purchasers or their representatives;
(vii)
suffered
any
substantial losses
or
waived any
rights of
material
value,
whether
or
not
in
the
ordinary
course
of
business,
or
suffered
the
loss
of
any
material
amount of prospective business;
(viii) made
any
changes
in
employee
compensation
except
in
the
ordinary course of business and consistent with past practices;
(ix)
made
capital
expenditures
or
commitments
therefor
that
aggregate
in excess of $25,000;
(x)
entered
into
any other transaction
other
than
in
the ordinary course
of
business,
or
entered
into
any
other
material
transaction,
whether
or
not
in
the
ordinary
course
of business;
(xi)
made charitable contributions or pledges in excess of $25,000;
(xii) suffered any material damage, destruction or casualty loss, whether
or not covered by insurance;
(xiii) experienced
any
material
problems
with
labor
or
management
in
connection with the terms and conditions of their employment;
(xiv)
effected any two or more events
of the foregoing kind which in the
aggregate would cause a Material Adverse Effect; or
(xv)
entered
into
an
agreement,
written
or
otherwise,
to
take
any
of
the
foregoing actions.
(aa) Use
of
Proceeds.
Except
as
set
forth
on
Schedule
2.1(aa),
the
proceeds
from
the
sale
of
the
Shares
and
the
Warrants
will
be
used
by
the
Company
for
working
capital
purposes
and,
except
as
set
forth
on
Schedule
2.1(aa),
shall
not
be used
to
repay any outstanding
Indebtedness or any loans to any officer, director, affiliate or insider of the Company.
-11-
(bb)
Public Utility Holding Company Act and Investment Company Act Status.
The
Company
is not a
“
holding
company
”
or
a
“
public
utility
company
”
as
such
terms are
defined
in
the
Public
Utility
Holding
Company
Act
of
1935,
as
amended.
The
Company
is
not,
and
as
a
result
of
and
immediately
upon
Closing
will
not
be,
an
“
investment
company
”
or
a
company
“
controlled
”
by an
“
investment company
”
, within the meaning of the Investment
Company Act of 1940, as amended.
(cc) ERISA. No liability to the Pension Benefit Guaranty Corporation has been
incurred
with
respect
to
any
Plan
by
the
Company
or
any
of
its
Subsidiaries
which
is
or
would
cause a Material Adverse Effect. The execution and delivery of this Agreement and the issue and
sale
of
the
Shares
and
the
Warrants
will
not
involve
any
transaction
which
is
subject
to
the
prohibitions
of
Section
406
of
ERISA
or
in
connection
with
which
a
tax
could
be
imposed
pursuant to Section
4975
of
the Internal Revenue
Code
of
1986, as
amended
(the
“
Code
”
);
provided
that,
if
any Purchaser,
or
any Person
that
owns
a beneficial
interest
in
any Purchaser,
is
an
“
employee
pension
benefit
plan
”
(within
the
meaning of
Section
3(2) of
ERISA)
with
respect
to
which
the
Company
is
a
“
party
in
interest
”
(within
the
meaning
of
Section
3(14)
of
ERISA),
the
requirements
of
Sections
407(d)(5)
and
408(e)
of
ERISA,
if
applicable,
are
met.
As
used
in
this
Section
2.1(cc),
the
term
“
Plan
”
shall
mean
an
“
employee
pension
benefit
plan
”
(as
defined
in Section 3 of ERISA) which is or has been established or maintained, or to which contributions
are
or
have
been
made,
by
the
Company
or
any
Subsidiary
or
by
any
trade
or
business,
whether
or
not
incorporated,
which,
together
with
the
Company
or
any
Subsidiary,
is
under
common
control, as described in Section 414(b) or (c) of the Code.
(dd)
Delisting Notification. The Company has not received a delisting
notification
from
the
OTC
Markets
Group
that
has
not
been
rescinded,
and,
to
its
knowledge,
there
are
no
existing
facts
or
circumstances
that
could
give
rise
to
the
delisting
of
the
Common
Stock from the OTC Markets Group.
(ee) Sarbanes-Oxley Act. The Company
is in compliance with any and all
applicable
requirements
of
the
Sarbanes-Oxley
Act
of
2002
that
are
effective
as
of
the
date
hereof,
and
any
and
all
applicable
rules
and
regulations
promulgated
by
the
Commission
thereunder
that
are
effective
as
of
the
date
hereof,
except
where
such
noncompliance
would
not
have, individually or in the aggregate, a Material Adverse Effect.
Section 2.2
Representations and Warranties of the Purchasers. Each of the
Purchasers
hereby
makes
the
following
representations and
warranties to the
Company
with
respect solely to itself and not with respect to any other Purchaser:
(a)
Organization and Standing of the Purchasers. If such Purchaser is an
entity, such Purchaser is a corporation, limited liability company or partnership duly
incorporated
or
organized,
validly
existing
and
in
good
standing
under
the
laws
of
the
jurisdiction of its incorporation or organization.
(b)
Authorization and Power. Such Purchaser has the requisite power and
authority
to
enter
into
and
perform
the
Transaction
Documents
and
to
purchase
the
Shares
and
the
Warrants
being
sold
to
it
hereunder.
The
execution,
delivery
and
performance
of
the
Transaction Documents by such Purchaser and the consummation by it of the transactions
contemplated
hereby have
been
duly authorized
by
all
necessary corporate
or
partnership
action,
-12-
and
no
further
consent
or
authorization
of
such
Purchaser
or
its
Board
of
Directors
or
Board
of
Managers,
stockholders,
or
partners,
as
the
case
may
be,
is
required.
This
Agreement
has
been
duly
authorized,
executed
and
delivered
by
such
Purchaser.
The
other
Transaction
Documents
constitute, or shall constitute when executed and
delivered, valid and binding obligations of such
Purchaser
enforceable
against
such
Purchaser
in
accordance
with
their
terms,
except
as
such
enforceability may be
limited
by applicable bankruptcy,
insolvency,
reorganization,
moratorium,
liquidation,
conservatorship,
receivership
or
similar
laws
relating
to,
or
affecting
generally
the
enforcement
of,
creditor
’
s
rights
and
remedies
or
by other
equitable
principles
of
general
application.
(c)
Acquisition
for
Investment.
Such
Purchaser
is
purchasing
the
Shares
and
acquiring
the
Warrants
solely
for
its
own
account
for
the
purpose
of
investment
and
not
with
a
view
to
or
for
sale
in
connection
with
the
distribution
thereof.
Such
Purchaser
does
not
have
a
present
intention
to
sell
any
of
the
Securities,
nor
a
present
arrangement
(whether
or
not
legally
binding)
or
intention
to
effect
any distribution
of
any
of
the
Securities
to
or
through
any Person;
provided, however, that by making the representations herein and subject to Section 2.2(e)
below,
such
Purchaser
does
not
agree
to
hold
any
of
the
Securities
for
any
minimum
or
other
specific
term
and
reserves
the
right
to
pledge any of
the
Securities
for margin
purposes
and/or
to
dispose
of
any
of
the
Securities
at
any
time
in
accordance
with
federal
and
state
securities
laws
applicable
to
such
disposition.
Such
Purchaser
acknowledges
that
it
(i)
has
such
knowledge
and
experience in financial and business matters such that such Purchaser is capable of evaluating the
merits and risks of its investment in the Company, (ii) is able to bear the financial risks
associated
with
an
investment
in
the
Securities,
and
(iii)
has
been
given
full
access
to
such
records of the Company and the Subsidiaries and to the officers of the Company and the
Subsidiaries as it has deemed necessary or appropriate to conduct its due diligence investigation.
(d)
Rule
144.
Such
Purchaser
understands
that
the
Securities
must
be
held
indefinitely
unless
such
Securities
are
registered
under
the
Securities
Act
or
an
exemption
from
registration
is
available.
Such
Purchaser
acknowledges
that
it
is
familiar
with
Rule
144
of
the
rules
and
regulations
of
the
Commission,
as
amended,
promulgated
pursuant
to
the
Securities
Act
(
“
Rule
144
”
),
and
that
such
Purchaser
has
been
advised
that
Rule
144
permits
resales
only
under
certain
circumstances.
Such
Purchaser
understands
that
to
the
extent
that
Rule
144
is
not
available,
such
Purchaser
will
be
unable
to
sell
any
Securities
without
either
registration
under
the Securities Act or the existence of another exemption from such registration requirement.
(e)
General.
Such
Purchaser
understands
that
the
Securities
are
being
offered
and
sold
in
reliance
on
a
transactional
exemption
from
the
registration
requirements
of
federal
and
state
securities
laws
and
the
Company is
relying upon
the
truth
and
accuracy of
the
representations, warranties, agreements, acknowledgments and understandings of such Purchaser
set
forth
herein
in
order
to
determine
the
applicability
of
such
exemptions
and
the
suitability
of
such Purchaser to acquire the Securities. Such Purchaser understands that no United States
federal or state
agency or
any government or
governmental agency has passed upon or made any
recommendation or endorsement of the Securities.
(f)
Opportunities
for
Additional
Information.
Such
Purchaser
acknowledges
that
such
Purchaser
has
had
the
opportunity
to
ask
questions
of
and
receive
answers
from,
or
obtain
additional
information
from,
the
executive officers
of
the
Company concerning the
financial
and
other
affairs
of
the
Company,
and
to
the
extent
deemed
necessary
in
light
of
such
-13-
Purchaser
’
s
personal
knowledge
of
the
Company
’
s
affairs,
such
Purchaser
has
asked
such
questions
and
received
answers
to
the
full
satisfaction
of
such
Purchaser,
and
such
Purchaser
desires to invest in the Company.
(g)
No
General
Solicitation.
Such
Purchaser
acknowledges
that
the
Securities
were
not
offered
to
such
Purchaser
by
means
of
any
form
of
general
or
public
solicitation
or
general
advertising,
or
publicly disseminated
advertisements
or
sales
literature,
including
(i)
any
advertisement,
article,
notice
or
other
communication
published
in
any
newspaper,
magazine,
or
similar media, or broadcast over television or radio, or (ii) any seminar or meeting to which such
Purchaser was invited by any of the foregoing means of communications.
(h)
Accredited
Investor.
Such
Purchaser
is
an
accredited
investor
(as
defined
in
Rule
501
of
Regulation
D),
and
such
Purchaser
has
such
experience
in
business
and
financial
matters
that
it
is
capable
of
evaluating
the
merits
and
risks
of
an
investment
in
the
Securities.
Such
Purchaser
acknowledges
that
an
investment
in
the
Securities
is
speculative
and
involves
a
high degree of risk.
ARTICLE III
Covenants
The
Company
covenants
with
each
Purchaser
as
follows,
which
covenants
are
for
the
benefit of each Purchaser and their respective permitted assignees.
Section 3.1
Securities Compliance. The Company shall notify the
Commission,
in
accordance
with
its
rules
and
regulations,
of
the
transactions
contemplated
by
any
of
the
Transaction
Documents,
and
shall
take
all
other
necessary
action
and
proceedings
as
may
be
required
and
permitted
by
applicable
law,
rule
and
regulation,
for
the
legal
and
valid
issuance of the Securities to the Purchasers, or their respective subsequent holders.
Section 3.2
Registration and Listing. The Company
will cause its Common
Stock to continue to be registered under Section 12(b) or 12(g) of the Exchange Act, will comply
in all respects with its reporting and filing obligations under the
Exchange Act, will comply with
all
requirements
related
to
any
registration
statement
filed
pursuant
to
this
Agreement,
and
will
not
take
any
action
or
file
any
document
(whether
or
not
permitted
by
the
Securities
Act
or
the
rules promulgated thereunder) to terminate or suspend such registration or to terminate or
suspend
its
reporting
and
filing
obligations
under
the
Exchange
Act
or
Securities
Act,
except
as
permitted herein. The Company shall use its commercially reasonable best efforts to continue the
trading of its Common Stock on one of the OTC Markets Group
’
s marketplaces or any successor
market.
Section 3.3
Inspection
Rights.
In
the
event
the
Registration
Statement
(as
defined in the Registration Rights Agreement) is not effective or has been suspended, and subject
to
the
Purchaser
signing
a
mutually
agreeable
Non-Disclosure
Agreement
and
agreeing
not
to
sell
any of
its
securities
if
it
obtains
material
non-public information,
the
Company shall,
subject
to Section 3.9, permit, during normal business hours and upon reasonable request and reasonable
notice,
a
Purchaser
or
any
employees,
agents
or
representatives
thereof,
so
long
as
a
Purchaser
shall
be
obligated
hereunder
to
purchase
the
Shares
or
shall
beneficially own
the
Shares,
or
shall
-14-
own
Warrant
Shares
or
the
Warrants
which,
in
the
aggregate,
represent
more
than
two
percent
(2%) of the total combined voting power of all voting securities then outstanding, to examine and
make
reasonable
copies
of
and
extracts
from
the
records
and
books
of
account
of,
and
visit
and
inspect,
during
the
term
of
the
Warrants,
the
properties,
assets,
operations
and
business
of
the
Company
and
any
Subsidiary,
and
to
discuss
the
affairs,
finances
and
accounts
of
the
Company
and any Subsidiary with any of its officers, consultants, directors, and key employees.
Section 3.4
Compliance with Laws. The Company
shall comply, and cause
each
Subsidiary
to
comply,
with
all applicable
laws,
rules,
regulations
and
orders,
the
noncompliance with which could have a Material Adverse Effect.
Section 3.5
Keeping
of
Records
and
Books
of
Account.
The
Company
shall
keep and cause each Subsidiary to keep adequate records and books of account, in
which
complete
entries will be made
in accordance
with
GAAP consistently
applied,
reflecting
all
financial
transactions
of
the
Company and
its
Subsidiaries,
and
in
which,
for
each
fiscal
year,
all
proper reserves for depreciation, depletion, obsolescence, amortization, taxes, bad debts and
other purposes in connection with its business shall be made.
Section 3.6
Reporting Requirements. The Company, only
to the extend not
included
in
a
Commission
Document
publicly filed
and
available
for
public
access,
shall
furnish
two
(2)
copies
of
the
following
to
each
Purchaser
in
a
timely
manner
so
long
as
that
Purchaser
shall be
obligated
hereunder
to purchase
the
Shares
or
shall beneficially
own
the
Shares or
Warrants,
or
shall
own
Warrant
Shares
which,
in
the
aggregate,
represent
more
than
one
percent
(1%) of the total combined voting power of all voting securities then outstanding:
(a)
Quarterly
Reports
filed
with
the
Commission
on
Form
10-Q
as
soon
as
available,
and
in
any
event
within
forty-five
(45)
days
after
the
end
of
each
of
the
first
three
(3)
fiscal
quarters
of
the
Company,
but
in
no
event
prior
to
the
time
that
such
Reports
are
publicly
filed with the Commission or otherwise made publicly available;
(b)
Annual Reports filed with the Commission on Form 10-K as soon as
available,
and
in any
event within
ninety
(90) days after
the
end
of each
fiscal year
of
the
Company, but in no event prior to the time that such Reports are publicly filed with the
Commission or otherwise made publicly available; and
(c)
Copies
of
all
notices
and
information,
including
without
limitation
notices
and
proxy
statements
in
connection
with
any
meetings,
that
are
provided
to
holders
of
shares
of
Common
Stock,
contemporaneously
with
the
delivery
of
such
notices
or
information
to
such
holders of Common Stock.
Section 3.7
Other Agreements. The Company shall not enter into any
agreement
in
which
the
terms
of
such
agreement
would
restrict
or
impair
the
right
or
ability
of
the Company or any Subsidiary to perform under any Transaction Document.
Section 3.8
Reservation
of
Shares.
So
long
as
the Warrants
remain
outstanding,
the
Company
shall
take
all
action
necessary
to
at
all
times
have
authorized,
and
reserved for the purpose of issuance, the maximum number of shares of Common Stock to effect
the exercise of the Warrants.
-15-
Section 3.9
Disclosure
of
Transactions
and
Other
Material
Information.
On
or
before
8:30
a.m.,
New
York
City
time,
on
the
Business
Day
immediately
following
the
Closing
Date,
the
Company shall
file
a
Current
Report
on Form
8-K
with
the
Commission
describing the
terms
of
the
transactions
contemplated
by
the
Transaction
Documents
and
including
as
exhibits
to such Current Report on Form 8-K this Agreement, a form of the Warrant, and the Registration
Rights
Agreement,
and
the
schedules
hereto
and
thereto
in
the
form
required
by
the
Exchange
Act
(including
all
attachments,
the
“
8-K
Filing
”
).
For
purposes
of
this
Agreement,
a
“
Business
Day
”
means
any
day
except
Saturday,
Sunday
and
any
day
which
is
a
legal
holiday
or
a
day
on
which
banking
institutions
in
the
State
of
Texas
generally
are
authorized
or
required
by
law
or
other
government actions
to close. As
of
the
time
of
the
filing
of
the 8-K
Filing with the
Commission,
no
Purchaser
shall
be
in
possession
of
any
material,
nonpublic
information
received
from
the
Company,
any
of
its
Subsidiaries
or
any
of
their
respective
officers,
directors,
employees
or
agents,
that
is
not
disclosed
in
the
8-K
Filing.
The
Company
shall
not,
and
shall
cause
each
of
its
Subsidiaries
and
its
and
each
of
their
respective
officers,
directors,
employees
and
agents
not
to,
provide
any Purchaser
with
any
material,
nonpublic
information
regarding
the
Company or
any of
its Subsidiaries from
and
after the
filing of the 8-K
Filing with the Company
without the
express written
consent of
such
Purchaser. Subject to the
foregoing,
neither
the
Company
nor
any
Purchaser
shall
issue
any
press
releases
or
any
other
public
statements
with
respect
to
the
transactions
contemplated
hereby;
provided,
however,
that
the
Company
shall
be
entitled,
without
the
prior
approval
of
any
Purchaser,
to
make
any
press
release
or
other
public
disclosure
with
respect
to
such
transactions
(i)
in
substantial
conformity
with
the
8-K
Filing
and
contemporaneously therewith, and (ii) as is required by applicable law and regulations, including
the
applicable
rules
and
regulations
of
the
OTC
Markets
Group
(provided
that
in
the
case
of
clause
(i)
above,
each
Purchaser
shall
be
notified
by the
Company (although
the
consent
of
such
Purchaser shall not be required) in connection with any such press release or other public
disclosure prior to its release).
Section 3.10 Delivery
of Securities. At Closing
or as soon thereafter as
reasonably
possible
(but
in
any
event
no
later
than
three
Business
Days
immediately
following
the
Closing
Date),
the
Company
shall
deliver
to
each
Purchaser
certificates
representing
the
Shares (in such
denominations as each Purchaser may request),
and the original Warrants
acquired by such Purchaser at the Closing.
Section 3.11 [Intentionally Omitted].
Section 3.12 Subsequent Financings.
(a)
Until the first anniversary of the Closing Date, the Company hereby grants
to
each
Purchaser
(but
not
its
assigns)
that
(A)
still
owns
Shares
purchased
hereunder
immediately
prior
to
the
issuance
of
the
“
New
Securities
”
(as
defined
in
Section 3.12(b)),
(B)
purchased
Shares
on
the
Closing
Date,
and
(C)
was
not
an
officer
or
director
of
the
Company as
of
the
Closing
Date
(any
such
Purchaser,
for
such
purpose,
an
“
Eligible
Purchaser
”
),
a
right
(the
“
Preemptive Right
”
) to purchase all or any part of
such Eligible Purchaser
’
s pro rata share of any
New Securities that the
Company may,
from
time to time, propose to sell
and issue.
The pro
rata
share
for
each
Eligible
Purchaser,
for
purposes
of
the
Preemptive
Right,
is
the
ratio
of
(x) the
number
of
shares
of
Common
Stock
then
held
or
deemed
to
be
held
by
such
Eligible
Purchaser
immediately prior to the issuance of the New Securities (assuming the full exercise of the
Warrants),
to
(y) the
total
number
of
shares
of
Common
Stock
of
the
Company
outstanding
-16-
immediately prior to the
issuance of the New Securities (after
giving effect to the full exercise of
the Warrants).
(b)
For
purposes
of
this
Section 3.12,
“
New
Securities
”
shall
mean
any
Common
Stock,
whether
or
not
authorized
on
the
date
hereof,
and
rights,
options
or
warrants
to
purchase Common Stock and securities of
any type whatsoever that
are, or may become,
convertible
into
Common
Stock;
provided,
however,
that
“
New
Securities
”
does
not
include
the
following:
(i)
shares of capital stock of the Company issuable upon conversion or
exercise of any currently outstanding securities or any Shares, Warrants or New Securities issued
in accordance with this Agreement (including the Warrant Shares);
(ii)
shares
or
options
or
warrants
for
Common
Stock
granted
to
officers, directors and employees of, and consultants to, the Company pursuant to stock option or
purchase
plans
or
other
compensatory
agreements
approved
by
the
Compensation
Committee
of
the Board of Directors;
(iii)
shares
of
Common
Stock
issued
in
connection
with
any
pro
rata
stock
split
or
stock
dividend
in
respect
of
any
series
or
class
of
capital
stock
of
the
Company
or
recapitalization by the Company;
(iv)
shares
of
capital
stock,
or
options
or
warrants
to
purchase
capital
stock,
issued
to a
strategic
investor
in connection
with a
strategic
commercial
agreement or
pursuant
to
joint
ventures,
partnerships,
licensing
agreements
or
other
similar
arrangements,
as
determined by the Board of Directors;
(v)
shares
of
capital
stock,
or
options
or
warrants
to
purchase
capital
stock, issued pursuant to
a commercial borrowing,
secured lending or lease financing transaction
approved by the Board of Directors;
(vi)
shares
of
capital
stock,
or
options
or
warrants
to
purchase
capital
stock,
issued
pursuant
to
the
acquisition
of
another
corporation
or
entity
by
the
Company
by
consolidation,
merger,
purchase
of
all
or
substantially all
of
the
assets,
or
other reorganization
in
which
the
Company
acquires,
in a single transaction
or
series
of
related
transactions,
all or
substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of
the
voting
power
of
such
other
corporation
or
entity or
fifty percent
(50%)
or
more
of
the
equity
ownership of such other corporation or entity;
(vii)
shares
of
capital
stock
issued
in
an
underwritten
public
securities
offering pursuant to a registration statement filed under the Securities Act;
(viii) shares
of
capital
stock,
or
options
or
warrants
to
purchase
capital
stock,
issued
to
current
or
prospective
customers
or
suppliers
of
the
Company
or
to
its
employees,
officers
or
directors,
approved
by
the
Board
of
Directors
as
compensation
or
accommodation
in
lieu
of
other
payment,
compensation
or
accommodation
to
such
customer,
supplier, employee, officer or director;
-17-
(ix)
shares of capital stock, or warrants to purchase capital stock, issued
to
any
Person
that
provides
services
to
the
Company
as
compensation
therefor
pursuant
to
an
agreement approved by the Board of Directors;
(x)
shares
of
capital
stock,
or
options
or
warrants
to
purchase
capital
stock,
offered
in
a
transaction
where
purchase
of
such
securities
by
any
Purchaser
would
cause
such
transaction
to
fail
to
comply
with
applicable
federal
or
state
securities
laws
or
would
cause
an
applicable
registration
or
qualification
exemption
to
fail
to
be
available
to
the
Company;
provided,
however,
that
this
clause
(x)
shall
apply
only
to
the
Purchaser
or
Purchasers
who
would cause any such failure, and not to any of the other Purchasers; and
(xi)
securities
issuable
upon
conversion
or
exercise
of
the
securities
set
forth in paragraphs (i)
–
(x) above.
In
the
event
that
the
Company proposes
to
undertake an
issuance of
New
Securities,
it
shall
give
each
Eligible
Purchaser
written
notice
(the
“
Notice
”
)
of
its
intention,
describing the
type of
New
Securities, the price,
and
the general terms
upon which the Company proposes to issue the same.
Each
Eligible
Purchaser
shall
have
twenty
(20)
Business
Days
after
receipt
of
such
notice
to
agree
to
purchase
all
or
any
portion
of
its
pro
rata
share
of
such
New
Securities
at
the
price
and
upon
the
terms specified
in the
notice
by
giving
written
notice
to
the
Company
and
stating
therein
the
quantity
of
New
Securities
to
be
purchased.
In
the
event
that
any
New
Securities
subject
to
the
Preemptive
Right
are
not
purchased
by
the
Eligible
Purchaser
within
the
twenty
(20)
Business Day period specified
above,
the Company shall have
ninety (90) days thereafter
to
sell
(or
enter
into
an
agreement
pursuant
to
which
the
sale
of
New
Securities
that
had
been
subject
to
the
Preemptive
Right
shall
be
closed,
if
at
all,
within
sixty
(60)
days
from
the
date
of
said
agreement)
the
New
Securities
with
respect
to
which
the
rights
of
the
Purchaser
were
not
exercised
at
a
price
and
upon
terms,
including
manner
of
payment,
no
more
favorable
to
the
purchasers thereof than specified in the Notice.
In the event the Company has not sold all offered
New Securities within such
ninety (90) day period (or sold and issued New Securities in
accordance
with
the
foregoing
within
sixty
(60)
days
from
the
date
of
such
agreement),
the
Company
shall
not
thereafter
issue
or
sell
any
New
Securities,
without
first
complying
again
with the procedures set forth in this Section 3.12.
Section 3.13 Beneficial Ownership Restrictions.
(a)
Notwithstanding
anything
to
the
contrary
set
forth
in
this
Agreement
or
any
other
Transaction
Document
(including,
without
limitation,
the
Warrant),
at
no
time
may
a
Purchaser
convert
a
Security
if
the
number
of
shares
of
Common
Stock
to
be
issued
pursuant
to
such conversion, when aggregated with all other shares of Common Stock owned by such
Purchaser
at
such
time,
would
result
in
such
Purchaser
beneficially
owning
(as
determined
in
accordance with Section 13(d) of the Exchange Act, and the rules thereunder) in excess of 4.99%
of
the
then
issued
and
outstanding
shares
of
Common
Stock
outstanding
at
such
time;
provided,
however,
that
upon
a
Purchaser
providing
the
Company
with
sixty-one
(61)
days
’
notice
(the
“
Waiver Notice
”
) that such Purchaser would like to waive this Section 3.13(a) with regard to any
or
all
shares
of
Common
Stock
issuable
upon
conversion
of
any
Security,
this
Section
3.13(a)
shall
be
of
no
force
or
effect
with
regard
to
those
Securities
referenced
in
the
Waiver
Notice;
provided,
further,
that
any
Purchaser
may
waive
this
Section
3.13(a)
by
so
indicating
on
the
-18-
signature
page
to
this
Agreement,
any
such
waiver
to
be
effective
on
and
as
of
the
date
of
this
Agreement.
(b)
Notwithstanding
anything
to
the
contrary
set
forth
in
this
Agreement
or
any
other
Transaction
Document
(including,
without
limitation,
the
Warrant),
at
no
time
may
a
Purchaser
convert
a
Security
if
the
number
of
shares
of
Common
Stock
to
be
issued
pursuant
to
such conversion, when aggregated with all other shares of Common Stock owned by such
Purchaser
at
such
time,
would
result
in
such
Purchaser
beneficially
owning
(as
determined
in
accordance with Section 13(d) of the Exchange Act, and the rules thereunder) in excess of 9.99%
of
the
then
issued
and
outstanding
shares
of
Common
Stock
outstanding
at
such
time;
provided,
however,
that
upon
a
Purchaser
providing
the
Company
with
a
Waiver
Notice
that
such
Purchaser
would
like
to
waive
this
Section
3.13(b)
with
regard
to
any
or
all
shares
of
Common
Stock
issuable
upon
conversion
of
a
Security,
this
Section
3.13(b)
shall
be
of
no
force
or
effect
with regard to those Securities referenced in the Waiver Notice.
ARTICLE IV
Conditions
Section 4.1
Conditions
Precedent
to
the
Obligation
of
the
Company
to
Close
and to Sell the Shares and Warrants. The obligation hereunder of the Company to close and issue
and
sell
the
Shares
and
the
Warrants
to
the
Purchasers
on
the
Closing
Date
is
subject
to
the
satisfaction
or
waiver,
at
or
before
the
Closing,
of
the
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.
(a)
Accuracy of
the
Purchasers
’
Representations
and
Warranties.
The
representations
and
warranties
of
each
Purchaser
shall
be true and
correct
in
all
material
respects
as
of
the
date
when
made
and
as
of
the
Closing
Date
as
though
made
at
that
time,
except
for
representations and warranties that are expressly made as of a particular date, which shall be true
and correct in all material respects as of such date.
(b)
Performance by the Purchasers. Each Purchaser shall have performed,
satisfied
and
complied
in
all
material
respects
with
all
covenants,
agreements
and
conditions
required
by
this
Agreement
to
be
performed,
satisfied
or
complied
with
by
the
Purchasers
at
or
prior to the Closing Date.
(c)
No
Injunction.
No
statute,
rule,
regulation,
executive order,
decree,
ruling
or
injunction
shall
have
been
enacted,
entered,
promulgated
or
endorsed
by
any
court
or
governmental
authority
of
competent
jurisdiction
which
prohibits
the
consummation
of
any
of
the transactions contemplated by this Agreement.
(d)
Delivery
of
Purchase
Price.
The
Purchase
Price
for
the
Shares and
the
Warrants shall have been delivered to the Company at the Closing.
(e)
Delivery of Transaction Documents. The Transaction Documents to which
the
Purchasers
are
party
shall
have
been
duly
executed
and
delivered
by
the
Purchasers
to
the
Company.
-19-
Section 4.2
Conditions
Precedent
to
the
Obligation
of
the
Purchasers
to
Close
and
to
Purchase
the
Shares
and
the
Warrants.
The
obligation
hereunder
of
the
Purchasers
to
purchase
the
Shares
and
the
Warrants
and
consummate
the
transactions
contemplated
by
this
Agreement is subject to the satisfaction or waiver, at or before the Closing, of each of the
conditions
set
forth
below.
These
conditions
are
for
the
Purchasers
’
sole
benefit
and
may
be
waived by the Purchasers at any time in their sole discretion.
(a)
Accuracy
of
the
Company
’
s
Representations
and
Warranties.
Each
of
the
representations
and
warranties
of
the
Company
in
this
Agreement,
the
Warrants
and
the
Registration
Rights
Agreement
shall
be true
and
correct
in
all
material
respects
as
of
the
Closing
Date,
except
for
representations
and
warranties
that
speak
as
of
a
particular
date,
which
shall
be
true and correct in all material respects as of such date.
(b)
Performance
by
the
Company.
The
Company
shall
have
performed,
satisfied
and
complied
in
all
respects
with
all
covenants,
agreements
and
conditions
required
by
this
Agreement
to
be
performed,
satisfied
or
complied
with
by
the
Company
at
or
prior
to
the
Closing Date.
(c)
No
Suspension,
Etc.
Trading
in
the
Common
Stock
shall
not
have
been
suspended by the Commission (except for any suspension of trading of limited duration agreed to
by
the
Company,
which
suspension
shall
be
terminated
prior
to
the
Closing),
and,
at
any
time
prior
to
the
Closing
Date,
trading
in
securities
generally
as
reported
by
Bloomberg
Financial
Markets
(
“
Bloomberg
”
)
shall
not
have
been
suspended
or
limited,
or
minimum
prices
shall
not
have
been
established
on
securities
whose
trades
are
reported
by
Bloomberg,
or
quoted
by
the
OTC
Markets
Group,
nor
shall
a
banking
moratorium
have
been
declared
either
by
the
United
States
or
Texas
State
authorities,
nor
shall
there
have
occurred
any
national
or
international
calamity or
crisis
of
such
magnitude
in
its
effect
on
any financial
market
which,
in
each
case,
in
the
reasonable
judgment
of
the
Purchasers,
makes
it
impracticable
or
inadvisable
to
purchase
the
Shares and the Warrants.
(d)
No
Injunction.
No
statute,
rule,
regulation,
executive
order,
decree,
ruling
or
injunction
shall
have
been
enacted,
entered,
promulgated
or
endorsed
by
any
court
or
governmental
authority
of
competent
jurisdiction
which
prohibits
the
consummation
of
any
of
the transactions contemplated by this Agreement.
(e)
No
Proceedings
or
Litigation.
No
action,
suit
or
proceeding
before
any
arbitrator
or
any
governmental
authority
shall
have
been
commenced,
and
no
investigation
by
any
governmental
authority
shall
have
been
threatened,
against
the
Company
or
any
Subsidiary,
or any
of the officers, directors or affiliates of the Company
or any Subsidiary, seeking
to
restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages
in connection with such transactions.
(f)
Opinion of Counsel, Etc.
The Purchasers shall have received an opinion of
counsel
to
the
Company,
dated
the
Closing Date,
in
the
form
of
Exhibit C hereto,
and
such
other
certificates
and
documents
as
the
Purchasers
or
their
counsel
shall
reasonably require
incident
to
the Closing.
-20-
(g)
Warrants.
The
Company
shall
have
delivered
to
the
Purchasers
the
originally executed Warrants (in such denominations as each Purchaser may request) being
acquired by the Purchasers in accordance with Section 3.10.
(h)
Resolutions.
The
Board
of
Directors
of
the
Company
shall
have
adopted
resolutions
consistent
with
Section
2.1(b)
hereof
in
a
form
reasonably
acceptable
to
the
Purchasers (the
“
Resolutions
”
).
(i)
Reservation
of
Shares.
As
of
the
Closing
Date,
the
Company
shall
have
reserved
out
of
its
authorized
and
unissued
Common
Stock,
solely
for
the
purpose
of
effecting
the
issuance
of
the
Shares
and
the
exercise
of
the
Warrants,
a
number
of
shares
of
Common
Stock
equal
to
the
number
of
Warrant
Shares
issuable
upon
exercise
of
the
Warrants,
assuming
the
Warrants
were
granted
on
the
Closing
Date
(after
giving
effect
to
the
Warrants
to
be
issued
on the Closing Date and assuming the Warrants were fully exercisable on such date regardless of
any limitation on the timing or amount of such exercises).
(j)
Secretary
’
s Certificate. The Company shall have delivered to the
Purchasers a secretary
’
s certificate, dated as of the Closing Date, as to (i) the Resolutions, (ii) the
Articles
and
the
Bylaws,
each
as
in
effect
at
the
Closing,
and
(iii)
the
authority
and
incumbency
of
the
officers
of
the
Company
executing
the
Transaction
Documents
and
any
other
documents
required to be executed or delivered in connection therewith.
(k)
Officer
’
s
Certificate.
On
the
Closing
Date,
the
Company
shall
have
delivered
to
the
Purchasers
a
certificate
of
an
executive
officer
of
the
Company,
dated
as
of
the
Closing
Date,
confirming
the
accuracy
of
the
Company
’
s
representations,
warranties
and
covenants as
of
the
Closing
Date and
confirming
the
compliance
by
the
Company
with the
conditions precedent set forth in this Section 4.2 as of the Closing Date.
(l)
Fees
and
Expenses. As of the Closing Date, all
fees and
expenses required
to
be
paid
by
the
Company
shall
have
been
or
authorized
to
be
paid
by
the
Company
as
of
the
Closing Date.
(m)
Registration
Rights
Agreement.
As
of
the
Closing
Date,
the
parties
shall
have entered into the Registration Rights Agreement in the Form of Exhibit D attached hereto.
(n)
Lock-Up Agreements. Each officer, director and holder of 10% or more of
the Common Stock shall have executed and delivered to the Purchasers a Lock-Up Agreement in
the form attached hereto as Exhibit E.
(o)
Material Adverse Effect. No Material Adverse Effect shall have occurred.
ARTICLE V
Transfer Restrictions and Legends
Section 5.1
Legends.
-21-
(a)
The Securities may only be disposed of in compliance with state and
federal
securities
laws.
In
connection
with
any
transfer
of
Securities
other
than
pursuant
to
an
effective
registration
statement,
to
the
Company,
to
an
Affiliate
of
a
Purchaser
or
in
connection
with
a
pledge
permitted
by
Section
5.1(b),
the
Company
may
require
the
transferor
thereof
to
provide to the Company an opinion of
counsel selected by the transferor, the form
and substance
of which opinion shall be reasonably satisfactory to the Company,
to the
effect that such transfer
does
not
require registration
of
such
transferred
Securities
under
the
Securities
Act.
As
a
condition
of
transfer,
any
such
transferee
shall
agree
in
writing
to
be
bound
by
the
terms
of
this
Agreement
and
shall
have
the
rights
of
a
Purchaser
under
this
Agreement
and
the
Registration
Rights Agreement.
(b)
The Purchasers agree to the imprinting, so long as is required by
this
Section 5.1(b), of a legend on any of the Securities in the following form:
THESE
SECURITIES
HAVE
NOT
BEEN
REGISTERED
WITH
THE
SECURITIES
AND
EXCHANGE
COMMISSION
OR
THE
SECURITIES
COMMISSION
OF
ANY
STATE
IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES
ACT
OF
1933,
AS
AMENDED
(THE
“
SECURITIES
ACT
”
),
AND,
ACCORDINGLY,
MAY
NOT
BE
OFFERED
OR
SOLD
EXCEPT
PURSUANT
TO
AN
EFFECTIVE
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES
ACT
OR
PURSUANT
TO
AN
AVAILABLE
EXEMPTION
FROM,
OR
IN
A
TRANSACTION
NOT
SUBJECT
TO,
THE
REGISTRATION
REQUIREMENTS
OF
THE
SECURITIES
ACT
AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT,
THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THESE
SECURITIES
MAY
BE
PLEDGED
IN
CONNECTION
WITH
A
BONA
FIDE
MARGIN
ACCOUNT
WITH
A
REGISTERED
BROKER-DEALER
OR
OTHER
LOAN
WITH
A
FINANCIAL
INSTITUTION
THAT
IS
AN
“
ACCREDITED
INVESTOR
”
AS
DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.
The
Company
acknowledges
and
agrees
that
a
Purchaser
may
from
time
to
time
pledge
pursuant
to
a
bona
fide
margin
agreement
with
a
registered
broker-dealer
or
grant
a
security
interest in some or all of the Securities to a financial institution that is an
“
accredited investor
”
as
defined
in
Rule
501(a)
under
the
Securities
Act
and
who
agrees
to
be bound
by the
provisions
of
this
Agreement
and
the
Registration
Rights
Agreement
and,
if
required
under
the
terms
of
such
arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or
secured
parties.
Such
a
pledge
or
transfer
would
not
be
subject
to
approval
of
the
Company
and
no
legal
opinion
of
legal
counsel
of
the
pledgee,
secured
party
or
pledgor
shall
be
required
in
connection
therewith.
Further,
no
notice
shall
be
required
of
such
pledge.
At
the
appropriate
Purchaser
’
s
expense,
the
Company
will
execute
and
deliver
such
reasonable
documentation
as
a
pledgee
or
secured
party
of
Securities
may
reasonably
request
in
connection
with
a
pledge
or
transfer
of
the
Securities,
including,
if
the
Securities
are
subject
to
registration
pursuant
to
the
Registration Rights Agreement, the preparation and filing of any required prospectus
supplement
under
Rule
424(b)(3)
under
the
Securities
Act
or
other applicable
provision
of
the
Securities
Act
to appropriately amend the list of Selling Stockholders thereunder, if required.
-22-
(c)
Certificates
evidencing
the
Shares
and
the
Warrant
Shares
shall
not
contain
any
legend
(including
the
legend
set
forth
in
Section
5.1(b)),
(i)
while
a
registration
statement
(including
the
Registration
Statement)
covering
the
resale
of
such
security is
effective
under
the
Securities
Act,
or
(ii)
following
any sale
of
such
Shares
or
Warrant
Shares
pursuant
to
Rule
144,
or
(iii)
if
such
Shares
or
Warrant
Shares
are
eligible
for
sale
under
Rule
144(b)(1),
or
(iv)
if
such
legend
is
not
required
under
applicable
requirements
of
the
Securities
Act
(including
judicial
interpretations
and
pronouncements
issued
by
the
Staff
of
the
Commission).
The
Company shall cause its counsel to issue a legal opinion to the Company
’
s transfer agent
promptly after the Effectiveness Date (as defined in the Registration Rights Agreement) if
required
by the
Company
’
s
transfer
agent
to
effect
the
removal
of
the
legend
hereunder.
If
all
or
any portion of a Warrant is exercised at a time when there is an effective registration statement to
cover
the
resale
of
the
Warrant
Shares,
such
Warrant
Shares
shall
be
issued
free
of
all
legends.
The
Company
agrees
that
following
the
Effectiveness
Date
or
at
such
time
as
such
legend
is
no
longer
required
under
this
Section
5.1(c),
it
will,
no
later
than
five
Business
Days
following
the
delivery by a Purchaser
to the Company or the Company
’
s transfer
agent of a certificate
representing Shares
or
Warrant
Shares,
as
the
case
may be,
issued
with
a restrictive
legend
(such
date,
the
“
Legend
Removal
Date
”
),
deliver
or
cause
to
be
delivered
to
such
Purchaser
a
certificate
representing
such
Securities
that
is
free
from
all
restrictive
and
other
legends.
The
Company
may
not
make
any
notation
on
its
records
or
give
instructions
to
any
transfer
agent
of
the Company that enlarge the restrictions on transfer set forth in this Section 5.1.
(d)
In
addition
to
such
Purchaser
’
s
other
available
remedies,
the
Company
shall
pay
to
a
Purchaser,
in
cash,
as
liquidated
damages
and
not
as
a
penalty,
for
each
$1,000
of
Shares and/or Warrant Shares (based on the
closing price of the Common Stock on the date such
Securities
are
submitted
to
the
Company
’
s
transfer
agent)
subject
to
Section 5.1(c),
$10
per
Business
Day
(increasing
to
$20
per
Business
Day
five
(5)
Business
Days
after
such
damages
have
begun
to
accrue)
for
each
Business
Day
after
the
Legend
Removal
Date
until
such
certificate is delivered in proper form. Nothing herein shall limit such Purchaser
’
s right to pursue
actual
damages
for
the
Company
’
s
failure
to
deliver
certificates
representing
any
Securities
as
required
by
the
Transaction
Documents,
and
such
Purchaser
shall
have
the
right
to
pursue
all
remedies
available
to
it
at
law
or
in
equity
including,
without
limitation,
a
decree
of
specific
performance and/or injunctive relief.
(e)
Each Purchaser, severally and not jointly with the other Purchasers, agrees
that
the
removal
of
the
restrictive
legend
from
certificates
representing
Securities
as
set
forth
in
this Section 5.1 is predicated upon the Company
’
s reliance that the Purchaser will sell any
Securities
pursuant
to
either
the
registration
requirements
of
the
Securities
Act,
including
any
applicable prospectus delivery requirements, or an exemption therefrom.
ARTICLE VI
Termination
Section 6.1
Termination
by
Mutual
Consent.
This
Agreement
may
be
terminated
at
any
time
prior
to
the
Closing
Date
by
the
mutual
written
consent
of
the
Company
and the Purchasers.
-23-
Section 6.2
Effect of Termination. In the event of termination by the Company
or
the
Purchasers,
written
notice
thereof
shall forthwith
be
given
to the
other
party
and
the
transactions
contemplated
by
this
Agreement
shall
be
terminated
without
further
action
by
any
party. If
this
Agreement
is
terminated
as
provided
in
Section
6.1
herein,
this
Agreement
shall
become
void
and
of
no
further
force
and
effect,
except
for
Sections
8.1
and
8.2,
and
Article
VII
herein.
Nothing
in
this
Section
6.2
shall
be
deemed
to
release
the
Company
or
any
Purchaser
from any liability for any breach under this Agreement, or to impair the rights of the Company or
such
Purchaser
to
compel
specific
performance
by
the
other
party
of
its
obligations
under
this
Agreement.
ARTICLE VII
Indemnification
Section 7.1
General
Indemnity.
The
Company
agrees
to
indemnify
and
hold
harmless each Purchaser (and its respective directors, officers, employees, affiliates, agents,
successors and assigns) from and against any and all losses, liabilities, deficiencies, costs,
damages
and
expenses
(including,
without
limitation,
reasonable
attorneys
’
fees,
charges
and
disbursements) incurred by each Purchaser or any such Person as a result of any inaccuracy in or
breach
of
the
representations,
warranties
or
covenants
made
by the
Company herein.
The
Purchasers
severally
but
not
jointly
agree
to
indemnify
and
hold
harmless
the
Company
and
its
directors, officers, employees, affiliates, agents, successors and assigns
from and against any and
all
losses,
liabilities,
deficiencies,
costs,
damages
and
expenses
(including,
without
limitation,
reasonable attorneys
’
fees, charges and disbursements) incurred by the
Company as result of any
inaccuracy
in
or
breach
of
the
representations,
warranties
or
covenants
made
by
the
Purchasers
herein.
Section 7.2
Indemnification
Procedure.
Any
party
entitled
to
indemnification
under this Article VII (an
“
indemnified party
”
) will give written notice to the indemnifying party
of
any
matters
giving
rise
to
a
claim
for
indemnification;
provided,
that
the
failure
of
any
party
entitled to indemnification hereunder to give notice as provided herein shall not relieve the
indemnifying
party
of
its
obligations
under
this
Article
VII
except
to
the
extent
that
the
indemnifying
party
is actually
prejudiced
by
such
failure
to give
notice.
In
case
any
action,
proceeding
or
claim
is
brought
against
an
indemnified
party in
respect
of
which
indemnification
is
sought
hereunder,
the
indemnifying
party
shall
be
entitled
to
participate
in
and,
unless
in
the
reasonable
judgment
of
the
indemnified
party
a
conflict
of
interest
between
it
and
the
indemnifying
party
may
exist
with
respect
to
such
action,
proceeding
or
claim,
to
assume
the
defense
thereof
with
counsel
reasonably
satisfactory
to
the
indemnified
party.
In
the
event
that
the
indemnifying
party advises
an
indemnified
party that
it
will
contest
such
a
claim
for
indemnification
hereunder,
or
fails,
within
thirty
(30)
days
of
receipt
of
any
indemnification
notice to notify, in writing, such Person of its election to defend, settle or compromise, at its sole
cost and expense, any action, proceeding or claim
(or discontinues its defense at any time
after
it
commences such defense), then the indemnified party may, at its
option, defend, settle or
otherwise
compromise
or
pay
such
action
or
claim.
In
any
event,
unless
and
until
the
indemnifying
party
elects
in
writing
to
assume
and
does
so
assume
the
defense
of
any
such
claim, proceeding or action, the indemnified party
’
s costs and expenses arising out of the
defense, settlement or compromise of any such action, claim or proceeding shall be losses
-24-
subject to indemnification hereunder. The indemnified party 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 which relates to
such action or
claim.
The indemnifying party
shall
keep
the
indemnified
party
fully
apprised
at
all
times
as
to
the
status
of
the
defense
or
any
settlement
negotiations
with
respect
thereto.
If
the
indemnifying party elects
to
defend
any such
action
or
claim,
then
the
indemnified
party
shall
be
entitled
to
participate
in
such
defense
with
counsel
of
its
choice
at
its
sole
cost
and
expense.
The
indemnifying
party
shall
not
be
liable
for
any
settlement
of
any
action,
claim
or
proceeding
effected
without
its
prior
written
consent.
Notwithstanding
anything
in
this
Article
VII
to
the
contrary,
the
indemnifying
party
shall
not,
without
the
indemnified party
’
s
prior
written
consent,
settle
or
compromise
any claim
or
consent
to
entry
of
any
judgment
in
respect
thereof
which
imposes
any
future
obligation
on
the
indemnified
party or
which
does
not
include,
as
an
unconditional
term
thereof,
the
giving
by the
claimant
or
the
plaintiff
to
the
indemnified
party
of
a
release
from
all
liability in
respect
of
such
claim.
The
indemnification
required
by
this
Article
VII
shall
be
made
by
periodic
payments
of
the
amount
thereof
during
the
course
of
investigation
or
defense,
as
and
when
bills
are
received
or
expense,
loss,
damage
or
liability
is
incurred,
so
long
as
the
indemnified
party
irrevocably
agrees
to
refund
such
moneys
if
it
is
ultimately
determined
by
a
court
of
competent
jurisdiction
that
such
party
was
not
entitled
to
indemnification.
The
indemnity
agreements
contained
herein
shall
be
in
addition
to
(a)
any
cause
of
action
or
similar
rights
of
the
indemnified
party
against
the indemnifying party or others,
and (b) any liabilities the indemnifying party may be subject to
pursuant to the law.
ARTICLE VIII
Miscellaneous
Section 8.1
Fees
and
Expenses.
Each
party
shall
pay
the
fees
and
expenses
of
its
advisors,
counsel,
accountants
and
other
experts,
if
any,
and
all
other
expenses,
incurred
by
such
party
incident
to
the
negotiation,
preparation,
execution,
delivery
and
performance
of
this
Agreement; provided, however, that the Company shall pay a flat $20,000 to YP Holdings, LLC,
the
lead
Purchaser
(
“
YP
”
),
to
reimburse
YP
for
the
fees
and
expenses
(including
attorneys
’
fees
and
expenses)
incurred
by it
in
connection
with
its
due diligence review of
the
Company and
the
preparation,
negotiation,
execution,
delivery
and
performance
of
this
Agreement
and
the
other
Transaction
Documents
and
the
transactions
contemplated
thereunder
(including
YP
’
s
counsel
’
s
review
of
the
Registration
Statement
(as
contemplated
by the
Registration
Rights
Agreement)
as
special
counsel
to
Purchasers).
The
Company hereby
authorizes
and
directs
YP
to
deduct
$20,000 from the Purchase Price to be paid by YP at Closing in payment and satisfaction of such
$20,000
due
and
payable
by
the
Company.
In
addition,
the
Company
shall
pay
all
reasonable
fees
and expenses incurred by the
Purchasers
in connection with any amendments, modifications
or
waivers
of
this
Agreement
or
any
of
the
other
Transaction
Documents
or
incurred
in
connection with the enforcement of this Agreement and any of the other Transaction Documents,
following
a
breach
by
the
Company
of
this
Agreement
or
any
of
the
other
Transaction
Documents, including,
without limitation, all reasonable
attorneys
’
fees, disbursements and
expenses.
Section 8.2
Specific Enforcement; Consent to Jurisdiction.
-25-
(a)
The
Company
and
the
Purchasers
acknowledge
and
agree
that
irreparable
damage
would
occur
in
the
event
that
any
of
the
provisions
of
this
Agreement
or
the
other
Transaction
Documents were
not performed
in accordance
with their
specific
terms or
were
otherwise
breached.
It
is
accordingly
agreed
that
the
parties
shall
be
entitled
to
an
injunction
or
injunctions
to
prevent
or
cure
breaches
of
the
provisions
of
this
Agreement
or
the
other
Transaction
Documents
and
to
enforce
specifically
the
terms
and
provisions
hereof
or
thereof,
this being in addition to any other remedy to which any of them may be entitled by law or equity.
(b)
The
Company
and
each
Purchaser
(i)
hereby
irrevocably
submit
to
the
exclusive
jurisdiction
of the
United
States
District
Court
sitting in
the
Northern
District
of
Texas
and
the
courts
of
the
State
of
Texas
located
in
Dallas,
Texas,
for
the
purposes
of
any suit,
action
or proceeding arising out of or relating to this Agreement or any of the other Transaction
Documents
or
the
transactions
contemplated
hereby or
thereby,
and
(ii)
hereby waive,
and
agree
not
to
assert
in
any
such
suit,
action
or
proceeding,
any
claim
that
it
is
not
personally
subject
to
the
jurisdiction
of
such
court,
that
the
suit,
action
or
proceeding
is
brought
in
an
inconvenient
forum
or
that
the
venue
of
the
suit,
action
or
proceeding
is
improper.
The
Company
and
each
Purchaser
consent
to
process
being
served
in
any
such
suit,
action
or
proceeding
by
mailing
a
copy
thereof
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
in
this
Section
8.2
shall
affect
or
limit
any
right
to
serve
process
in
any
other
manner
permitted by law.
The Company and the
Purchasers hereby agree that the prevailing party in
any
suit, action or proceeding arising out of or relating to the Shares, the Warrants or any Transaction
Document
shall
be
entitled
to
reimbursement
for
reasonable
legal
fees
from
the
non-prevailing
party.
Section 8.3
Entire Agreement; Amendment. This Agreement and the
Transaction Documents contain the entire understanding and agreement of the parties with
respect
to
the
matters
covered
hereby
and,
except
as
specifically
set
forth
herein
or
in
the
other
Transaction
Documents,
neither
the
Company
nor
any Purchaser
make any representation,
warranty,
covenant
or
undertaking
with
respect
to
such
matters,
and
they
supersede
all
prior
understandings
and
agreements
with respect to said subject matter,
all of
which
are
merged
herein.
No
provision
of
this
Agreement
may
be
waived
or
amended
other
than
by
a
written
instrument
signed
by
the
Company
and
the
holders
of
at
least
a
majority
in
interest
of
the
then-
outstanding
Shares,
and
no
provision
hereof
may
be
waived
other
than
by
a
written
instrument
signed
by the
party against
whom
enforcement
of
any such
amendment
or
waiver
is
sought.
No
such amendment shall be effective to the extent that it applies to less than all of the holders of the
Shares
then
outstanding.
No
consideration
shall
be
offered
or
paid
to
any
Person
to
amend
or
consent to a waiver or modification of any provision of any of the Transaction Documents unless
the
same
consideration
is
also
offered
to
all
of
the
parties
to
the
Transaction
Documents
or
holders of Shares, as the case may be.
Section 8.4
Notices.
Any
notices
required
or
permitted
to
be
given
under
this
Agreement
(and,
unless
otherwise
expressly
provided
therein,
under
any
document
delivered
pursuant
to
this
Agreement)
shall
be
given
in
writing
and
shall
be
deemed
received
(a)
when
personally delivered to the relevant party at such
party
’
s address as set forth below, (b) if sent by
mail
(which
must
be
certified
or
registered
mail,
postage
prepaid),
when
received
or
rejected
by
the
relevant
party
at
such
party
’
s
address
indicated
below,
or
(c)
if
sent
by
email
transmission,
when confirmation of delivery is received by the sending party:
-26-
If to the Company:
MediJane Holdings Inc.
2011 Ken Pratt Boulevard, Suite 300
Longmont, Colorado 80501
Attention: Russell G. Stone, Chief Operating Officer
Email:
russell.stone@mjmd.net
with copies (which copies
shall not constitute notice
to the Company) to:
J.M.
Walker &
Associates
Attorneys
At Law
7841 South Garfield Way
Centennial, Colorado 80122
Attention: Jody
M. Walker, Esq.
Email:
jmwlkr85@gmail.com
If to any Purchaser:
At
the
address
of
such
Purchaser
set
forth
on
Exhibit A to this Agreement.
Any
party
hereto
may
from
time
to
time
change
its
address
for
notices
by
giving
at
least
ten (10) days written notice of such changed address to the other party hereto.
Section 8.5
Waivers. No waiver by any party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver
in
the
future
or
a
waiver
of
any
other
provision,
condition
or
requirement
hereof,
nor
shall
any
delay or omission of any party to exercise
any right hereunder in any manner impair the
exercise
of any such right accruing to it thereafter.
Section 8.6
Headings.
The
article,
section
and
subsection
headings
in
this
Agreement
are
for
convenience
only
and
shall
not
constitute
a
part
of
this
Agreement
for
any
other purpose and shall not be deemed to limit or affect any of the provisions hereof.
Section 8.7
Successors and Assigns. This Agreement shall be binding
upon
and
inure
to
the
benefit
of
the
parties
and
their
successors
and
assigns.
After
the
Closing,
the
assignment
by
a
party
to
this
Agreement
of
any
rights
hereunder
shall
not
affect
the
obligations
of
such
party
under
this
Agreement.
After
the
Closing,
the
Purchasers,
in
compliance
with
all
applicable securities laws, may assign the Shares, the Warrants and their rights under this
Agreement
and
the other
Transaction Documents
and any other rights hereto and thereto without
the consent of the Company.
Section 8.8
No
Third
Party
Beneficiaries.
This
Agreement
is
intended
for
the
benefit
of
the
parties
hereto
and
their
respective
permitted
successors
and
assigns
and
is
not
for
the benefit of, nor may any
provision hereof be enforced by, any
other Person (other than
indemnified parties, as contemplated by Article VII).
Section 8.9
Governing Law. This Agreement shall be governed by
and
construed
in
accordance
with
the
internal
laws
of
the
State of
Texas,
without
giving
effect
to
the
choice
of
law
provisions.
This
Agreement
shall
not
be
interpreted
or
construed
with
any
presumption against the party causing this Agreement to be drafted.
-27-
Section 8.10 Survival.
The
representations
and
warranties
of
the
Company
and
the Purchasers
contained in Sections 2.1(o) and 2.1(s) shall survive indefinitely and those
contained in Article II, with the exception of Sections 2.1(o) and 2.1(s), shall survive the
execution and delivery hereof and the Closing until the date two (2) years from the Closing Date,
and
the
agreements
and
covenants
set
forth
in
Articles
I,
III,
V,
VII
and
VIII
of
this
Agreement
shall survive the execution and delivery hereof and the Closing hereunder.
Section 8.11 Counterparts.
This
Agreement
may
be
executed
in
any
number
of
counterparts,
all
of
which
taken
together
shall
constitute
one
and
the
same
instrument
and
shall
become
effective
when
counterparts
have
been
signed
by
each
party
and
delivered
to
the
other
parties hereto, it being understood that all parties need not sign the same counterpart.
Section 8.12 Publicity.
The
Company
agrees
that
it
will
not
disclose,
and
will
not
include
in
any public
announcement,
the
names
of
the
Purchasers
without
the
consent
of
the
Purchasers
in
accordance
with
Section
8.3,
which
consent
shall
not
be
unreasonably
withheld
or
delayed,
or
unless
and
until
such
disclosure is
required
by law,
rule
or
applicable
regulation,
and
then only to the extent of such requirement.
Section 8.13 Severability.
The
provisions
of
this
Agreement
are
severable
and,
in
the
event
that
any
court
of
competent
jurisdiction
shall
determine
that
any
one
or
more
of
the
provisions
or
part
of
the
provisions
contained
in
this
Agreement
shall,
for
any
reason,
be
held
to
be
invalid,
illegal
or
unenforceable
in
any
respect,
such
invalidity,
illegality
or
unenforceability
shall
not
affect
any
other
provision
or
part
of
a
provision
of
this
Agreement
and
this
Agreement
shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of
such
provision,
had
never
been
contained
herein,
so
that
such
provisions
would
be
valid,
legal
and enforceable to the maximum extent possible.
Section 8.14 Further
Assurances.
From
and
after
the
date
of
this
Agreement,
upon
the
request
of
the
Purchasers
or
the
Company,
the
Company
and
each
Purchaser
shall
execute and deliver such instruments, documents and other writings as may be reasonably
necessary or
desirable
to
confirm
and
carry out
and
to
effectuate
fully the
intent
and
purposes
of
this Agreement, the Warrants and the Registration Rights Agreement.
Section 8.15 Independent Nature of Purchasers
’
Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not joint with the
obligations
of
any
other
Purchaser,
and
no
Purchaser
shall
be
responsible
in
any
way
for
the
performance
of
the
obligations
of
any
other
Purchaser
under
any
Purchaser
Transaction
Document.
Nothing
contained
herein
or
in
any
other
Purchaser
Transaction
Document,
and
no
action taken by
any
Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers
as a partnership, an association, a joint venture or
any other kind of entity, or create
a
presumption
that
the
Purchasers
are
in
any
way
acting
in
concert
or
as
a
group
with
respect
to
such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser
confirms that it has independently participated in the negotiation of the transactions
contemplated
hereby
with
the
advice
of
its
own
counsel
and
advisors.
Each
Purchaser
shall
be
entitled
to
independently
protect
and
enforce
its
rights,
including,
without
limitation,
the
rights
arising
out
of
this
Agreement
or
out
of
any
other
Transaction
Documents,
and
it
shall
not
be
necessary
for
any
other
Purchaser
to
be
joined
as
an
additional
party
in
any
proceeding
for
such
purpose. Each Purchaser (other than YP) hereby
agrees and acknowledges that (a) Block &
-28-
Garden,
LLP,
was
retained
solely
by
YP
in
connection
with
its
due
diligence
review
of
the
Company
and
the
preparation,
negotiation,
execution,
delivery
and performance
of
this
Agreement
and
the
other
Transaction
Documents
and
the
transactions
contemplated
thereunder,
and
in
such
capacity has
provided
legal
services
solely to
YP,
(b) Block
&
Garden,
LLP,
has
not
represented,
nor
will
it
represent,
any
Purchaser
(other
than
YP)
in
connection
with
the
preparation,
negotiation,
execution,
delivery
and
performance
of
this
Agreement
or
the
other
Transaction Documents or the transactions contemplated thereunder, and (c) each Purchaser
(other
than
YP)
should,
if
it
wishes
counsel
with
respect
to
the
preparation,
negotiation,
execution,
delivery
and
performance
of
this
Agreement
or
the
other
Transaction
Documents
or
the
transactions
contemplated
thereunder,
retain
its
own
independent
counsel
with
respect
thereto.
[Remainder of page intentionally left blank. Signature pages to follow.]
-29-
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES
ISSUABLE
UPON
EXERCISE
OF THE
SECURITIES
EVIDENCED
BY
THIS
CERTIFICATE
HAVE
NOT
BEEN
REGISTERED
UNDER
THE
SECURITIES
ACT
OF
1933,
AS
AMENDED,
AND
MAY
NOT
BE
TRANSFERRED
EXCEPT
UPON
DELIVERY
TO
THE
CORPORATION
OF
AN
OPINION
OF
COUNSEL
SATISFACTORY
IN
FORM
AND
SUBSTANCE
TO
IT
THAT
SUCH
TRANSFER
WILL NOT VIOLATE THE SECURITIES ACT OF 1933, AS AMENDED
THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN.
MediJane Holdings Inc.
Warrant for the Purchase of Shares of Common Stock,
par value $0.001 per Share
No. W-
[
●
]
[
●
]
Shares
THIS
CERTIFIES
that,
for
value
received,
[
●
]
,
whose
address
is
[
●
]
(the
“
Holder
”
),
is
entitled
to
subscribe
for
and
purchase
from
MediJane
Holdings
Inc.,
a
Nevada
corporation
(the
“
Company
”
), upon the terms and conditions set forth herein,
[
●
]
shares of
the
Company
’
s
Common
Stock,
par
value
$0.001
per
share
(
“
Common
Stock
”
),
at
a
price
of
$0.20
per
share
(the
“
Exercise
Price
”
).
As
used
herein
the
term
“
this
Warrant
”
shall
mean
and
include
this
Warrant
and
any Common
Stock
or
Warrants
hereafter
issued
as
a
consequence
of
the
exercise
or transfer of this Warrant in whole or in part.
The
number
of
shares
of
Common
Stock
issuable
upon
exercise
of
the
Warrants
(the
“
Warrant
Shares
”
)
and
the
Exercise
Price
may
be
adjusted
from
time
to
time
as
hereinafter
set
forth.
The Warrant
Shares
are entitled
to
the
benefits,
and
subject to the obligations, set forth in
the
Registration
Rights
Agreement
among
the
Company,
the
Holder
and
certain
other
parties
dated concurrently
herewith (the
“
Registration Rights Agreement
”
).
1.
Exercise
Price
and
Exercise
Period.
This
Warrant
may be
exercised
at
any time
or from time to time during the period commencing at
10:00 a.m. Mountain Time on September
[
●
]
,
2014, and
ending
at 5:00 p.m.
Mountain Time
on September
[
●
]
,
2019 (the
“
Exercise
Period
”
).
2.
Procedure for Exercise; Effect of Exercise.
(a)
Cash Exercise. This Warrant may
be exercised, in whole or in part, by
the Holder
during normal business hours on any business day during the Exercise Period by (i) the
presentation
and
surrender
of
this
Warrant
to
the
Company
at
its
principal
office
along
with
a
1
duly executed Notice of Exercise (in the form attached to this Agreement) specifying the
number
of
Warrant
Shares
to
be
purchased,
and
(ii)
delivery of
payment
to
the
Company of
the
Exercise
Price
for
the
number
of
Warrant
Shares
specified
in
the
Notice
of
Exercise
by
cash,
wire transfer
of
immediately available
funds
to a bank account specified by the Company, or by
certified or bank cashier
’
s check.
(b)
Cashless
Exercise.
This
Warrant
may also
be
exercised
by the
Holder
through
a
cashless exercise, as described in this Section 2(b). In such case, this Warrant may be exercised,
in
whole
or
in
part,
by the
Holder
during normal
business
hours
on
any business
day during the
Exercise Period by the presentation and surrender of this Warrant to the Company at its
principal office along with a duly executed Notice of Exercise specifying the number of
Warrant
Shares
to
be
applied
to
such
exercise.
The
number
of
shares
of
Common
Stock
to
be
issues
upon
exercise
of
this
Warrant
pursuant
to
this
Section
2(b)
shall
equal
the
value
of
this
Warrant
(or
the
portion
thereof
being
canceled)
computed
as
of
the
date
of
delivery
of
this
Warrant to the Company
using the following formula:
X =
Y(A-B)
A
Where:
X
=
the
number
of
shares
of
Common
Stock
to
be
issued
to
Holder
under
this
Section 2(b);
Y = the number of Warrant Shares identified in the Notice of Exercise as being
applied to the subject exercise;
A = the Current Market Price on such date; and
B = the Exercise Price on such date
For
purposes
of
this
Section
2(b),
Current
Market
Price
shall
have
the
definition
provided
in
Section 6(g).
The
Company
acknowledges
and
agrees
that
this
Warrant
was
issued
on
the
date
set
forth
at
the
end
of
this
Warrant.
Consequently,
the
Company
acknowledges
and
agrees
that,
if
the
Holder
conducts
a
cashless
exercise
pursuant
to
this
Section
2(b),
the
period
during
which
the
Holder
held
this
Warrant
may,
for
purposes
of
Rule
144
promulgated
under
the
Securities
Act
of
1933,
as
amended
(the
“
Securities
Act
”
),
be
“
tacked
”
to
the
period
during
which
the
Holder holds the Warrant Shares received upon such cashless exercise.
Notwithstanding
the
foregoing,
the
Holder
may
conduct
a
cashless
exercise
pursuant
to
this
Section
2(b)
only
after
the
six
(6)
month
anniversary
of
the
initial
issuance
date
of
this
Warrant,
and
then
only
in
the
event
that
a
registration
statement
covering
the
resale
of
the
Warrant
Shares
is
not
then
effective
at
the
time
that
the
Holder
wishes
to conduct such cashless
exercise.
2
(c)
Effect
of
Exercise.
Upon
receipt
by
the
Company
of
this
Warrant
and
a
Notice
of
Exercise,
together
with
proper
payment
of
the
Exercise
Price,
as
provided
in
this
Section
2,
the
Company agrees
that
such
Warrant
Shares
shall be deemed to be issued to the Holder as the
record
holder
of
such
Warrant
Shares
as
of
the
close
of
business
on
the
date
on
which
this
Warrant
has
been
surrendered
and
payment
has
been
made
for
such
Warrant
Shares
in
accordance
with
this
Agreement
and
the
Holder
shall
be
deemed
to
be
the
holder
of
record
of
the
Warrant
Shares,
notwithstanding that
the
stock
transfer
books
of
the
Company shall
then
be
closed
or
that
certificates
representing
such
Warrant
Shares
shall
not
then
be
actually delivered
to the Holder. A stock certificate or certificates for the Warrant Shares specified in the Notice of
Exercise
shall
be
delivered
to
the
Holder
as
promptly
as
practicable,
and
in
any
event
within
seven
(7)
business
days,
thereafter.
The
stock
certificate(s)
so
delivered
shall
be
in
any
such
denominations
as
may
be
reasonably
specified
by
the
Holder
in
the
Notice
of
Exercise.
If
this
Warrant should be exercised in part only, the Company
shall, upon surrender of this Warrant for
cancellation,
execute
and
deliver
a
new
Warrant
evidencing
the
right
of
the
Holder
to
purchase
the balance of the Warrant Shares subject to purchase hereunder.
3.
Registration
of
Warrants;
Transfer
of
Warrants.
Any
Warrants
issued
upon
the
transfer or exercise in part of
this
Warrant shall be
numbered
and
shall be
registered
in a
Warrant Register as they are issued. The Company shall be entitled to treat the registered holder
of
any
Warrant
on
the
Warrant
Register
as
the
owner
in
fact
thereof
for
all
purposes
and
shall
not be bound to recognize any equitable or other claim to or interest in such Warrant on the part
of any other person, and shall not be liable for any registration or transfer of Warrants which are
registered
or
to
be
registered
in
the
name
of
a
fiduciary
or
the
nominee
of
a
fiduciary
unless
made
with
the
actual
knowledge
that
a
fiduciary
or
nominee
is
committing
a
breach
of
trust
in
requesting such registration or transfer, or with the knowledge of such facts that its participation
therein amounts to bad faith. This Warrant shall be transferable only
on the books of the
Company
upon
delivery
thereof
duly
endorsed
by
the
Holder
or
by
its
duly authorized
attorney
or
representative,
or
accompanied
by proper
evidence of
succession,
assignment,
or
authority to
transfer.
In
all
cases
of
transfer
by an
attorney,
executor,
administrator,
guardian,
or
other legal
representative,
duly
authenticated
evidence
of
his
or
its
authority shall
be
produced.
Upon
any
registration
of
transfer,
the
Company
shall
deliver
a
new
Warrant
or
Warrants
to
the
person
entitled thereto. This Warrant may
be exchanged, at the option of the Holder thereof, for another
Warrant,
or
other
Warrants
of
different
denominations,
of
like
tenor
and
representing
in
the
aggregate
the
right
to
purchase
a
like number of
Warrant
Shares,
upon
surrender
to
the
Company
or its duly
authorized agent.
4.
Restrictions on Transfer. (a)
The
Holder,
as
of
the
date
of
issuance
hereof,
represents
to
the
Company
that
such
Holder
is
acquiring
the
Warrants
for
its
own
account
for
investment
purposes
and
not
with
a
view
to
the
distribution
thereof
or
of
the
Warrant
Shares.
Notwithstanding
any
provisions
contained
in
this
Warrant
to
the
contrary,
this
Warrant
and
the
related
Warrant
Shares
shall
not
be
transferable
except
pursuant
to
the
proviso
contained
in
the
following
sentence
or
upon
the
conditions
specified
in
this
Section
4,
which
conditions
are
intended, among other things, to insure compliance with the provisions of the Securities Act and
applicable
state
law
in
respect
of
the
transfer
of
this
Warrant
or
such
Warrant
Shares.
The
3
Holder by acceptance of this Warrant agrees that the Holder will not transfer this Warrant or the
related
Warrant
Shares
prior
to
delivery
to
the
Company
of
an
opinion
of
the
Holder
’
s
counsel
(as
such
opinion
and
such
counsel
are
described
in
Section
4(b)
hereof)
or
until
registration
of
such
Warrant Shares
under
the
Securities
Act
has
become
effective
or
after
a
sale of
such
Warrant
or
Warrant
Shares
has
been
consummated
pursuant
to
Rule
144
or
Rule
144A
under
the
Securities
Act;
provided,
however
,
that
the
Holder
may
freely
transfer
this
Warrant
or
such
Warrant
Shares
(without
delivery
to
the
Company
of
an
opinion
of
counsel)
(i)
to
one
of
its
nominees, affiliates or a nominee thereof, (ii) to a pension or profit-sharing fund established and
maintained
for
its
employees
or
for
the
employees
of
any affiliate,
(iii)
from
a
nominee
to
any
of
the
aforementioned
persons
as
beneficial
owner
of
this
Warrant
or
such
Warrant
Shares,
or
(iv)
to
a
qualified
institutional
buyer,
so
long
as
such
transfer
is
effected
in
compliance
with
Rule 144A under the Securities Act.
(b)
The
Holder,
by
its
acceptance
hereof,
agrees
that
prior
to
any
transfer
of
this
Warrant
or
of
the
related
Warrant
Shares
(other
than
as
permitted
by
Section
4(a)
hereof
or
pursuant
to
a
registration
under
the
Securities
Act),
the
Holder
will
give
written
notice
to
the
Company of its intention to effect such transfer, together with an opinion of such counsel for the
Holder as shall be reasonably
acceptable to the Company, to the effect that the proposed transfer
of
this
Warrant
and/or
such
Warrant
Shares
may
be
effected
without
registration
under
the
Securities
Act.
Upon
delivery
of
such
notice
and
opinion
to
the
Company,
the
Holder
shall
be
entitled
to
transfer
this
Warrant
and/or
such
Warrant
Shares
in
accordance
with
the
intended
method of disposition specified in the notice to the Company.
(c)
Each
stock
certificate
representing
Warrant
Shares
issued
upon
exercise
or
exchange
of
this
Warrant
shall
bear
the
following
legend
unless
the
opinion
of
counsel
referred
to in Section 4(b) states such legend is not required:
“
THE
SECURITIES
EVIDENCED
BY
THIS
CERTIFICATE
HAVE
NOT
BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE TRANSFERRED EXCEPT UPON DELIVERY TO THE
CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY IN FORM AND
SUBSTANCE TO IT THAT SUCH TRANSFER WILL
NOT VIOLATE THE
SECURITIES ACT OF 1933, AS AMENDED.
”
The
Holder
understands
that
the
Company
may
place,
and
may
instruct
any
transfer
agent
or
depository
for
the
Warrant
Shares
to
place,
a
stop
transfer
notation
in
the
securities
records
in
respect of the Warrant Shares.
5.
Reservation of Shares. The Company shall at all times during the Exercise
Period
reserve
and
keep
available
out
of
its
authorized
and
unissued
Common
Stock,
solely for
the
purpose
of
providing
for
the
exercise
of
the
rights
to
purchase
all
Warrant
Shares
granted
pursuant
to
the
Warrants,
such
number
of
shares
of
Common
Stock
as
shall,
from
time
to
time,
be
sufficient
therefor.
The Company covenants
that
all
shares
of
Common
Stock
issuable
upon
exercise
of
this
Warrant,
upon
receipt
by
the
Company
of
the
full
Exercise
Price
therefor,
and
4
all
shares
of
Common
Stock
issuable
upon
conversion
of
this
Warrant,
shall
be
validly
issued,
fully
paid, non-assessable, and free of preemptive rights.
6.
Exercise
Price
Adjustments. The
Exercise
Price
shall
be
subject
to
adjustment
from time to time as follows:
(a)
(i)
In the event that the Company shall (A) pay a dividend or make a
distribution
to
all
its
stockholders,
in
shares
of
Common
Stock,
on
any class
of
capital
stock
of
the
Company or
any subsidiary which
is
not
directly or
indirectly wholly owned
by the
Company, (B) split or subdivide its outstanding Common Stock into a greater number of shares,
or
(C)
combine
its
outstanding
Common
Stock
into
a
smaller
number
of
shares,
then
in
each
such
case
the
Exercise
Price
in
effect
immediately
prior
thereto
shall
be
adjusted
so
that
the
Holder
of
a
Warrant
thereafter
surrendered
for
Exercise
shall
be
entitled
to
receive
the
number
of shares of Common Stock that such Holder would
have
owned
or
have
been
entitled
to
receive after the occurrence of any
of the events described above had such Warrant been
exercised
immediately
prior
to
the
occurrence
of
such
event.
An
adjustment
made
pursuant
to
this
Section
6(a)(i)
shall
become
effective
immediately after
the
close
of
business
on
the
record
date
in
the
case
of
a
dividend
or
distribution
(except
as
provided
in
Section
6(e)
below)
and
shall
become
effective
immediately
after
the
close
of
business
on
the
effective
date
in
the
case
of
such
subdivision,
split
or
combination,
as
the
case
may
be.
Any
shares
of
Common
Stock
issuable
in
payment
of
a
dividend
shall
be deemed
to
have been
issued immediately prior to the
close of business on the record date for such dividend for purposes of calculating the number of
outstanding shares of Common Stock under clause (ii) below.
(ii)
In
the
event
that
the
Company
shall
commit
to
issue
or
distribute
New
Securities
(as
defined
in
the
Securities
Purchase
Agreement,
of
even
date
herewith,
among
the
Company,
the
Holder
and
certain
other
Purchasers
named
therein),
in
any
such
case
at
a
price
per share less than the Current Market Price per share on the earliest of (A) the date the
Company
shall
enter
into
a
firm
contract
for
such
issuance
or
distribution,
(B)
the
record
date
for
the
determination
of
stockholders
entitled
to
receive
any such
New
Securities,
if
applicable,
or
(C)
the
date
of
actual
issuance
or
distribution
of
any
such
New
Securities
(provided
that
the
issuance of Common Stock upon the exercise of New Securities that are rights, warrants,
options
or
convertible
or
exchangeable
securities
(
“
New
Derivative
Securities
”
)
will
not
cause
an
adjustment
in
the
Exercise
Price
if
no
such
adjustment
would
have been
required
at
the
time
such
New
Derivative
Security
was
issued),
then
the
Exercise
Price
in
effect
immediately
prior
to
such
earliest date shall be adjusted so that the Exercise Price shall equal the price determined
by multiplying the Exercise Price in effect immediately prior to such earliest date by the
fraction:
(x) whose numerator shall be (I) the number of shares of Common Stock outstanding
on
such
date
plus
(II)
the
number
of
shares
of
Common
Stock
which
the
aggregate
offering
price
of
the
total
number
of
New
Securities
so
offered
would
have
purchased
at such
Current Market Price (such
amount,
with
respect
to
any
New
Derivative
Securities,
determined
by multiplying the
total
number of
shares
of
5
Common
Stock
subject
thereto
by
the
exercise
price
of
such
New
Derivative
Securities, and dividing the product so obtained by such Current Market Price), and
(y)
whose
denominator
shall
be
(I)
the
number
of
shares
of
Common
Stock
outstanding on such date
plus
(II) the number of additional shares of Common Stock
to
be
issued
or
distributed
or
receivable
upon
exercise
of
any
such
New
Derivative
Security.
Such
adjustment
shall
be
made
successively
whenever
any
such
New
Securities
are
issued.
In
determining whether any New Derivative Securities entitle the holders to subscribe for or
purchase
shares
of
Common
Stock
at
less
than
such
Current
Market
Price,
and
in
determining
the
aggregate
offering
price
of
shares
of
Common
Stock
so
issued,
there
shall
be
taken
into
account any consideration received by
the Company
for such Common Stock or New Derivative
Securities,
the
value
of
such
consideration,
if
other
than
cash,
to
be determined
by the
Board
of
Directors,
whose
determination
shall
be
conclusive
and
described
in
a
certificate
filed
with
the
records
of
corporate
proceedings
of
the
Company.
If
any
New
Derivative
Security
to
purchase
or acquire Common Stock, the issuance of which resulted in an adjustment in the Exercise Price
pursuant to this subsection (ii) shall expire and shall not have been exercised, the Exercise Price
shall
immediately upon
such
expiration
be
recomputed
to
the
Exercise
Price
which
would
have
been
in
effect
had
the
adjustment
of
the
Exercise
Price
made
upon
the
issuance
of
such
New
Derivative Security been made on the basis of offering for subscription, purchase or issuance, as
the
case
may
be,
only
of
that
number
of
shares
of
Common
Stock
actually purchased
or
issued
upon the actual exercise of such New Derivative Security.
(iii) No
adjustment
in
the
Exercise
Price
shall
be
required
unless
the
adjustment
would
require
an
increase
or
decrease
of
at
least
1%
in
the
Exercise
Price
then
in
effect;
provided, however,
that any
adjustments that by
reason of this
Section
6(a)
are
not
required
to
be
made
shall
be
carried
forward
and
taken
into
account
in
any subsequent
adjustment.
All
calculations
under
this Section 6(a) shall be made to the nearest cent or nearest
1/100th of a share.
(iv)
The
Company
from
time
to
time
may
reduce
the
Exercise
Price
by
any
amount for any period of time in the discretion of the Board of Directors. A voluntary reduction
of the Exercise Price does not change or adjust the Exercise Price otherwise in effect for
purposes of this Section 6(a).
(v)
In
the
event
that,
at
any
time
as
a
result
of
an
adjustment
made
pursuant
to
Sections
6(a)(i)
through
6(a)(iii)
above,
the
Holder
of
any Warrant
thereafter
surrendered
for
exercise
shall
become
entitled
to
receive
any
shares
of
the
Company
other
than
shares
of
the
Common
Stock,
thereafter
the
number
of
such
other
shares
so
receivable
upon
exercise
of
any
such
Warrant
shall
be
subject
to
adjustment
from
time
to
time
in
a
manner
and
on
terms
as
nearly
equivalent
as
practicable
to
the
provisions
with
respect
to
the
Common
Stock
contained
in
Sections
6(a)(i)
through
6(a)(iv)
above,
and
the
other
provisions
of
this
Section
6(a)
with
respect to the Common Stock shall apply
on like terms to any
such other shares.
6
(b)
In
case
of
any
reclassification
of
the
Common
Stock
(other
than
in
a
transaction
to
which
Section
6(a)(i)
applies),
any
consolidation
of
the
Company
with,
or
merger
of
the
Company
into,
any
other
entity,
any
merger
of
another
entity
into
the
Company
(other
than
a
merger that does not result in any
reclassification, conversion, exchange or cancellation
of
outstanding
shares
of
Common
Stock
of
the
Company),
any
sale
or
transfer
of
all
or
substantially
all
of
the
assets
of
the
Company
or
any
compulsory
share
exchange,
pursuant
to
which share exchange the Common Stock is converted into other securities, cash or other
property,
then
lawful
provision
shall
be
made
as
part
of
the
terms
of
such
transaction
whereby
the
Holder
of
a
Warrant
then
outstanding
shall
have
the
right
thereafter,
during
the
period
such
Warrant
shall
be
exercisable,
to
exercise such Warrant only for the kind and amount of
securities,
cash
and
other
property
receivable
upon
the
reclassification,
consolidation,
merger,
sale,
transfer
or
share
exchange
by
a
holder
of
the
number
of
shares
of
Common
Stock
of
the
Company
into
which
a
Warrant
might
have
been
able
to
exercise
for
immediately
prior
to
the
reclassification, consolidation, merger, sale, transfer or share exchange assuming that such
holder of Common Stock failed to exercise rights of election, if any, as to the kind or amount of
securities,
cash
or
other
property
receivable
upon
consummation
of
such
transaction
subject
to
adjustment
as
provided
in Section
6(a)
above
following
the
date
of
consummation
of
such
transaction.
The
provisions
of
this
Section
6(b) shall
similarly apply to
successive
reclassifications, consolidations, mergers, sales, transfers or share exchanges.
(c)
If:
(i)
the Company shall take any action which would require an
adjustment in the Exercise Price pursuant to Section 6(a); or
(ii)
the
Company
shall
authorize
the
granting
to
the
holders
of
its
Common
Stock
generally
of
rights,
warrants
or
options
to
subscribe
for
or
purchase
any
shares
of
any
class
or
any
other
rights, warrants or options; or
(iii)
there
shall be
any
reclassification
or
change
of
the
Common
Stock
(other
than
a
subdivision
or
combination
of
its
outstanding
Common
Stock
or
a
change
in
par
value)
or
any
consolidation,
merger
or
statutory
share
exchange
to
which
the
Company is
a
party and
for
which
approval
of
any stockholders
of the Company
is required,
or
the
sale
or
transfer
of
all or
substantially
all of the assets of the Company; or
(iv)
there
shall
be a voluntary or
involuntary dissolution,
liquidation
or winding up of the Company;
then,
in
each
such
case,
the
Company
shall
cause
to
be
filed
with
the
transfer
agent
for
the
Warrants
and
shall
cause
to
be
mailed
to
each
Holder
at
such
Holder
’
s
address
as
shown
on
the
7
books
of
the
transfer
agent
for
the
Warrants,
as
promptly as
possible,
but
at
least
30
days
prior
to
the
applicable
date
hereinafter
specified,
a
notice
stating
(A)
the
date
on
which
a
record
is
to
be taken for the purpose of such dividend, distribution or granting of rights, warrants or options,
or, if a record is not to be taken, the date as of which the holders of Common Stock of record to
be
entitled
to
such
dividend,
distribution
or
rights,
warrants
or
options
are
to
be
determined,
or
(B) the date on which such reclassification, change, consolidation, merger, statutory share
exchange,
sale,
transfer,
dissolution,
liquidation
or
winding-up
is
expected
to
become
effective
or
occur,
and
the
date
as
of
which
it
is
expected
that
holders
of
Common
Stock
of
record
shall
be
entitled
to
exchange
their
shares
of
Common
Stock
for
securities
or
other
property
deliverable
upon
such
reclassification,
change,
consolidation,
merger,
statutory share
exchange,
sale,
transfer,
dissolution,
liquidation
or
winding
up.
Failure
to
give
such
notice
or
any
defect
therein shall not affect the legality
or validity
of the proceedings described in this Section 6(c).
(d)
Whenever
the
Exercise
Price
is
adjusted
as
herein
provided,
the
Company
shall
promptly file
with
the
transfer
agent
for
the
Warrants
a certificate
of
an
officer
of
the
Company
setting
forth
the
Exercise
Price
after
the
adjustment
and
setting
forth
a
brief
statement
of
the
facts
requiring such
adjustment
and
a
computation
thereof.
The Company shall
promptly cause
a notice of the adjusted Exercise Price to be mailed to each Holder.
(e)
In any
case in which Section 6(a) provides that an
adjustment
shall become
effective
immediately
after
a
record
date
for
an
event
and
the
date
fixed
for
such
adjustment
pursuant
to
Section
6(a)
occurs
after
such
record
date
but
before
the
occurrence
of
such
event,
the Company may defer until the actual occurrence of such event (i) issuing to the Holder of any
Warrants exercised after such record date and before the occurrence of such event the additional
shares
of
Common
Stock
issuable
upon
such
conversion
by
reason
of
the
adjustment
required
by
such
event
over
and
above
the
Common
Stock
issuable
upon
such
exercise
before
giving
effect
to
such
adjustment,
and
(ii)
paying
to
such
holder
any
amount
in
cash
in
lieu
of
any
fraction pursuant to Section 6(i).
(f)
In
case
the
Company
shall
take
any
action
affecting
the
Common
Stock,
other
than
actions
described
in
this
Section
6,
which
in
the
opinion
of
the
Board
of
Directors
would
materially adversely affect the exercise right of the Holders, the Exercise Price may be adjusted,
to the
extent
permitted
by
law,
in such
manner,
if
any,
and
at such
time,
as
the
Board
of
Directors
may
determine
to
be
equitable
in
the
circumstances;
provided,
however,
that
in
no
event shall the Board of Directors be required to take any
such action.
(g)
For
the
purpose
of
any
computation
under
Section
2(b)
or
this
Section
6,
the
“
Current
Market
Price
”
per
share
of
Common
Stock
on
any
day
shall
mean:
(i) if
the
principal
trading market
for such
securities
is
a national
or regional securities exchange, the closing price
on
such
exchange
on
such
day;
or
(ii) if
sales
prices
for
shares
of
Common
Stock
are
reported
by
the
NASDAQ
National
Market
System
(or
a
similar
system
then
in
use),
the
last
reported
sales price (regular way) so reported on such day; or (iii) if neither (i) nor (ii) above are
applicable,
and
if
bid
and
ask
prices
for
shares
of
Common
Stock
are
reported
in
the
over-the-
counter
market
by
NASDAQ
(or,
if
not
so
reported,
by
the
National
Quotation
Bureau),
the
8
average of the high bid and low ask prices so reported on such day. Notwithstanding the
foregoing, if there is no reported closing price, last reported sales price, or bid and ask prices, as
the case may be, for the day in question, then the Current Market Price shall be determined as of
the latest date prior to such day
for which such closing price, last reported sales price, or bid and
ask
prices,
as
the
case
may
be,
are
available,
unless
such
securities
have
not
been
traded
on
an
exchange
or
in
the
over-the-counter
market
for
30
or
more days
immediately prior to
the
day in
question,
in
which
case
the
Current
Market
Price
shall
be
determined
in
good
faith
by,
and
reflected in a formal resolution of, the Board of Directors of the Company.
(h)
Upon
each
adjustment
of
the
Exercise
Price,
this
Warrant
shall
thereafter
evidence
the
right
to
purchase,
at
the
adjusted
Exercise
Price,
that
number
of
shares
(calculated
to the
nearest
thousandth)
obtained
by
dividing
(i)
the
product
obtained
by
multiplying
the
number
of
shares
purchasable
upon
exercise
of
this
Warrant
prior
to
adjustment
of
the
number
of
shares
by
the
Exercise
Price
in
effect
prior
to
adjustment
of
the
Exercise
Price,
by
(ii)
the
Exercise Price in effect after such adjustment of the Exercise Price.
(i)
The Company
shall not be required to issue fractions of shares of
Common
Stock
or
other
capital
stock
of
the
Company
upon
the
exercise
of
this
Warrant.
If
any fraction
of
a
share
would
be
issuable
on
the
exercise
of
this
Warrant
(or
specified
portions
thereof),
the
Company
shall
purchase
such
fraction
for
an
amount
in
cash
equal
to
the
same
fraction
of
the
Current Market Price of such share of Common Stock on the date of exercise of this Warrant.
7.
Transfer
Taxes.
The
issuance
of
any
shares
or
other
securities
upon
the
exercise
of
this
Warrant,
and
the
delivery of
certificates
or
other instruments
representing such
shares
or
other
securities,
shall
be
made
without
charge
to
the
Holder
for
any
tax
or
other
charge
in
respect
of
such
issuance.
The
Company
shall
not,
however,
be
required
to
pay
any
tax
which
may be
payable
in
respect
of
any transfer
involved
in
the
issue and
delivery of
any certificate in
a
name
other
than
that
of
the
Holder
and
the
Company shall
not
be
required
to
issue
or
deliver
any such certificate unless and until the person or persons requesting the issue thereof shall have
paid
to
the
Company
the
amount
of
such
tax
or
shall
have
established
to
the
satisfaction
of
the
Company
that such tax has been paid.
8.
Loss
or
Mutilation
of
Warrant.
Upon
receipt
of
evidence
reasonably satisfactory
to the Company of the loss, theft, destruction, or mutilation of any Warrant (and upon surrender
of
any
Warrant
if
mutilated),
and
upon
reimbursement
of
the
Company
’
s
reasonable
incidental
expenses,
the
Company
shall
execute
and
deliver
to
the
Holder
thereof
a
new
Warrant
of
like
date, tenor, and denomination.
9.
No
Rights
as
a
Stockholder.
The Holder of any Warrant shall not have, solely on
account of such status, any rights of a stockholder of the Company, either at law or in equity, or
to any notice of meetings of stockholders or of any
other proceedings of the Company, except as
provided in this Warrant.
9
10.
Governing Law.
This
Warrant
shall
be construed in accordance with the laws of
the State of Texas applicable to contracts made and performed within such State, without regard
to principles of conflicts of law.
Dated: September
[
●
]
, 2014
MEDIJANE HOLDINGS INC.
By:
Ronald Lusk,
President &
Chief Executive Officer
10
FORM OF ASSIGNMENT
(To be executed by
the registered holder if such holder desires to transfer the attached Warrant.)
FOR VALUE RECEIVED,
hereby sells,
assigns,
and
transfers
unto
__________________
a
Warrant
to
purchase
__________
shares
of
Common
Stock,
par
value
$0.001
per
share,
of
MediJane
Holdings
Inc.,
a
Nevada
corporation
(the
“
Company
”
),
together
with
all
right,
title,
and
interest
therein,
and
does
hereby irrevocably
constitute and appoint
attorney to transfer such Warrant
on the books of the Company, with full power of substitution.
Dated:
By:
Signature
The signature on the foregoing Assignment must correspond to the name as written upon
the
face
of
this
Warrant
in
every
particular,
without
alteration
or
enlargement
or
any
change
whatsoever.
To:
MediJane Holdings Inc.
2011 Ken Pratt Boulevard, Suite 300
Longmont, Colorado 80501
Attention: President
NOTICE OF EXERCISE
The
undersigned
hereby
exercises
his
or
its
rights
to
purchase
_______
Warrant
Shares
covered
by
the
within
Warrant
and
tenders
payment
herewith
in
the
amount
of
$_________
by
[tendering
cash
or
delivering
a
certified
check
or
bank
cashier
’
s
check,
payable
to
the
order
of
the
Company]
[surrendering
______
shares
of
Common
Stock
received
upon
exercise
of
the
attached
Warrant,
which
shares
have
a
Current
Market
Price
equal
to
such
payment]
in
accordance
with
the
terms
thereof,
and
requests
that
certificates
for
such
securities
be
issued
in
the name of, and delivered to:
_______________________________________
_______________________________________
_______________________________________
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the Warrant Shares covered by
the within
Warrant, that a new Warrant for the
balance
of
the
Warrant Shares
covered
by
the
within
Warrant
be
registered
in
the
name
of,
and
delivered
to,
the
undersigned
at
the
address
stated
below.
Dated:
By:
Print Name
Signature
Address:
EXHIBIT C
FORM OF OPINION
1.
The
Company
is
a
corporation
duly
incorporated,
validly
existing
and
in
good
standing
under
the
laws
of
the
State
of
Nevada
and
has
the
requisite
corporate
power
to
own,
lease
and
operate
its
properties
and
assets,
and
to
carry
on
its
business
as
presently
conducted.
The Company is duly qualified as a foreign
corporation to do business and is in good standing in
every jurisdiction in which the failure to so qualify would have a Material Adverse Effect.
2.
The
Company
has
the
requisite
corporate
power
and
authority
to
enter
into
and
perform
its
obligations
under
the
Transaction
Documents
and
to
issue
the
Shares,
the
Warrants,
and
the
Warrant
Shares.
The
execution,
delivery
and
performance
of
each
of
the
Transaction
Documents by the Company and the consummation by it of the transactions contemplated
thereby
have
been
duly
and
validly
authorized
by
all
necessary
corporate
action
and
no
further
consent or authorization
of
the Company
or its
Board
of
Directors is required. Each of the
Transaction
Documents
have been duly executed
and delivered, and
the Shares
and the Warrants
have
been
duly
executed,
issued
and
delivered
by
the
Company
and
each
of
the
Transaction
Documents
constitutes
a
legal,
valid
and
binding
obligation
of
the
Company
enforceable
against
the
Company in
accordance
with
its
respective terms.
Neither
the
Shares
nor
the
Warrant
Shares
are subject to any preemptive rights under the Articles or the Bylaws.
3.
The
Shares
have
been
duly
authorized
and,
when
delivered
against
payment
in
full
as
provided
in
the
Purchase
Agreement,
will
be validly issued,
fully paid
and
nonassessable.
The
Warrant
Shares
have
been
duly
authorized
and
reserved
for
issuance,
and,
when
delivered
upon exercise or against payment in full as provided
in the Warrants, will be validly issued, fully
paid and nonassessable.
4.
The execution,
delivery and
performance of
and
compliance with
the
terms
of
the
Transaction
Documents
and
the
issuance
of
the
Shares,
the
Warrants
and
the
Warrant
Shares
do
not
(a) violate
any
provision
of
the
Articles
or
Bylaws,
(b)
conflict
with,
or
constitute
a
default
(or an event which with notice or lapse of time or both would become a default) under, or give to
others
any rights
of
termination,
amendment,
acceleration
or
cancellation
of,
any material
agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or
obligation to which the Company is a party and which is known to us, (c) create or impose a lien,
charge
or
encumbrance
on
any
property
of
the
Company
under
any
agreement
or
any
commitment known to us to which the Company is a party or by which the Company is bound or
by
which
any
of
its
respective
properties
or
assets
are
bound,
or
(d)
result
in
a
violation
of
any
Federal,
state,
local
or
foreign
statute,
rule,
regulation,
order,
judgment,
injunction
or
decree
(including
Federal
and
state
securities
laws
and
regulations)
applicable
to
the
Company
or
by
which
any
property or
asset
of
the
Company is
bound
or
affected,
except,
in
all
cases
other
than
violations
pursuant
to
clauses
(a)
and
(d)
above,
for
such
conflicts,
default,
terminations,
amendments, acceleration, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect.
C-1
5.
No
consent,
approval
or
authorization
of
or
designation,
declaration
or
filing
with
any
governmental
authority
on
the
part
of
the
Company
is
required
under
Federal,
state
or
local
law,
rule
or
regulation
in
connection
with
the
valid
execution,
delivery
and
performance
of
the
Transaction Documents, or the offer, sale or issuance of the Shares, the Warrants
and the
Warrant
Shares,
other
than
filings
as
may
be
required
by
applicable
Federal
and
state
securities
laws and regulations, the FINRA rules and regulations or as required by
the OTC Markets
Group.
6.
To
our
knowledge,
there
is no
action,
suit,
claim, investigation
or
proceeding
pending or threatened
against the Company which questions the validity of the Agreement or the
transactions
contemplated
thereby
or
any
action
taken
or
to
be
taken
pursuant
thereto.
To
our
knowledge,
other
than
as
set
forth
in
the
Schedules
or
the
Commission
Documents,
there
is
no
action,
suit,
claim,
investigation
or
proceeding
pending,
or
threatened,
against
or
involving
the
Company
or
any
of
its
properties
or
assets
and
which,
if
adversely
determined,
is
reasonably
likely to
result in a Material Adverse Effect.
To
our knowledge,
there are no outstanding orders,
judgments,
injunctions,
awards
or
decrees
of
any
court,
arbitrator
or
governmental
or
regulatory
body
against
the
Company
or
any
officers
or
directors
of
the
Company
in
their
capacities
as
such.
7.
The offer, issuance and sale of the Shares
and the Warrants
to the Purchasers, and
the offer, issuance and sale of the Warrant Shares
to the Purchasers pursuant to the Warrants, are
exempt from the registration requirements of the Securities Act of 1933, as amended.
C-2
REGISTRATION RIGHTS AGREEMENT
This
Registration
Rights
Agreement
(this
“
Agreement
”
)
is
made
and
entered
into
as
of
September
16,
2014,
by
and
among
MediJane
Holdings
Inc.,
a
Nevada
corporation
(the
“
Company
”
),
and
the
persons
and
entities
listed
on
Exhibit
A
hereto
(each,
a
“
Purchaser
”
and,
collectively, the
“
Purchasers
”
).
WHEREAS,
upon
the
terms
and
subject
to
the
conditions
of
the
Securities
Purchase
Agreement,
dated
as
of
the
date
hereof
(the
“
Purchase
Agreement
”
),
the
Company
has
agreed
to
issue
and
sell
shares
of
its
Common
Stock
and
Warrants
to
purchase
shares
of
its
Common Stock to the Purchasers; and
WHEREAS,
to
induce
the
Purchasers
to
execute
and
deliver
the
Purchase
Agreement
and
to
purchase
the
Shares
and
the
Warrants,
the
Company
has
agreed
to
provide
certain
registration
rights
under
the
Securities
Act
of
1933,
as
amended,
with
respect
to
the
Shares, the Warrants and the Warrant Shares (each as respectively defined in the Purchase
Agreement).
NOW,
THEREFORE,
in
consideration
of
the representations,
warranties
and
agreements
contained
herein
and
other
good
and
valuable
consideration,
the
receipt
and
legal
adequacy
of
which
are
hereby
acknowledged
by
the
parties,
the
Company
and
the
Purchasers
hereby agree as follows:
1.
Definitions.
Capitalized
terms
used
but
not
otherwise
defined
herein
shall
have
the
meanings
given
such
terms
in
the
Purchase
Agreement. As
used
in
this
Agreement,
the
following
terms
shall have the following meanings:
“
Affiliate
”
means,
with
respect
to
any
Person,
any
other
Person
that
directly
or
indirectly
controls or
is controlled
by
or
under common
control
with such
Person.
For
the
purposes
of
this
definition,
“
control,
”
when
used
with
respect
to
any
Person,
means
the
possession, direct or indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or
otherwise; and the terms
“
affiliated,
”
“
controlling
”
and
“
controlled
”
have meanings correlative to
the foregoing.
“
Blackout Period
”
shall have the meaning set forth in Section 3(m).
“
Board
”
shall have the meaning set forth in Section 3(m).
“
Business
Day
”
means
any
day
except
Saturday,
Sunday
and
any
day
which
is
a
legal
holiday or
a
day
on
which
banking
institutions
in
the
State
of
Texas
generally are
authorized or required by law or other government actions to close.
“
Commission
”
means the Securities and Exchange Commission.
“
Common Shares
”
shall have the meaning
set forth in the definition of
“
Registrable Securities.
”
“
Common Stock
”
means the Company
’
s Common Stock, $0.001 par value.
“
Effectiveness
Date
”
means
with
respect
to
the
Registration
Statement
the
earlier
of
(i)
the
90
th
day
following
the
Closing
Date,
before
which
the
Company
will
use
its
commercially
reasonable
best
efforts
to
cause
the
Registration
Statement
to
become
effective,
and
(ii)
the
date
which
is
within
five
(5)
Business
Days
after
the
date
on
which
the
Commission
informs the Company in writing (a) that the Commission will not review the Registration
Statement,
or
(b)
that
the
Company
may
request
the
acceleration
of
the
effectiveness
of
the
Registration Statement.
“
Effectiveness Period
”
shall have the meaning set forth in Section 2.
“
Event
”
shall have the meaning set forth in Section 8(d).
“
Exchange Act
”
means the Securities Exchange Act of 1934, as amended.
“
Holder
”
means,
collectively,
each
holder
from
time
to
time
of
Registrable
Securities
including, without limitation, each
Purchaser
and its
assignees.
To
the
extent
this
Agreement
refers
to
an
election,
consent,
waiver,
request
or
approval
of
or
by
the
Holder,
such
reference shall mean an election, consent, waiver, request or approval by the holders of a
majority in interest of the then-outstanding Registrable Securities (on an as exercised basis).
“
Indemnified Party
”
shall have the meaning set forth in Section 6(c).
“
Indemnifying Party
”
shall have the meaning set forth in Section 6(c).
“
Liquidated Damages
”
shall have the meaning set forth in Section 8(d).
“
Losses
”
shall have the meaning set forth in Section 6(a).
“
OTC
”
shall mean the OTC Markets Group.
“
Person
”
means
an
individual
or
a
corporation,
partnership,
trust,
incorporated
or
unincorporated
association,
joint
venture,
limited
liability
company,
joint
stock
company,
government (or an agency or political subdivision thereof) or other entity of any kind.
“
Proceeding
”
means an
action, claim, suit, investigation or proceeding (including,
without
limitation,
an
investigation
or
partial
proceeding,
such
as
a
deposition),
whether
commenced or threatened.
“
Prospectus
”
means the
prospectus
included in
the
Registration
Statement
(including,
without limitation,
a
prospectus that
includes
any
information
previously
omitted
from
a
prospectus
filed
as
part
of
an
effective
registration
statement
in
reliance
upon
Rule
430A
promulgated
under
the
Securities
Act),
as
amended
or
supplemented
by
any
prospectus
supplement,
with
respect
to
the
terms
of
the
offering
of
any portion
of
the
Registrable
Securities
-2-
covered
by the
Registration
Statement,
and
all
other
amendments
and
supplements
to
the
Prospectus,
including
post-effective
amendments,
and
all
material
incorporated
by
reference
in
such Prospectus.
“
Registrable Securities
”
means (i) the shares of
Common Stock issued or issuable
pursuant to the Purchase
Agreement, and upon any stock split, stock dividend, recapitalization or
similar
event
with
respect
to
such
shares
of
Common
Stock
and
any
other
securities
issued
in
exchange of or replacement of such shares of Common Stock (collectively, the
“
Common
Shares
”
);
until
in
the
case
of
any
of
the
Common
Shares
(a)
a
Registration
Statement
covering
such Common Share has been
declared
effective by the Commission and continues to be
effective
during
the
Effectiveness
Period,
or
(b)
such
Common
Share
is
sold
in
compliance
with
Rule
144,
after
which
time
such
Common
Share
shall
not
be
a
Registrable
Security;
(ii)
the
Warrants
issued
or
issuable
pursuant
to
the
Purchase
Agreement
until
in
the
case
of
any
of
the
Warrants
(a)
a
Registration
Statement
covering
such
Warrant
has
been
declared
effective
by
the
Commission
and
continues
to
be
effective
during
the
Effectiveness
Period,
(b)
such
Warrant
is
sold
in
compliance
with
Rule
144,
after
which
time
such
Warrant
shall
not
be
a
Registrable
Security,
or
(c)
such
Warrant
is
fully
exercised
for
shares
of
Common
Stock,
after
which
time
such
Warrant
shall
not
be
a
Registrable
Security;
and
(iii)
the
shares
of
Common
Stock
issued
and
issuable
pursuant
to
the
exercise
of
the
Warrants,
and
upon
any
stock
split,
stock
dividend,
recapitalization
or
similar
event
with
respect
to
such
shares
of
Common
Stock
and
any
other
securities
issued
in
exchange
of
or
replacement
of
such
shares
of
Common
Stock
(collectively,
the
“
Warrant Shares
”
); until in the case of any of the Warrant Shares (a) a Registration Statement
covering such Warrant Share has been declared effective by the Commission and continues to be
effective
during
the
Effectiveness
Period,
or
(b)
such
Warrant
Share
is
sold
in
compliance
with
Rule 144, after which time such Warrant Share shall not be a Registrable Security.
“
Registration
Statement
”
means
the
registration
statement,
including
the
Prospectus, amendments
and supplements to such
registration statement or
Prospectus, including
pre-
and
post-effective
amendments,
all
exhibits
thereto,
and
all
material
incorporated
by
reference
in
such
registration
statement,
for
the
Shares,
the
Warrants
and
the
Warrant
Shares
required to be filed by the Company with the Commission pursuant to this Agreement.
“
Required
Filing
Date
”
means
the
45
th
day
immediately
following
the
Closing
Date.
“
Rule
144
”
means Rule 144
promulgated by
the
Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such Rule.
“
Rule
158
”
means Rule 158
promulgated by
the
Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such Rule.
“
Rule
415
”
means Rule 415
promulgated by
the
Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such Rule.
-3-
“
Securities Act
”
means the Securities Act of 1933, as amended.
“
Special
Counsel
”
means
an
attorney
selected
by
and
acting
as
special
counsel
to
Holder.
“
Warrant Shares
”
shall have the meaning set forth in the definition of
“
Registrable Securities.
”
2.
Registration.
On
or
prior
to
the
Required
Filing
Date,
the
Company
shall
prepare
and
file
with
the
Commission
a
Registration
Statement
covering
the
resale
of
the
Registrable
Securities
for
an
offering
to
be
made
on
a
continuous
basis
pursuant
to
Rule
415.
The
Registration
Statement
shall
be
on
Form
S-1
and
shall
contain
(except
if
otherwise
directed
by
the
Purchasers)
the
“
Plan
of
Distribution
”
attached
hereto
as
Exhibit
B.
The
Company
shall
(i)
not
permit
any
securities
other
than
the
Registrable
Securities
to
be
included
in
the
Registration
Statement, (ii) use its commercially reasonable best efforts to cause the Registration Statement to
be
declared
effective
under
the
Securities
Act
(including
filing
with
the
Commission
a
request
for
acceleration
of
effectiveness
within
five
(5)
Business
Days
of
the
date
that
the
Company
is
notified (orally
or
in writing,
whichever
is earlier) by
the
Commission that the
Registration
Statement
will
not
be
“
reviewed,
”
or
not
be
subject
to
further
review)
as
soon
as
possible
after
the
filing
thereof,
but
in
any
event
prior
to
the
Effectiveness
Date,
and
(iii)
keep
such
Registration
Statement
continuously
effective
under
the
Securities
Act
for
a
period
of
two
years
from the Effectiveness Date (the
“
Effectiveness Period
”
).
3.
Registration Procedures; Company
’
s Obligations.
In
connection
with
the
registration
of
the
Registrable
Securities,
the
Company
shall:
(a)
Prepare
and
file
with
the
Commission
on
or
prior
to
the
Required
Filing
Date, a Registration Statement on Form S-1 in accordance with the method or methods of
distribution
thereof
as
specified
by
the
Holder
(except
if
otherwise
directed
by
the
Holder),
and
use its commercially reasonable best efforts to cause the Registration Statement to become
effective
and
remain
effective
as
provided
herein;
provided,
however,
that
not
less
than
three
(3)
Business
Days
prior
to
the
filing
of
the
Registration
Statement
or
any
related
Prospectus
or
any
amendment
or
supplement
thereto
(including
any
document
that
would
be
incorporated
therein
by reference),
the
Company shall
(i)
furnish
to
the Holder
and
any Special
Counsel,
copies
of
all
such
documents
proposed
to
be
filed,
which documents
(other
than
those
incorporated
by
reference)
will be subject to the timely review of and comment by such
Special Counsel, and
(ii)
at
the
request
of
the
Holder
cause
its
officers
and
directors,
counsel
and
independent
certified
public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of
such
Special
Counsel,
to
conduct
a
reasonable
investigation
within
the
meaning of
the
Securities
Act. The Company
shall not file the Registration Statement or any
such Prospectus or any
amendments or supplements thereto to which the Holder or any Special Counsel
shall reasonably
object in writing within three (3) Business Days of their receipt thereof.
(b)
(i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement as may be necessary to keep the
-4-
Registration
Statement
continuously
effective
as
to
the
applicable
Registrable
Securities
for
the
Effectiveness
Period
in
order
to
register
for
resale
under
the
Securities
Act
all
of
the
Registrable
Securities;
(ii)
cause
the
related
Prospectus
to
be
amended
or
supplemented
by
any
required
Prospectus
supplement,
and
as
so
supplemented
or
amended
to
be
filed
pursuant
to
Rule
424
(or
any
similar
provisions
then
in
force)
promulgated
under
the
Securities
Act;
(iii)
respond
promptly to any comments received from the Commission with respect to the Registration
Statement
or
any
amendment
thereto
and
promptly
provide
the
Holder
true
and
complete
copies
of
all
correspondence
from
and
to
the
Commission
relating
to
the
Registration
Statement;
and
(iv)
comply
in
all
material
respects
with
the
provisions
of
the
Securities
Act
and
the
Exchange
Act with respect to the disposition of all Registrable Securities covered by
the Registration
Statement
during
the
applicable
period
in
accordance
with
the
intended
methods
of
disposition
by
the
Holder
set
forth
in
the
Registration
Statement
as
so
amended
or
in
such
Prospectus
as
so
supplemented.
(c)
Notify
the
Holder
of
Registrable
Securities
to be
sold
and
any
Special
Counsel promptly (and, in the case of (i)(A) below, not less than
three (3) Business Days prior to
such
filing
and,
in
the
case
of
(i)(C)
below,
no
later
than
the
first
Business
Day
following
the
date on which the Registration Statement becomes effective) and (if requested by
any
such
Person)
confirm
such
notice
in
writing
no
later
than
three
(3)
Business
Days
following
the
day
(i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment to the
Registration
Statement
is
proposed
to
be
filed,
(B)
when
the
Commission
notifies
the
Company
whether
there
will
be
a
“
review
”
of
such
Registration
Statement
and
whenever
the
Commission
comments
in
writing
on
such
Registration
Statement,
and
(C)
with
respect
to
the
Registration
Statement
or
any
post-effective
amendment,
when
the
same
has
become
effective;
(ii)
of
any
request by the Commission or any other Federal or state
governmental authority for amendments
or
supplements
to
the
Registration
Statement
or
Prospectus
or
for
additional
information;
(iii)
of
the
issuance
by
the
Commission
of
any
stop
order
suspending
the
effectiveness
of
the
Registration
Statement
covering
any
or
all
of
the
Registrable
Securities
or
the
initiation
of
any
Proceedings
for that
purpose;
(iv)
of
the
receipt
by the
Company of
any notification
with
respect
to
the
suspension
of
the
qualification
or
exemption
from
qualification
of
any
of
the
Registrable
Securities
for
sale
in
any
jurisdiction,
or
the
initiation
or
threatening
of
any
Proceeding
for
such
purpose;
and
(v)
of
the
occurrence
of
any
event
that
makes
any
statement
made
in
the
Registration Statement or Prospectus or any document incorporated or deemed to be
incorporated
therein
by
reference
untrue
in
any
material
respect
or
that
requires
any
revisions
to
the Registration Statement, Prospectus or other documents so that, in the case of
the Registration
Statement
or
the
Prospectus,
as
the
case
may
be,
it
will
not
contain
any
untrue
statement
of
a
material
fact
or
omit
to
state
any material
fact
required
to
be
stated
therein
or
necessary to
make
the statements therein, in the light of the circumstances under which they were made, not
misleading.
The
Company
shall
promptly
furnish
to
the
Special
Counsel,
without
charge,
(i)
any
correspondence
from
the
Commission
or
the
Commission
’
s
staff
to
the
Company
or
its
representatives
relating
to
any
Registration
Statement,
and
(ii)
promptly after
the
same
is
prepared
and
filed
with
the
Commission,
a
copy
of
any
written
response
to
the
correspondence
received from the Commission.
-5-
(d)
Use its commercially reasonable best efforts to avoid the issuance of, or, if
issued,
obtain
the
withdrawal
of,
(i)
any
order
suspending
the
effectiveness
of
the
Registration
Statement,
or
(ii)
any suspension
of
the
qualification
(or exemption
from
qualification)
of
any of
the Registrable Securities for sale in any U.S. jurisdiction, at the earliest practicable moment.
(e)
If
requested
by
the
Holder,
(i)
promptly
incorporate
in
a
Prospectus
supplement
or
post-effective
amendment
to
the
Registration
Statement
such
information
as
the
Company reasonably agrees should be included therein, and (ii) make all required filings of such
Prospectus
supplement
or
such
post-effective
amendment
as
soon
as
practicable
after
the
Company
has
received
notification
of
the
matters
to
be
incorporated
in
such
Prospectus
supplement or post-effective amendment.
(f)
Furnish
to
the
Holder
and
any
Special
Counsel,
without
charge,
at
least
one
conformed copy
of each Registration
Statement
and
each amendment thereto, including
financial
statements
and
schedules,
all
documents
incorporated
or
deemed
to
be
incorporated
therein
by
reference,
and
all
exhibits
to
the
extent
requested
by
such
Person
(including
those
previously
furnished
or
incorporated
by
reference)
promptly
after
the
filing
of
such
documents
with the Commission.
(g)
Promptly
deliver
to
the
Holder
and
any
Special
Counsel,
without
charge,
as
many
copies
of
the
Registration
Statement,
Prospectus
or
Prospectuses
(including
each
form
of prospectus) and each amendment or supplement thereto as such Persons may
reasonably
request; and the Company hereby consents to the use of such Prospectus and each amendment or
supplement
thereto
by
the
selling
Holder
in
connection
with
the
offering
and
sale
of
the
Registrable Securities covered by such Prospectus and any amendment or supplement thereto.
(h)
Prior to any public offering of Registrable Securities, use its
commercially
reasonable best efforts to
register or
qualify or
cooperate
with the selling Holder and
any Special
Counsel
in
connection
with
the
registration
or
qualification
(or
exemption
from
such
registration
or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky
laws
of
such
jurisdictions
within
the
United
States
as
the
Holder
reasonably
requests
in
writing,
to
keep
each
such
registration
or
qualification
(or
exemption
therefrom)
effective
during
the
Effectiveness
Period
and
to
do
any
and
all
other
acts
or
things
necessary
or
advisable
to
enable
the disposition in such jurisdictions of the Registrable Securities covered by a Registration
Statement;
provided,
however,
that
the
Company
shall
not
be
required
to
qualify
generally to
do
business
in
any
jurisdiction
where
it
is
not
then
so
qualified
or
to
take
any
action
that
would
subject
it
to
general
service
of
process
in
any
such
jurisdiction
where
it
is
not
then
so
subject
or
subject the Company to any tax in any such jurisdiction where it is not then so subject.
(i)
Cooperate
with
the
Holder
to
facilitate
the
timely preparation
and
delivery
of
certificates
representing Registrable
Securities
to
be sold
pursuant
to
a
Registration
Statement
and
to
enable
such
Registrable
Securities
to
be
in
such
denominations
and
registered
in
such
names
as
the
Holder
may
request
at
least
two
(2)
Business
Days
prior
to
any
sale
of
Registrable
Securities.
(j)
Upon
the
occurrence
of
any
event
contemplated
by
Section
3(c)(v),
promptly
prepare
a
supplement
or
amendment, including
a
post-effective
amendment, to the
-6-
Registration
Statement
or
a
supplement
to
the
related
Prospectus
or
any
document
incorporated
or
deemed
to
be
incorporated
therein
by
reference,
and
file
any other
required
document
so
that,
as
thereafter
delivered,
neither
the
Registration
Statement
nor
such
Prospectus
will
contain
an
untrue statement
of
a
material
fact
or
omit
to
state a material
fact
required
to
be stated
therein
or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading.
(k)
Use
its
commercially
reasonable
best
efforts
to
cause
all
Registrable
Securities
relating
to
such
Registration
Statement
to
be
quoted
by
OTC
and
any
other
securities
exchange, quotation system, market or over-the-counter bulletin board, if any, on which the same
securities
issued
by
the
Company
are
then
listed
as
and
when
required
pursuant
to
the
Purchase
Agreement.
(l)
Comply in all material respects with all applicable
rules and regulations of
the
Commission
and
make
generally
available
to
its
security
holders
earning
statements
satisfying the
provisions
of
Section
11(a)
of
the
Securities
Act
and
Rule
158
not
later
than
forty-
five (45) days
after
the
end
of
any twelve
(12) month
period
(or ninety (90)
days
after
the
end
of
any
twelve
(12)
month
period
if
such
period
is
a
fiscal
year)
commencing
on
the
first
day
of
the
first
fiscal
quarter
of
the
Company
after
the
effective
date
of
the
Registration
Statement,
which
statement shall conform to the requirements of Rule 158.
(m)
If (i) there is material non-public information regarding the Company
which
the
Company
’
s
Board
of
Directors
(the
“
Board
”
)
reasonably
determines
not
to
be
in
the
Company
’
s
best
interest
to
disclose
and
which
the
Company is
not
otherwise
required
to
disclose,
or
(ii)
there
is
a
significant
business
opportunity
(including,
but
not
limited
to,
the
acquisition
or
disposition of
assets
(other
than
in
the
ordinary course of
business)
or
any merger,
consolidation, tender
offer
or
other
similar
transaction)
available
to the Company
which
the
Board
reasonably
determines
not
to
be
in
the
Company
’
s
best
interest
to
disclose
and
which
the
Company
would
be
required
to
disclose
under
the
Registration
Statement,
then
the
Company
may suspend effectiveness of a Registration Statement and suspend the sale of Registrable
Securities
under
a
Registration
Statement
one
(1)
time
every
three
(3)
months
or
three
(3)
times
in
any twelve
month
period,
provided
that
the
Company may not
suspend
its
obligation
for more
than
thirty
(30)
days
in
the
aggregate
in
any
twelve
month
period
if
suspension
is
for
any
of
the
reasons listed above or sixty (60) days in the
aggregate in
any twelve month period for any other
reason
(each,
a
“
Blackout
Period
”
);
provided,
however,
that
no
such
suspension
shall
be
permitted for more than twenty
(20) consecutive days, arising out of the same set of facts,
circumstances or transactions.
(n)
Within two (2) Business Days after the Registration Statement which
includes
the
Registrable
Securities
is
ordered
effective
by
the
Commission,
the
Company
shall
deliver,
and
shall
cause
legal
counsel
for
the
Company
to
deliver,
to
the
transfer
agent
for
such
Registrable
Securities
(with
copies
to
the
Holder
whose
Registrable
Securities
are
included
in
such Registration Statement) confirmation that the Registration Statement has been declared
effective by the Commission in the form attached hereto as Exhibit C.
-7-
4.
Registration Procedures; Holder
’
s Obligations
In connection with the registration of the Registrable Securities, the Holder shall:
(a)
If
the
Registration
Statement
refers
to
the
Holder
by name
or
otherwise
as
the
holder
of
any
securities
of
the
Company,
have
the
right
to
require
(if
such
reference
to
the
Holder
by
name
or
otherwise
is
not
required
by
the
Securities
Act
or
any
similar
federal
statute
then
in
force)
the
deletion
of
the
reference to
the
Holder
in
any amendment
or
supplement
to
the
Registration
Statement
filed
or
prepared
subsequent
to
the
time
that
such
reference
ceases
to
be
required.
(b)
(i)
not sell any
Registrable
Securities
under
the Registration
Statement
until
it
has
received
copies
of
the
Prospectus
as
then
amended
or
supplemented
as
contemplated
in
Section
3(g)
and
notice
from
the
Company
that
such
Registration
Statement
and
any
post-
effective
amendments
thereto
have
become
effective
as
contemplated
by Section
3(c),
(ii)
comply
with
the
prospectus
delivery
requirements
of
the
Securities
Act
as
applicable
to
it
in
connection
with
sales
of
Registrable
Securities
pursuant
to
the
Registration
Statement,
and
(iii)
furnish
to
the
Company
information
regarding
such
Holder
and
the
distribution
of
such
Registrable Securities as is required by law to be disclosed in the Registration Statement, and the
Company
may
exclude
from
such
registration
the
Registrable
Securities
of
the
Holder
if
it
fails
to
furnish
such
information
within
a
reasonable
time
prior
to
the
filing
of
each
Registration
Statement, supplemented Prospectus and/or amended Registration Statement.
(c)
upon
receipt
of
a notice from
the
Company of
the
occurrence of
any event
of
the
kind
described
in
Section
3(c)(ii),
3(c)(iii),
3(c)(iv),
3(c)(v)
or
3(m),
forthwith
discontinue
disposition
of
such
Registrable
Securities
under
the
Registration
Statement
until
the
Holder
’
s
receipt
of
the
copies
of
the
supplemented
Prospectus
and/or
amended
Registration
Statement
contemplated
by Section
3(j),
or
until
it
is
advised
in
writing
by the
Company that
the
use of
the
applicable
Prospectus
may be
resumed,
and,
in
either
case,
has
received
copies
of
any additional
or
supplemental
filings
that
are
incorporated
or
deemed
to
be
incorporated
by
reference
in
such
Prospectus or Registration Statement.
5.
Registration Expenses
All
reasonable
fees
and
expenses
incident
to
the
performance
of
or
compliance
with this Agreement by the Company shall be borne by the Company whether or not the
Registration
Statement
is
filed
or
becomes
effective
and
whether
or
not
any
Registrable
Securities
are
sold
pursuant
to
the
Registration
Statement.
The
fees
and
expenses
referred
to
in
the
foregoing
sentence
shall
include,
without
limitation,
the
following:
(i)
all
registration
and
filing fees (including, without limitation, fees and expenses (A) with respect to filings required to
be made with OTC and each securities exchange or other market on which Registrable Securities
are
required
hereunder
to
be
listed,
(B)
with
respect
to
filings
required
to
be
made
with
the
Commission,
and
(C)
in
compliance
with
state
securities
or
Blue
Sky
laws);
(ii)
printing
expenses (including, without limitation, expenses of printing certificates for
Registrable
Securities
and
of
printing
prospectuses
if
the
printing of
prospectuses
is
requested
by the
holders
of
a
majority
of
the
Registrable
Securities
included
in
the
Registration
Statement);
(iii)
messenger, telephone and delivery
expenses; (iv) fees and disbursements of counsel for the
-8-
Company; and
(v) fees
and expenses of all other Persons retained by the Company in connection
with
the
consummation
of
the
transactions
contemplated
by
this
Agreement,
including,
without
limitation,
the
Company
’
s
independent
public
accountants
(including
the
expenses
of
any
comfort letters
or
costs
associated
with the
delivery
by
independent public
accountants of
a
comfort
letter
or
comfort
letters). In
addition,
the
Company
shall
be
responsible
for
all
of
its
internal
expenses
incurred
in
connection
with
the
consummation
of
the
transactions
contemplated
by
this
Agreement
(including,
without
limitation,
all
salaries
and
expenses
of
its
officers
and
employees
performing
legal
or
accounting
duties),
the
expense
of
any
annual
audit,
and the
fees and
expenses incurred in
connection
with the listing of the
Registrable
Securities on
any
securities
exchange
as
required
hereunder.
The
Company
shall
not
be
responsible
for
the
payment
of
any
commissions
or
other
expenses
incurred
by
the
Holder
in
connection
with
their
sales of Registrable Securities or for the fees of any Special Counsel.
6.
Indemnification
(a)
Indemnification by
the Company. The Company
shall, notwithstanding
any
termination
of
this
Agreement,
indemnify
and
hold
harmless
each
Purchaser,
its
permitted
assignees,
officers,
directors,
managers,
agents,
brokers
(including
brokers
who
offer
and
sell
Registrable
Securities
as
principal
as
a
result
of
a
pledge
or
any
failure
to
perform
under
a
margin
call
of
Common
Stock),
investment
advisors
and
employees,
each
Person
who
controls
any such Purchaser or permitted assignee (within the meaning of Section 15 of the Securities Act
or
Section
20
of
the
Exchange
Act)
and
the
officers,
directors,
managers,
agents
and
employees
of each such controlling Person, and the respective successors, assigns, estate and personal
representatives
of
each
of
the
foregoing,
to
the
fullest
extent
permitted
by
applicable
law,
from
and against any and all claims, losses, damages, liabilities, penalties, judgments, costs (including,
without limitation, costs of investigation) and expenses (including, without limitation, reasonable
attorneys
’
fees
and
expenses)
(collectively,
“
Losses
”
),
as
incurred,
arising
out
of
or
relating
to
any untrue or alleged untrue statement of a material fact contained
in the Registration Statement,
any
Prospectus,
as
supplemented
or
amended,
if
applicable,
or
arising
out
of
or
relating
to
any
omission or alleged omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto,
in
the
light
of
the
circumstances
under
which
they
were
made)
not
misleading,
except
(i)
to
the
extent,
but
only
to
the
extent,
that
such
untrue
statements
or
omissions
are
based
solely
upon
information
regarding
the
Holder
furnished
in
writing
to
the
Company
by
the
Holder
expressly
for use therein, which information was reviewed and expressly approved by the Holder or
Special Counsel expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus
or
in
any
amendment
or
supplement
thereto,
or
(ii)
as
a
result
of
the
failure
of
the
Holder
to
deliver
a
Prospectus,
as
amended
or
supplemented,
to
a
purchaser
in
connection
with
an
offer
or
sale.
The
Company
shall
notify
the
Holder
promptly
of
the
institution,
threat
or
assertion
of
any
Proceeding
of
which
the
Company
is
aware
in
connection
with
the
transactions
contemplated by this Agreement.
Such indemnity shall remain in full force and effect regardless
of
any
investigation
made
by
or
on
behalf
of
an
Indemnified
Party
(as
defined
in
Section
6(c)
hereof) and shall survive the transfer of the Registrable Securities by the Holder.
(b)
Indemnification
by Purchaser.
Each
Purchaser
and
its
permitted
assignees
shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers,
agents
and
employees,
each
Person
who
controls
the
Company
(within
the
meaning
of
Section
-9-
15
of
the
Securities
Act
and
Section
20
of
the
Exchange
Act),
and
the
directors,
officers,
agents
or
employees
of
such controlling
Persons,
and the
respective
successors,
assigns, estate and
personal
representatives
of
each
of
the
foregoing,
to
the
fullest
extent
permitted
by
applicable
law,
from
and
against
any
and
all
Losses,
as
incurred,
arising
out
of
or
relating
to
any
untrue
or
alleged
untrue
statement
of
a
material
fact
contained
in
the
Registration
Statement,
any
Prospectus, as supplemented or amended, if applicable, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto,
in
the
light
of
the
circumstances
under
which
they
were
made)
not
misleading,
to
the
extent,
but
only to
the
extent,
that
(i)
such
untrue statement
or
omission
is
contained
in
or
omitted
from
any
information so furnished in writing by the Holder or the Special Counsel to the Company
specifically
for
inclusion
in
the
Registration
Statement
or
such
Prospectus,
and
(ii)
such
information
was
reasonably
relied
upon
by
the
Company
for
use
in
the
Registration
Statement,
such
Prospectus
or
such
form
of
prospectus
or,
to
the
extent
that
such
information
relates
to
the
Holder
or
the
Holder
’
s
proposed
method
of
distribution
of
Registrable
Securities,
was
reviewed
and
expressly approved
in
writing
by the
Holder
expressly for
use in
the
Registration
Statement,
such
Prospectus
or
such
form
of
Prospectus
Supplement.
Notwithstanding
anything to
the
contrary contained
herein,
the
Holder
shall
be liable
under
this
Section
6(b)
for only that
amount
as
does
not
exceed
the
net
proceeds
to
the Holder
as
a result
of
the
sale
of
Registrable
Securities
pursuant to such Registration Statement.
(c)
Conduct
of
Indemnification
Proceedings.
If
any
Proceeding
shall
be
brought
or
asserted
against
any
Person
entitled
to
indemnity
pursuant
to
Section
6(a)
or
6(b)
hereunder
(an
“
Indemnified
Party
”
),
such
Indemnified
Party
promptly
shall
notify
the
Person
from
whom
indemnity
is
sought
(the
“
Indemnifying
Party)
in
writing,
and
the
Indemnifying
Party
shall
assume
the
defense
thereof,
including
the
employment
of
counsel
reasonably
satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in
connection
with
defense
thereof;
provided,
that
the
failure of
any
Indemnified
Party to
give
such
notice
shall
not
relieve
the
Indemnifying
Party
of
its
obligations
or
liabilities
pursuant
to
this
Agreement,
except
(and
only)
to
the
extent
that
it
shall
be
finally
determined
by
a
court
of
competent
jurisdiction
(which
determination
is
not
subject
to
appeal
or
further
review)
that
such
failure shall have materially and adversely prejudiced the Indemnifying Party.
An
Indemnified
Party shall
have
the
right
to
employ separate
counsel
in
any
such
Proceeding
and
to
participate
in
the
defense
thereof,
but
the
fees
and
expenses
of
such
counsel
shall
be
at
the
expense
of
such
Indemnified
Party
or
Parties
unless:
(i)
the
Indemnifying
Party
has
agreed
in
writing
to
pay
such
fees
and
expenses;
or
(ii)
the
Indemnifying
Party
shall
have
failed
promptly
to
assume
the
defense
of
such
Proceeding
and
to
employ
counsel
reasonably
satisfactory
to
such
Indemnified
Party
in
any
such
Proceeding;
or
(iii)
the
named
parties
to
any
such
Proceeding
(including
any
impleaded
parties)
include
both
such
Indemnified
Party
and
the
Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a
conflict
of
interest
is
likely to
exist
if the
same
counsel
were to
represent
such
Indemnified
Party
and
the
Indemnifying
Party
(in
which
case,
if
such
Indemnified
Party
notifies
the
Indemnifying
Party
in
writing
that
it
elects
to
employ
separate
counsel
at
the
expense
of
the
Indemnifying
Party,
the
Indemnifying
Party
shall
not
have
the
right
to
assume
the
defense
thereof
and
such
counsel
shall
be
at
the
expense
of
the
Indemnifying Party).
The
Indemnifying Party shall
not
be
liable
for
any
settlement
of
any
such
Proceeding
effected
without
its
written
consent,
which
-10-
consent
shall
not
be
unreasonably
withheld,
conditioned
or
delayed.
No
Indemnifying
Party
shall, without the prior written consent of the
Indemnified Party,
which consent shall not
unreasonably
be
withheld,
conditioned
or
delayed,
effect
any
settlement
of
any
pending
Proceeding in
respect
of
which
any
Indemnified
Party is
a
party,
unless
such
settlement
includes
an unconditional release of such Indemnified Party from all liability
on claims that are the
subject matter of such Proceeding.
All
reasonable
fees
and
expenses
of
the
Indemnified
Party
(including
reasonable
fees
and
expenses
to
the
extent
incurred
in
connection
with
investigating
or
preparing
to
defend
such
Proceeding
in
a
manner
not
inconsistent
with
this
Section)
shall
be
paid
to
the
Indemnified
Party,
as
incurred,
within
ten
(10)
Business
Days
of
written
notice
thereof
to
the
Indemnifying
Party
(regardless
of
whether
it
is
ultimately
determined
that
an
Indemnified
Party
is
not
entitled
to indemnification hereunder; provided, that the Indemnifying Party may require such
Indemnified
Party
to
undertake
to
reimburse
all
such
fees
and
expenses
to
the
extent
it
is
finally
judicially determined
that
such
Indemnified
Party
is
not
entitled
to
indemnification
hereunder
or
pursuant to applicable law).
(d)
Contribution.
If
a
claim
for
indemnification
under
Section
6(a)
or
6(b)
is
unavailable to an Indemnified Party because of a failure or refusal of a governmental authority to
enforce
such
indemnification
in
accordance
with
its
terms
(by reason
of
public
policy or
otherwise),
then
each
Indemnifying
Party,
in
lieu
of
indemnifying
such
Indemnified
Party,
shall
contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in
such proportion as is appropriate to reflect the relative fault of the Indemnifying
Party
and
Indemnified
Party
in
connection
with
the
actions,
statements
or
omissions
that
resulted
in
such
Losses
as
well
as
any
other
relevant
equitable
considerations.
The
relative
fault
of
such
Indemnifying
Party
and
Indemnified
Party
shall
be
determined
by
reference
to,
among
other
things,
whether
any
action
in
question,
including
any
untrue
or
alleged
untrue
statement
of
a
material
fact
or
omission
or
alleged
omission
of
a
material
fact,
has
been
taken
or
made
by,
or
relates to information supplied by, such
Indemnifying Party or
Indemnified Party, and the
parties
’
relative
intent,
knowledge,
access
to
information
and
opportunity
to
correct
or
prevent
such
action,
statement
or
omission. The
amount
paid
or
payable
by
a
party
as
a
result
of
any
Losses shall be deemed to include, subject to the limitations set forth in Section 6(c), any
reasonable
attorneys
’
or
other
reasonable
fees
or
expenses
incurred
by
such
party
in
connection
with
any
Proceeding
to
the
extent
such
party
would
have
been
indemnified
for
such
fees
or
expenses
if
the
indemnification
provided
for
under
Section
6(a)
or
6(b)
was
available
to
such
party
in
accordance
with
its
terms.
Notwithstanding
anything
to
the
contrary
contained
herein,
the Holder shall be liable or required to contribute under this Section 6(d) for only that amount as
does
not
exceed
the
net
proceeds
to
the
Holder
as
a
result
of
the
sale
of
Registrable
Securities
pursuant to the Registration Statement.
The
parties
hereto
agree
that
it
would
not
be
just
and
equitable
if
contribution
pursuant
to
this
Section
6(d)
were
determined
by
pro
rata
allocation
or
by
any
other
method
of
allocation
that
does
not
take
into
account
the
equitable
considerations
referred
to
in
the
immediately
preceding
paragraph.
No
Person
guilty
of
fraudulent
misrepresentation
(within
the
meaning
of
Section
11(f)
of
the
Securities
Act)
shall
be
entitled
to
contribution
from
any Person
who was not guilty of such fraudulent misrepresentation.
-11-
The
indemnity and
contribution
agreements
contained
in
this
Section
are
in
addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.
7.
Rule 144.
As
long
as
the
Holder
owns
Registrable
Securities,
the
Company
covenants
to
timely file (or obtain extensions in respect thereof and file
within the applicable
grace period)
all
reports
required
to
be
filed
by
the
Company
after
the
date
hereof
pursuant
to
Section
13(a)
or
15(d)
of
the
Exchange
Act
and
to
promptly
furnish
the
Holder
with
true
and
complete
copies
of
all such filings. As long as the Holder owns Registrable Securities, if the Company
is not
required
to
file
reports
pursuant
to
Section
13(a)
or
15(d)
of
the
Exchange
Act,
it
will
prepare
and
furnish
to
the
Holder
and
make
publicly
available
in
accordance
with
Rule
144(c)
promulgated
under
the
Securities
Act
annual
and
quarterly
financial
statements,
together
with
a
discussion
and
analysis
of
such
financial
statements
in
form
and
substance
substantially
similar
to
those
that
would
otherwise
be
required
to
be
included
in
reports
required
by
Section
13(a)
or
15(d)
of
the
Exchange
Act,
as
well
as
any other
information
required
thereby,
in
the
time
period
that
such
filings
would
have
been
required
to
have
been
made
under
the
Exchange
Act. The
Company
further
covenants
that
it
will
take
such
further
action
as
the
Holder
may
reasonably
request, all to the extent required from time to time to enable the Holder to sell Warrants,
Common
Shares
and
Warrant
Shares
without
registration
under
the
Securities
Act
within
the
limitation
of the
exemptions
provided
by Rule
144
promulgated
under
the
Securities
Act,
including
providing
any
legal
opinions
of
counsel
to
the
Company
referred
to
in
the
Purchase
Agreement.
Upon the request of any Holder, the Company shall deliver to such Holder a written
certification of a duly authorized officer as to whether it has complied with such requirements.
8.
Miscellaneous.
(a)
Remedies. The remedies provided in this Agreement and the Purchase
Agreement
are
cumulative
and
not
exclusive of
any remedies
provided
by law.
In
the
event
of
a
breach
by
the
Company
or
by
the
Holder
of
any
of
their
obligations
under
this
Agreement,
the
Holder
or
the
Company,
as
the
case
may
be,
in
addition
to
being
entitled
to
exercise
all
rights
granted
by
law
and
under
this
Agreement,
including
recovery
of
damages,
will
be
entitled
to
specific performance of its rights under this Agreement. The Company and the Holder agree that
monetary
damages
would
not
provide
adequate
compensation
for
any
losses
incurred
by
reason
of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the
event
of
any action
for
specific
performance in
respect
of
such
breach,
it
shall
waive
the
defense
that a remedy at law would be adequate.
(b)
No Inconsistent Agreements. Neither the Company
nor any
of its
Affiliates has as of the date hereof entered into, nor shall the Company or any of its Affiliates, on
or
after
the
date
of
this
Agreement,
enter
into,
any agreement
with
respect
to
its
securities
that
is
inconsistent
with
the
rights
granted
to
the
Holder
in
this
Agreement
or
otherwise
conflicts
with
the provisions hereof. Without limiting the generality of the foregoing, without the written
consent of the Holder, the Company
shall not grant to any
Person the right to request the
Company
to
register
any
securities
of
the
Company
under
the
Securities
Act
if
the
rights
so
granted are inconsistent with the rights granted to the Holder set forth herein, or otherwise
prevent the Company with complying with all of its obligations hereunder.
-12-
(c)
No
Piggyback
on
Registrations.
Neither
the
Company nor
any of
its
security
holders
(other
than
the
Holder
in
such
capacity
pursuant
hereto)
may
include
securities
of the Company in the Registration Statement.
(d)
Failure
to
File
Registration
Statement
and
Other
Events.
The
Company
and the Holder agree that the Holder will suffer damages if the Registration Statement is not filed
on or prior to the Required Filing Date or is not declared effective by the Commission on or prior
to
the
Effectiveness
Date
and
maintained
in
the
manner
contemplated
herein
during
the
Effectiveness
Period
or
if
certain
other
events
occur.
The
Company and
the Holder
further
agree
that it would not be feasible to ascertain the extent of such damages with precision. Accordingly,
if
(i)
the
Registration
Statement
is
not
filed
on
or
prior
to
the
Required
Filing
Date,
or
is
not
declared
effective
by the
Commission
on
or
prior
to
the
Effectiveness
Date,
or
(ii)
the
Company
fails
to
file
with
the
Commission
a
request
for
acceleration
within
five
(5)
Business
Days
of
the
date
that
the
Company
is
notified
(orally
or
in
writing,
whichever
is
earlier)
by
the
Commission
that
a
Registration
Statement
will
not
be
“
reviewed,
”
or
not
subject
to
further
review,
or
(iii)
the
Registration
Statement
is
filed
with
and
declared
effective
by
the
Commission
but
thereafter
ceases
to
be effective
or
available
as
to
all
Registrable
Securities
at
any time
during the
Effectiveness Period, without being succeeded
within a reasonable period by a subsequent
Registration Statement filed with and declared effective by the Commission, or (iv) the Company
suspends
the
use
of
the
Prospectus
forming
a
part
of
such
Registration
Statement
for
more
than
thirty (30) days in any period of 365 consecutive days if the Company suspends in reliance on its
ability
to
do
so
due
to
the
existence
of
a
development
that,
in
the
good
faith
discretion
of
the
Board,
makes
it
appropriate
to
so
suspend
or
which
renders
the Company unable
to
comply with
the Commission requirements, or the Company suspends the use of the Prospectus forming a part
of
such
Registration
Statement
for
more
than
sixty
(60)
days
in
any
period
of
365
consecutive
days
for
any
other
reason,
or
(v)
during
the
Effectiveness
Period,
trading
in
the
Warrants
or
Common
Stock
shall
be
suspended
for
any
reason
for
more
than
three
(3)
Business
Days
in
the
aggregate,
or
(vi)
the
Company
breaches
in
a
material
respect
any
covenant
or
other
material
term
or
condition
in
the
Transaction
Documents
(other
than
a
representation
or
warranty
contained
therein)
or
any other
agreement,
document,
certificate
or
other
instrument
delivered
in
connection with the transactions contemplated hereby and thereby, and such breach continues for
a period of thirty (30) days after written notice thereof to the Company, or (vii) the Company has
breached
Section
3(n)
of
this
Agreement
(any
such
failure
or
breach
being
referred
to
as
an
“
Event
”
),
the
Company
shall
pay
as
liquidated
damages
for
such
failure
or
breach
and
not
as
a
penalty
(the
“
Liquidated
Damages
”
)
to
the
Holder
an
amount
equal
to
three
percent
(3%)
of
the
purchase price of the Common Stock paid by the Holder pursuant to the Purchase Agreement for
the
first
thirty (30)
day period,
and
two
percent
(2%)
of
such
purchase price for
each
subsequent
thirty
(30)
day
period,
pro-rated
for
any
period
less
than
thirty
(30)
days,
following
the
Event
until
the
applicable
Event
has
been
cured.
Payments
to
be
made
pursuant
to
this
Section
8(d)
shall be due and payable immediately upon demand in cash. The parties agree that the Liquidated
Damages represent a reasonable estimate on the part of the parties, as of the date of this
Agreement,
of
the
amount
of
damages
that
may
be
incurred
by
the
Holder
if
the
Registration
Statement
is
not
filed
on
or
prior
to
the
Required
Filing
Date
or
has
not
been
declared
effective
by
the
Commission
on
or
prior
to
the
Effectiveness
Date
and
maintained
in
the
manner
contemplated herein during the Effectiveness Period or if any other Event as described herein has
occurred.
-13-
(e)
Consent to Jurisdiction. The Company and
each Purchaser
(i) hereby
irrevocably submit to the jurisdiction of the United States District Court for the Northern District
of
Texas
and
the
courts
of
the
State
of
Texas
located
in
Dallas
County
for
the
purposes
of
any
suit, action or proceeding arising out of or relating to this Agreement or the Purchase Agreement,
and
(ii)
hereby
waive,
and
agree
not
to
assert
in
any
such
suit,
action
or
proceeding,
any
claim
that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding
is brought in an inconvenient forum or that the venue of the suit, action or proceeding is
improper.
The
Company
and
each
Purchaser
consent
to
process
being
served
in
any
such
suit,
action or proceeding by mailing a copy thereof 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 in
this
Section
8(e)
shall
affect
or
limit
any right
to
serve
process in any other manner permitted by law.
(f)
Amendments
and
Waivers.
The
provisions
of
this
Agreement,
including
the
provisions
of
this
sentence,
may
not
be
amended,
modified
or
supplemented,
and
waivers
or
consents
to
departures
from
the
provisions
hereof
may
not
be
given,
unless
the
same
shall
be
in
writing and signed by the Company and the Purchasers.
(g)
Notices.
Any
notices
required
or
permitted
to
be
given
under
this
Agreement
(and,
unless
otherwise
expressly
provided
therein,
under
any
document
delivered
pursuant
to
this
Agreement)
shall
be
given
in
writing
and
shall
be
deemed
received
(i)
when
personally delivered to the relevant party at such
party
’
s address as set forth below, (ii) if sent by
mail
(which
must
be
certified
or
registered
mail,
postage
prepaid),
when
received
or
rejected
by
the
relevant
party
at
such
party
’
s
address
indicated
below,
or
(iii)
if
sent
by
email
transmission,
when confirmation of delivery is received by the sending party.
(i)
if to the Company:
MediJane Holdings Inc.
2011 Ken Pratt Boulevard, Suite 300
Longmont, Colorado 80501
Attention: Russell G. Stone, Chief Operating Officer
Email:
russell.stone@mjmd.net
with a copy to:
J.M.
Walker &
Associates
Attorneys
At Law
7841 South Garfield Way
Centennial, Colorado 80122
Attention: Jody
M. Walker, Esq.
Email:
jmwlkr85@gmail.com
-14-
(ii)
if to any Purchaser:
At the address of such Purchaser set forth on Exhibit A to this
Agreement.
or
to
such
other
address
or
addresses
or
facsimile
number
or
numbers
as
any
such
party
may
most recently have designated in writing to the other parties hereto by such notice.
(h)
Successors
and
Assigns.
This
Agreement
shall
be
binding
upon
and
inure
to
the
benefit
of
the
parties
and
their
successors
and
permitted
assigns
and
shall
inure
to
the
benefit of the
Holder
and its successors and
assigns.
The Company may not
assign this
Agreement
or
any
of
its
respective
rights or
obligations
hereunder
without the
prior
written
consent
of
the
Purchasers.
Each
Purchaser
may
assign
its
rights
hereunder
in
the
manner
and
to
the Persons as permitted under the Purchase Agreement.
(i)
Assignment
of
Registration
Rights.
The
rights
of
the
Holder
hereunder,
including
the
right
to
have
the
Company
register
for
resale
Registrable
Securities
in
accordance
with
the
terms
of
this
Agreement,
shall
be
assignable
by
each
Holder
to
any
transferee
of
the
Holder
of
all
or
a
portion
of
the
shares
of
Registrable
Securities
if:
(i)
the
Holder
agrees
in
writing
with
the
transferee
or
assignee
to
assign
such
rights,
and
a
copy
of
such
agreement
is
furnished
to
the
Company
within
a
reasonable
time
after
such
assignment;
(ii)
the
Company
is,
within
a
reasonable
time
after
such
transfer
or
assignment,
furnished
with
written
notice
of
(A)
the
name
and
address
of
such
transferee or
assignee,
and
(B)
the
securities
with
respect
to
which
such
registration
rights
are
being
transferred
or
assigned;
(iii)
following
such
transfer
or
assignment
the
further
disposition
of
such
securities
by
the
transferee
or
assignees
is
restricted
under the Securities Act and applicable state securities laws; (iv) at or before the time the
Company receives the written notice contemplated by clause (ii) of this Section, the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions of this
Agreement; and (v) such transfer shall have been made in accordance with the applicable
requirements
of
the
Purchase
Agreement
and
shall
be
for
no
less
than
10%
of
the
Registrable
Securities.
In
addition,
the
Holder
shall
have the
right
to
assign
its
rights
hereunder
to
any other
Person
with
the
prior
written
consent
of
the
Company,
which
consent
shall
not
be
unreasonably
withheld,
conditioned
or
delayed.
The
rights
to
assignment
shall
apply
to
the
Holder
(and
to
subsequent)
successors
and
assigns.
In
the
event
of
an
assignment
pursuant
to
this
Section
8(i),
the
Purchaser
shall
pay
all
incremental
costs
and
expenses
incurred
by
the
Company
in
connection
with
filing a
Registration
Statement
(or
an
amendment
to
the
Registration
Statement)
to register
the
shares
of Registrable
Securities assigned
to any
assignee
or
transferee
of
the
Purchaser.
(j)
Counterparts.
This
Agreement
may
be
executed
in
any
number
of
counterparts, each of which when so executed shall be deemed to be an original, and all of which
taken
together
shall
constitute
one
and
the
same
Agreement. In
the
event
that
any
signature
is
delivered
by
facsimile
transmission,
such
signature
shall
create
a
valid
binding
obligation
of
the
party
executing
(or
on
whose
behalf
such
signature
is
executed)
the
same
with
the
same
force
and effect as if such facsimile signature were the original thereof.
-15-
(k)
Governing
Law.
This
Agreement
shall
be
governed
by
and
construed
in
accordance
with
the
laws
of
the
State
of
Texas,
without
regard
to
principles
of
conflicts
of
law
thereof.
This
Agreement
shall
not
be
interpreted
or
construed
with
any
presumption
against
the
party causing this Agreement to be drafted.
(l)
Cumulative
Remedies.
The
remedies
provided
herein
are
cumulative
and
not exclusive of any remedies provided by law.
(m)
Termination. This Agreement shall terminate on the date on which all
remaining
Registrable
Securities
may
be
sold
without
restriction
pursuant
to
Rule
144
of
the
Securities Act.
(n)
Severability.
If
any
term,
provision,
covenant
or
restriction
of
this
Agreement
is
held
to
be
invalid,
illegal,
void
or
unenforceable
in
any
respect,
the
remainder
of
the
terms,
provisions,
covenants
and
restrictions
set
forth
herein
shall
remain
in
full
force
and
effect
and
shall
in
no
way
be
affected,
impaired
or
invalidated,
and
the
parties
hereto
shall
use
their
reasonable
efforts
to
find
and
employ
an
alternative
means
to
achieve
the
same
or
substantially
the
same
result
as
that
contemplated
by
such
term,
provision,
covenant
or
restriction.
It
is
hereby
stipulated
and
declared
to
be
the
intention
of
the
parties
that
they
would
have
executed
the
remaining
terms,
provisions,
covenants
and
restrictions
without
including
any
of such that may be hereafter declared invalid, illegal, void or unenforceable.
(o)
Headings. The headings herein are for convenience only, do not
constitute
a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
[Remainder of page intentionally left blank. Signature pages to follow.]
-16-
IN
WITNESS
WHEREOF,
the
parties
hereto
have
caused
this
Agreement
to
be
duly executed by their respective authorized persons as of the date first indicated above.
MEDIJANE HOLDINGS INC.
By:
Name: Ronald Lusk
Title: President & Chief Executive Officer
[Signatures of Purchasers to follow on next pages.]
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