SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE
AGREEMENT the “Agreement”) is dated as of the 31st day of August, 201 2, and made effective
as of September 20th 2012 (the “Effective Date”), by and between MILLENNIUM HEALTH
CARE, INC., a Delaware corporation (the “Company”) and TCA GLOBAL CREDIT MASTER FUND,
LLP, a Cayman Islands limited partnership (the “Buyer”).
RECITALS
WHEREAS, Buyer desires
to purchase from Company, and the Company desires to sell and issue to Buyer, upon the terms and subject to the conditions contained
herein, a convertible promissory note in the original principal amount of Three Hundred Seventy-Five Thousand Dollars ($375,000)
in the form attached hereto as Exhibit “A” (the “Note”),
which Note shall be purchased on the date hereof (the “Closing Date”), all for the total purchase
price of Three Hundred Seventy-Five Thousand Dollars ($375,000) (the “Purchase Price”), and all
otherwise subject to the terms and provisions hereinafter set forth; and
WHEREAS, the Company
and its subsidiaries have agreed to secure all of their respective “Obligations” (as hereinafter defined) to Buyer
under the Note, this Agreement and all other Transaction Documents by: (i) granting to the Buyer a continuing and first priority
security interest in all of the assets and properties of the Company pursuant to a Security Agreement dated as of the date hereof
(the “Security Agreement”); (ii) causing Millennium ProComm Solutions, Inc., a New York corporation,
Millennium Coding & Billing, Inc., a New York corporation, Millennium Medical Devices, LLC, a New York limited liability company,
Millennium Vascular Management Group, Inc., a New York corporation, and Millennium Vascular Management Group of Staten Island,
LLC, a New York limited liability company (collectively, the “Subsidiaries”), all wholly owned
subsidiaries of the Company, to guaranty all of the Company’s Obligations pursuant to a guaranty agreement executed by the
Subsidiaries in favor of Buyer (the “Subsidiary Guaranty”); (iii) causing each of the Subsidiaries
to grant to the Buyer a continuing and first priority lien and security interest in all of the assets and properties of each of
the Subsidiaries pursuant to a Security Agreement dated as of the date hereof (the “Sub Security Agreement”);
and (iv) agreeing to the filing of UCC-1 Financing Statements covering all of the assets and properties of the Company and
the Subsidiaries (collectively, the “UCC-l’s”);
NOW, THEREFORE,
in consideration of the premises and the mutual covenants of the parties hereinafter expressed and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, each intending to be legally
bound, agree as follows:
ARTICLE I
RECITALS, EXHIBITS, SCHEDULES
The foregoing recitals
are true and correct and, together with the Schedules and Exhibits referred to hereafter, are hereby incorporated into this Agreement
by this reference.
ARTICLE II
DEFINITIONS
For purposes of this
Agreement, except as otherwise expressly provided or otherwise defined elsewhere in this Agreement, or unless the context otherwise
requires, the capitalized terms in this Agreement shall have the meanings assigned to them in this Article as follows:
2.1 “Affiliate”
means, with respect to a Person, any other Person directly or indirectly controlling, controlled by, or under common control with,
such Person at any time during the period for which the determination of affiliation is being made. For purposes of this definition,
the term “control,” “controlling,” “controlled”
and words of similar import, when used in this context, means, with respect to any Person, the possession, directly or indirectly,
of the power to direct, or cause the direction of, management policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
2.2 “Assets”
means all of the properties and assets of the Company and its subsidiaries, as the context may so require, whether real, personal
or mixed, tangible or intangible, wherever located, whether now owned or hereafter acquired.
2.3 “Claims”
means any Proceedings, Judgments, Obligations, threats, losses, damages, deficiencies, settlements, assessments, charges, costs
and expenses of any nature or kind.
2.4 “Common
Stock” means the Company’s common stock, $0.0001 par value per share.
2.5 “Consent”
means any consent, approval, order or authorization of, or any declaration, filing or registration with, or any application or
report to, or any waiver by, or any other action (whether similar or dissimilar to any of the foregoing) of, by or with, any Person,
which is necessary in order to take a specified action or actions, in a specified manner and/or to achieve a specific result.
2.6 “Contract”
means any written or oral contract, agreement, order or commitment of any nature whatsoever, including, any sales order, purchase
order, lease, sublease, license agreement, services agreement, loan agreement, mortgage, security agreement, guarantee, management
contract, employment agreement, consulting agreement, partnership agreement, shareholders agreement, buy-sell agreement, option,
warrant, debenture, subscription, call or put.
2.7 “Effective
Date” means the date set forth in the introductory paragraph of this Agreement.
2.8 “Encumbrance”
means any lien, security interest, pledge, mortgage, easement, leasehold, assessment, tax, covenant, restriction, reservation,
conditional sale, prior assignment, or any other encumbrance, claim, burden or charge of any nature whatsoever.
2.9 “Environmental
Requirements” means all Laws and requirements relating to human, health, safety or protection of the environment
or to emissions, discharges, releases or threatened releases of pollutants, contaminants, or Hazardous Materials in the environment
(including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), or otherwise relating
to the treatment, storage, disposal, transport or handling of any Hazardous Materials.
2.10 “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
2.11 “GAAP”
means generally accepted accounting principles, methods and practices set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants, and statements and pronouncements of the Financial
Accounting Standards Board, the SEC or of such other Person as may be approved by a significant segment of the U.S. accounting
profession, in each case as of the date or period at issue, and as applied in the U.S. to U.S. companies.
2.12 “Governmental
Authority” means any foreign, federal, state or local government, or any political subdivision thereof, or any court,
agency or other body, organization, group, stock market or exchange exercising any executive, legislative, judicial, quasi-judicial,
regulatory or administrative function of government.
2.13 “Hazardous
Materials” means: (i) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and transformers or other equipment that contain dielectric fluid containing
levels of polychlorinated biphenyls (PCB’s); (ii) any chemicals, materials, substances or wastes which are now or hereafter
become defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous
materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,”
“toxic pollutants” or words of similar import, under any Law; and (iii) any other chemical, material, substance, or
waste, exposure to which is now or hereafter prohibited, limited or regulated by any Governmental Authority.
2.14 “Incentive
Shares” means the shares of the Company’s Common Stock to be issued by the Company to Buyer in accordance with
Section 7.5 below.
2.15 “Judgment”
means any order, writ, injunction, fine, citation, award, decree, or any other judgment of any nature whatsoever of any Governmental
Authority.
2.16 “Law”
means any provision of any law, statute, ordinance, code, constitution, charter, treaty, rule or regulation of any Governmental
Authority.
2.17 “Leases”
means all leases for real or personal property.
2.18 “Material
Adverse Effect” means with respect to the event, item or question at issue, that such event, item or question
would not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability
of this Agreement or any of the Transaction Documents; (ii) a material adverse effect on the results of operations, Assets, business
or condition (financial or otherwise) or prospects of the Company or any of its subsidiaries, either individually or taken as a
whole; (iii) a material adverse effect on the Company’s or its subsidiaries’ ability to perform, on a timely basis,
its or their respective Obligations under this Agreement or any Transaction Documents; or (iv) a material adverse effect on the
Buyer’s ability to sell or dispose of any of the Securities, whether on the Principal Trading Market, or otherwise, in accordance
with applicable securities laws.
2.19 “Material
Contract” shall mean any Contract to which the Company is a party or by which the Company or any of its
Assets are bound and which: (i) involves aggregate payments of Twenty-Five Thousand Dollars ($25,000) or more to or from the Company;
(ii) involves delivery, purchase, licensing or provision, by or to the Company, of any goods, services, assets or other items having
a value (or potential value) over the term of such Contract of Twenty-five Thousand Dollars ($25,000) or more or is otherwise material
to the conduct of the Company’s business as now conducted and as contemplated to be conducted in the future; (iii) involves
a Company Lease; (iv) imposes any guaranty, surety or indemnification Obligations on the Company; or (v) prohibits the Company
from engaging in any business or competing anywhere in the world.
2.20 “Obligation”
means any debt, liability or obligation of any nature whatsoever, whether secured, unsecured, recourse, nonrecourse, liquidated,
unliquidated, accrued, absolute, fixed, contingent, ascertained, unascertained, known, unknown or obligations under executory
Contracts.
2.21 “Ordinary
Course of Business” means the ordinary course of business consistent with past custom and practice (including
with respect to quantity, quality and frequency).
2.22 “PCAOB”
means the Public Company Accounting Oversight Board.
2.23 “Permit”
means any license, permit, approval, waiver, order, authorization, right or privilege of any nature whatsoever, granted, issued,
approved or allowed by any Governmental Authority.
2.24 “Person”
means any individual, sole proprietorship, joint venture, partnership, company, corporation, association, cooperation, trust,
estate, Governmental Authority, or any other entity of any nature whatsoever.
2.25 “Principal
Trading Market” shall mean the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market,
the OTC Markets, including the Bulletin Board and Pink Sheets, the NYSE Euronext or the New York Stock Exchange, whichever is
at the time the principal trading exchange or market for the Common Stock.
2.26 “Proceeding”
means any demand, claim, suit, action, litigation, investigation, audit, study, arbitration, administrative hearing, or any
other proceeding of any nature whatsoever.
2.27 “Real
Property” means any real estate, land, building, structure, improvement, fixture or other real property of any nature
whatsoever, including, but not limited to, fee and leasehold interests.
2.28 “SEC”
means the United States Securities and Exchange Commission.
2.29 “Securities”
means, collectively, the Note, the Incentive Shares and any additional shares of Common Stock issuable in connection with
a conversion of the Note.
2.30 “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
2.31 “Tax”
means (i) any foreign, federal, state or local income, profits, gross receipts, franchise, sales, use, occupancy, general
property, real property, personal property, intangible property, transfer, fuel, excise, accumulated earnings, personal holding
company, unemployment compensation, social security, withholding taxes, payroll taxes, or any other tax of any nature whatsoever,
(ii) any foreign, federal, state or local organization fee, qualification fee, annual report fee, filing fee, occupation fee, assessment,
rent, or any other fee or charge of any nature whatsoever, or (iii) any deficiency, interest or penalty imposed with respect to
any of the foregoing.
2.32 “Tax
Return” means any tax return, filing, declaration, information statement or other form or document required
to be filed in connection with or with respect to any Tax.
2.33 “Transaction
Documents” means any documents or instruments executed or to be executed by Company in connection with this Agreement,
including the Note, the Security Agreement, the UCC- 1’s, the Subsidiary Guaranty, and the Sub Security Agreement, together
with all modifications, amendments, extensions, future advances, renewals, and substitutions thereof.
ARTICLE III
INTERPRETATION
In this Agreement,
unless the express context otherwise requires: (i) the words “herein,” “hereof” and “hereunder”
and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; (ii) references to the words “Article” or “Section” refer to the respective Articles and Sections of this Agreement,
and references to “Exhibit” or “Schedule” refer to the respective Exhibits and Schedules annexed hereto;
(iii) references to a “party” mean a party to this Agreement and include references to such party’s permitted
successors and permitted assigns; (iv) references to a “third party” mean a Person not a party to this Agreement;
(v) the terms “dollars” and “$” means U.S. dollars; (vi) wherever the word “include,” “includes”
or “including” is used in this Agreement, it will be deemed to be followed by the words “without limitation;”
and (vi) the term “Company” shall refer collectively to the Company and all of its subsidiaries, whether listed as
part of the Subsidiaries or not, and to each of them individually, in each case as the context may so require, it being the intent
of the parties under this Agreement that all of the terms, conditions, provisions and representations hereof shall, to the greatest
extent possible, while still maintaining the intent and purpose of this Agreement, apply equally to each of them, as if each term,
covenant, provision and representation was separately made herein by each of them, except only with respect to any terms and provisions
that deal directly with the issuance of any of the Securities, in which case the term Company shall mean and refer only to the
Company, as the issuer of such Securities, without its Subsidiaries.
ARTICLE IV
PURCHASE AND SALE OF NOT ES
4.1 Purchase
and Sale of Note. Subject to the satisfaction (or waiver) of the terms and conditions of this Agreement, Buyer agrees to purchase,
on the Closing Date, and Company agrees to sell and issue to Buyer, on the Closing Date, the Note in the amount of the Purchase
Price as more specifically set forth below.
4.2 Closing.
The closing of the purchase and sale of the Note (the “Closing”) shall take place on the Closing Date,
subject to satisfaction of the conditions to the Closing set forth in this Agreement. The Closing shall occur on the Closing Date
through the use of overnight mails and subject to customary escrow instructions from Buyer and its counsel, or in such other manner
as is mutually agreed to by the Company and the Buyer.
4.3 Form
of Payment. Subject to the satisfaction of the terms and conditions of this Agreement, on the Closing Date: (i) the Buyer shall
deliver to the attorney trust account of Lucosky Xxxxxxxx, LLP, acting as counsel to the Company, the aggregate proceeds for the
Note to be issued and sold to Buyer at the Closing, minus the fees to be paid directly from the proceeds of such Closing as set
forth in this Agreement, in the form of wire transfers of immediately available U.S. funds; and (ii) the Company shall deliver
to Buyer the Securities which Buyer is purchasing hereunder at the Closing, duly executed on behalf of the Company, together with
any other documents required to be delivered pursuant to this Agreement.
ARTICLE V
BUYER’S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to the Company,
that:
5.1 Investment
Purpose. Buyer is acquiring the Securities for its own account for investment only and not with a view towards, or for resale
in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities
Act; provided, however, that by making the representations herein, Buyer reserves the right to dispose of the Securities at any
time in accordance with or pursuant to an effective registration statement covering such Securities or an available exemption under
the Securities Act.
5.2 Accredited
Buyer Status. Buyer is an “accredited investor” as that term is defined in Rule 501(a) (3) of Regulation D,
as promulgated under the Securities Act.
5.3 Reliance
on Exemptions. Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and
understandings of Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of Buyer
to acquire the Securities.
5.4 Information.
Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the
Company and information Buyer deemed material to making an informed investment decision regarding its purchase of the Securities,
which have been requested by Buyer. Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the
Company and its management. Neither such inquiries, nor any other due diligence investigations conducted by Buyer or its advisors,
if any, or its representatives, shall modify, amend or affect Buyer’s right to rely on the Company’s and its subsidiaries’
representations and warranties contained in Article VI below. Buyer understands that its investment in the Securities involves
a high degree of risk. Buyer is in a position regarding the Company, which, based upon employment, family relationship or economic
bargaining power, enabled and enables Buyer to obtain information from the Company in order to evaluate the merits and risks of
this investment. Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities.
5.5 No
Governmental Review. Buyer understands that no United States federal or state Governmental Authority has passed on or made
any recommendation or endorsement of the Securities, or the fairness or suitability of the investment in the Securities, nor have
such Governmental Authorities passed upon or endorsed the merits of the offering of the Securities.
5.6 Authorization,
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of Buyer and is a valid
and binding agreement of Buyer, enforceable in accordance with its terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating
to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE
SELLER
Except as set forth
and disclosed in the disclosure schedule attached to this Agreement and made a part hereof, the Company hereby makes the following
representations and warranties to the Buyer:
6.1 Subsidiaries.
Except for one hundred percent (100%) ownership of each of the Subsidiaries, the Company has no subsidiaries and the Company does
not own, directly or indirectly, any outstanding voting securities of or other interests in, or have any control over, any other
Person. With respect to each of the Subsidiaries, all representations and warranties in this Article VI and elsewhere in this
Agreement shall be deemed repeated and re-made from and by each of the Subsidiaries, as if such representations and warranties
were independently made by each of such Subsidiaries in this Agreement. In addition, each representation and warranty contained
in this Article VI or otherwise set forth in this Agreement shall be deemed to mean and be construed to include the Company and
each of its subsidiaries, as applicable, regardless of whether each of such representations and warranties in Article VI specifically
refers to the Company’s subsidiaries or not.
6.2 Organization.
The Company and its subsidiaries are corporations, duly organized, validly existing and in good standing under the Laws of the
jurisdiction in which they are incorporated. The Company has the full corporate power and authority and all necessary certificates,
licenses, approvals and Permits to: (i) enter into and execute this Agreement and the Transaction Documents and to perform all
of its Obligations hereunder and thereunder; and (ii) own and operate its Assets and properties and to conduct and carry on its
business as and to the extent now conducted. The Company is duly qualified to transact business and is in good standing as a foreign
corporation in each jurisdiction where the character of its business or the ownership or use and operation of its Assets or properties
requires such qualification.
6.3 Authority
and Approval of Agreement; Binding Effect. The execution and delivery by Company of this Agreement and the Transaction Documents,
and the performance by Company of all of its Obligations hereunder and thereunder, including the issuance of the Securities,
have been duly and validly authorized and approved by Company and its board of directors pursuant to all applicable Laws and no
other corporate action or Consent on the part of Company, its board of directors, stockholders or any other Person is necessary
or required by the Company to execute this Agreement and the Transaction Documents, consummate the transactions contemplated herein
and therein, perform all of Company’s Obligations hereunder and thereunder, or to issue the Securities. This Agreement and
each of the Transaction Documents have been duly and validly executed by Company (and the officer executing this Agreement and
all such other Transaction Documents is duly authorized to act and execute same on behalf of Company) and constitute the valid
and legally binding agreements of Company, enforceable against Company in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and
remedies.
6.4 Capitalization.
The authorized capital stock of the Company consists of 34,000,000 shares of Common Stock and 1,000,000 shares of preferred stock,
par value $0.0001 per share (the “Preferred Stock”), of which 19,069,122 shares of Common Stock
are issued and outstanding as of the date hereof, and 210,000 shares of Preferred Stock are issued and outstanding as of the date
hereof (100,000 shares of Series A Preferred Stock and 110,000 shares of Series D Preferred Stock). All of such outstanding shares
have been validly issued and are fully paid and nonassessable. The Common Stock is currently quoted on the OTC Pink Sheets under
the trading symbol “MHCC”. The Company has received no notice, either oral or written, with respect to the continued
eligibility of the Common Stock for quotation on the Principal Trading Market, and the Company has maintained all requirements
on its part for the continuation of such quotation. No shares of Common Stock are subject to preemptive rights or any other similar
rights or any Encumbrances suffered or permitted by the Company. As of the date hereof: (i) there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible
into, any shares of capital stock of the Company or any of its subsidiaries, or Contracts, commitments, understandings or arrangements
by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock of the Company
or any of its subsidiaries, or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries; (ii)
there are no outstanding debt securities, notes, credit agreements, credit facilities or other Contracts or instruments evidencing
indebtedness of the Company or any of its subsidiaries, or by which the Company or any of its subsidiaries is or may become bound;
(iii) there are no outstanding registration statements with respect to the Company or any of its securities; (iv) there are no
agreements or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of their
securities under the Securities Act (except pursuant to this Agreement); (v) there are no financing statements securing obligations
filed in connection with the Company or any of its Assets; (vi) there are no securities or instruments containing anti-dilution
or similar provisions that will be triggered by this Agreement or any related agreement or the consummation of the transactions described herein or therein; and (vii) there are no outstanding securities or instruments of the Company which contain any redemption
or similar provisions, and there are no Contracts by which the Company is or may become bound to redeem a security of the Company.
The Company has furnished to the Buyer true, complete and correct copies of: (I) the Company’s Certificate of Incorporation,
as amended and as in effect on the date hereof (the “Certificate of Incorporation”); and (II) the Company’s
Bylaws, as in effect on the date hereof (the “Bylaws”). Except for the Certificate of Incorporation
and the Bylaws, there are no other shareholder agreements, voting agreements or other Contracts of any nature or kind that restrict,
limit or in any manner impose Obligations on the governance of the Company.
6.5 No
Conflicts; Consents and Approvals. The execution, delivery and performance of this Agreement and the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, including the issuance of any of the Securities,
will not: (i) constitute a violation of or conflict with the Certificate of Incorporation, Bylaws or any other organizational or
governing documents of Company; (ii) constitute a violation of, or a default or breach under (either immediately, upon notice,
upon lapse of time, or both), or conflicts with, or gives to any other Person any rights of termination, amendment, acceleration
or cancellation of, any provision of any Contract to which Company is a party or by which any of its Assets or properties may be
bound; (iii) constitute a violation of, or a default or breach under (either immediately, upon notice, upon lapse of time, or both),
or conflicts with, any Judgment; (iv) constitute a violation of, or conflict with, any Law (including United States federal and
state securities Laws and the rules and regulations of any market or exchange on which the Common Stock is quoted); or (v) result
in the loss or adverse modification of, or the imposition of any fine, penalty or other Encumbrance with respect to, any Permit
granted or issued to, or otherwise held by or for the use of, Company or any of Company’s Assets. The Company is not in violation
of its Certificate of Incorporation, Bylaws or other organizational or governing documents and the Company is not in default or
breach (and no event has occurred which with notice or lapse of time or both could put the Company in default or breach) under,
and the Company has not taken any action or failed to take any action that would give to any other Person any rights of termination,
amendment, acceleration or cancellation of, any Contract to which the Company is a party or by which any property or Assets of
the Company are bound or affected. The businesses of the Company are not being conducted, and shall not be conducted so long as
Buyer owns any of the Securities, in violation of any Law. Except as specifically contemplated by this Agreement, the Company is
not required to obtain any Consent of, from, or with any Governmental Authority, or any other Person, in order for it to execute,
deliver or perform any of its Obligations under this Agreement or the Transaction Documents in accordance with the terms hereof
or thereof, or to issue and sell the Securities in accordance with the terms hereof. All Consents which the Company is required
to obtain pursuant to the immediately preceding sentence have been obtained or effected on or prior to the date hereof. The Company
is not aware of any facts or circumstances which might give rise to any of the foregoing.
6.6 Issuance
of Securities. The Securities are duly authorized and, upon issuance in accordance with the terms hereof, shall be duly issued,
fully paid and non-assessable, and free from all Encumbrances with respect to the issue thereof, and will be issued in compliance
with all applicable United States federal and state securities Laws. Assuming the accuracy of the representations and warranties
of the Buyer set forth in Article V above, the offer and sale by the Company of the Securities is exempt from: (i) the registration
and prospectus delivery requirements of the Securities Act; and (ii) the registration and/or qualification provisions of all applicable
state and provincial securities and “blue sky” laws.
6.7 Due
Diligence Documents; Financial Statements. The Company is a non-reporting Company with the SEC and the Company’s
Common Stock is currently not registered pursuant to Section 12 of the Exchange Act, and as of the date hereof, the Company
is not required to file, and has not filed, any periodic reports with the SEC under Sections 13 or 15(d) of the Exchange Act.
The Company, however, has delivered certain reports, schedules, forms, statements and other due diligence documents and
materials to Buyer (referred to as the “Due Diligence Materials”). The Company shall also deliver
to Buyer true and complete copies of all draft filings, reports, schedules, statements and other documents voluntarily filed
or required to be filed by the Company under the Exchange Act, any rules of any Principal Trading Market, or any other
applicable Law that have been prepared but not filed as of the date hereof. None of the Due Diligence Materials contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to
make the statements or information therein, in light of the circumstances under which they were made, not misleading. In
addition, the Company has delivered to Buyer unaudited financial statements, including Statement of Income, Balance Sheet and
Statement of Cash Flows for fiscal year ending December 31, 2011, as well as unaudited financial statements, including
Statement of Income, Balance Sheet and Statement of Cash Flows for fiscal quarter ending March 31, 2012 and fiscal quarter
ending June 30, 2012 (collectively, the “Financial Statements”). All of the Financial Statements
have been prepared in accordance with GAAP, consistently applied, during the periods involved (except: (i) as may be
otherwise indicated in such Financial Statements or the notes thereto; or (ii) in the case of unaudited interim statements,
to the extent they may exclude footnotes or may be condensed or summary statements), and fairly present in all material
respects the consolidated financial position of the Company and its subsidiaries as of the dates thereof and the consolidated
results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). In addition, the Company represents and warrants that it has engaged a PCAOB approved
and registered accounting firm (the “Accounting Firm”) that has prepared audited
financial statements for the Company (which financial statements are approximately 90% completed as of the date hereof)
(the “Audited Financials”) that comply with in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC and the Principal Trading Market with respect
thereto. The Company further represents and warrants the it has paid (or will be paying from the proceeds of the sale of the
Note) the Accounting Firm preparing the Audited Financials in full for all work associated with the production and completion
of the Audited Financials.
6.8 Absence
of Certain Changes. Since the most recent date of the Financial Statements, none of the following have occurred:
(a) There
has been no event or circumstance of any nature whatsoever that has resulted in, or could reasonably be expected to result in,
a Material Adverse Effect; or
(b) Any
transaction, event, action, development, payment, or any other matter of any nature whatsoever entered into by the Company other
than in the Ordinary Course of Business.
6.9 Absence
of Litigation or Adverse Matters. (i) There is no Proceeding before or by any Governmental Authority or any other Person, pending,
or the best of Company’s know ledge, threatened or contemplated by, against or affecting the Company, its business or Assets;
(ii) there is no outstanding Judgments against or affecting the Company, its business or Assets; (iii) the Company is not in breach
or violation of any Contract; and (iv) the Company has not received any material complaint from any customer, supplier, vendor
or employee.
6.10 Liabilities
and Indebtedness of the Company. The Company does not have any Obligations of any nature whatsoever, except: (i) as disclosed
in the Financial Statements; or (ii) Obligations incurred in the Ordinary Course of Business since the date of the last Financial
Statements which do not or would not, individually or in the aggregate, exceed Ten Thousand Dollars ($10,000) or otherwise have
a Material Adverse Effect.
6.11 Title
to Assets. The Company has good and marketable title to, or a valid leasehold interest in, all of its Assets which are material
to the business and operations of the Company as presently conducted, free and clear of all Encumbrances or restrictions on the
transfer or use of same. Except as would not have a Material Adverse Effect, the Company’s Assets are in good operating condition
and repair, ordinary wear and tear excepted, and are free of any latent or patent defects which might impair their usefulness,
and are suitable for the purposes for which they are currently used and for the purposes for which they are proposed to be used.
6.12 Real
Estate.
(a) Real
Property Ownership. The Company does not own any Real Property.
(b) Real
Property Leases. Except for ordinary and customary office leases for the Company’s offices delivered to Buyer with the
Due Diligence Materials (the “Company Leases”), the Company does not lease any other Real Property.
With respect to each of the Company Leases: (i) the Company has been in peaceful possess ion of the property leased thereunder
and neither the Company nor the landlord is in default thereunder; (ii) no waiver, indulgence or postponement of any of the Obligations
thereunder has been granted by the Company or landlord thereunder; and (iii) there exists no event, occurrence, condition or
act known to the Company which, upon notice or lapse of time or both, would be or could become a default thereunder or which
could result in the termination of the Company Leases, or any of them, or have a Material Adverse Effect on the business of the
Company, its Assets or its operations or financial results. The Company has not violated nor breached any provision of any such
Company Leases, and all Obligations required to be performed by the Company under any of such Company Leases have been fully,
timely and properly performed. The Company has delivered to the Buyer true, correct and complete copies of all Company Leases,
including all modifications and amendments thereto, whether in writing or otherwise. The Company has not received any written
or oral notice to the effect that any of the Company Leases will not be renewed at the termination of the term of such Company
Leases, or that any of such Company Leases will be renewed only at higher rents.
6.13 Material
Contracts. An accurate, current and complete copy of each of the Material Contracts has been furnished to Buyer as part of
the Due Diligence Materials, and each of the Material Contracts constitutes the entire agreement of the respective parties thereto
relating to the subject matter thereof. There are no outstanding offers, bids, proposals or quotations made by Company which, if
accepted, would create a Material Contract with Company. Each of the Material Contracts is in full force and effect and is a valid
and binding Obligation of the parties thereto in accordance with the terms and conditions thereof. To the knowledge of the Company
and its officers, all Obligations required to be performed under the terms of each of the Material Contracts by any party thereto
have been fully performed by all parties thereto, and no party to any Material Contracts is in default with respect to any term or
condition thereof, nor has any event occurred which, through the passage of time or the giving of notice, or both, would constitute
a default thereunder or would cause the acceleration or modification of any Obligation of any party thereto or the creation of
any Encumbrance upon any of the Assets of the Company. Further, the Company has received no notice, nor does the Company have any
knowledge, of any pending or contemplated termination of any of the Material Contracts and, no such termination is proposed or
has been threatened, whether in writing or orally.
6.14 Compliance
with Laws. To the knowledge of the Company and its officers, the Company is and at all times has been in full compliance with
all Laws. The Company has not received any notice that it is in violation of, has violated, or is under investigation with respect
to, or has been threatened to be charged with, any violation of any Law.
6.15 Intellectual
Property. The Company owns or possesses adequate and legally enforceable rights or licenses to use all trademarks, trade names,
service marks, service xxxx registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and all other intellectual property rights necessary to conduct its business as now
conducted. The Company does not have any knowledge of any infringement by the Company of trademark, trade name rights, patents,
patent rights, copyrights, inventions, licenses, service names, service marks, service xxxx registrations, trade secret or other
intellectual property rights of others, and, to the knowledge of the Company, there is no Claim being made or brought against,
or to the Company’s knowledge, being threatened against, the Company regarding trademark, trade name, patents, patent rights,
invention, copyright, license, service names, service marks, service xxxx registrations, trade secret or other intellectual property
infringement; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing.
6.16 Labor
and Employment Matters. The Company is not involved in any labor dispute or, to the knowledge of
the Company, is any such dispute threatened. To the knowledge of the Company and its officers, none of the Company’s employees
is a member of a union and the Company believes that its relations with its employees are good. To the knowledge of the Company
and its officers, the Company has complied in all material respects with all Laws relating to employment matters, civil rights
and equal employment opportunities.
6.17 Employee
Benefit Plans. The Company does not have and has not ever maintained, and has no Obligations with respect to any employee benefit
plans or arrangements, including employee pension benefit plans, as defined in Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), multi
employer plans, as defined in Section 3(37) of ERISA, employee welfare benefit plans, as defined in Section 3(1) of ERISA, deferred
compensation plans, stock option plans, bonus plans, stock purchase plans, hospitalization, disability and other insurance plans,
severance or termination pay plans and policies, whether or not described in Section 3(3) of ERISA, in which employees, their spouses
or dependents of the Company participate (collectively, the “Employee Benefit Plans”). To the Company’s
knowledge, all Employee Benefit Plans meet the minimum funding standards of Section 302 of ERlSA, where applicable, and each such
Employee Benefit Plan that is intended to be qualified within the meaning of Section 401 of the Internal Revenue Code of 1986
is qualified. No withdrawal liability has been incurred under any such Employee Benefit Plans and no “Reportable Event”
or “Prohibited Transaction” (as such terms are defined in ERlSA), has occurred with respect to any such Employee Benefit
Plans, unless approved by the appropriate Governmental Authority. To the Company’s knowledge, the Company has promptly paid and
discharged all Obligations arising under ERISA of a character which if unpaid or unperformed might result in the imposition of
an Encumbrance against any of its Assets or otherwise have a Material Adverse Effect.
6.18 Tax
Matters. The Company has made and timely filed all Tax Returns required by any jurisdiction to which it is subject, and each
such Tax Return has been prepared in compliance with all applicable Laws, and all such Tax Returns are true and accurate in all
respects. Except and only to the extent that the Company has set aside on its books provisions reasonably adequate for the payment
of all unpaid and unreported Taxes, the Company has timely paid all Taxes shown or determined to be due on such Tax Returns, except
those being contested in good faith, and the Company has set aside on its books provision reasonably adequate for the payment of
all Taxes for periods subsequent to the periods to which such Tax Returns apply. There are no unpaid Taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.
The Company has withheld and paid all Taxes to the appropriate Governmental Authority required to have been withheld and paid in
connection with amounts paid or owing to any Person. There is no Proceeding or Claim for refund now in progress, pending or threatened
against or with respect to the Company regarding Taxes.
6.19 Insurance.
The Company is covered by valid, outstanding and enforceable policies of insurance which were issued to it by reputable insurers
of recognized financial responsibility, covering its properties, Assets and businesses against losses and risks normally insured
against by other corporations or entities in the same or similar lines of businesses as the Company is engaged and in coverage
amounts which are prudent and typically and reasonably carried by such other corporations or entities (the “Insurance Policies”).
Such Insurance Policies are in full force and effect, and all premiums due thereon have been paid. None of the Insurance Policies
will lapse or terminate as a result of the transactions contemplated by this Agreement. The Company has complied with the provisions
of such Insurance Policies. The Company has not been refused any insurance coverage sought or applied for and the Company
does not have any reason to believe that it will not be able to renew its existing Insurance Policies as and when such Insurance
Policies expire or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that
would not materially and adversely affect the condition, financial or otherwise, or the earnings, business or operations of the
Company.
6.20 Permits.
The Company possesses all Permits necessary to conduct its business, and the Company has not received any notice of, or is otherwise
involved in any Proceedings relating to, the revocation or modification of any such Permits. All such Permits are valid and in
full force and effect and the Company is in full compliance with the respective requirements of all such Permits.
6.21 Bank
Accounts; Business Location. Schedule 6.21 sets forth, with respect to each account of the Company with any bank, broker
or other depository institution: (i) the name and account number of such account; (ii) the name and address of the institution
where such account is held; (iii) the name of any Person(s) holding a power of attorney with respect to such account, if any;
and (iv) the names of all authorized signatories and other Persons authorized to withdraw funds from each such account. The Company
has no office or place of business other than as identified on Schedule 6.21 and the Company’s principal places of
business and chief executive offices are indicated on Schedule 6.21. All books and records of the Company and other
material Assets of the Company are held or located at the principal offices of the Company indicated on Schedule 6.21.
6.22 Environmental
Laws. The Company is and has at all times been in compliance with any and all applicable Environmental Requirements, and there
are no pending Claims against the Company relating to any Environmental Requirements, nor to the best knowledge of the Company,
is there any basis for any such Claims.
6.23 Illegal
Payments. Neither the Company, nor any director, officer, agent, employee or other Person acting on behalf of the Company has,
in the course of his actions for, or on behalf of, the Company: (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment to any foreign or domestic government official or employee.
6.24 Related
Party Transactions. Except for arm’s length transactions pursuant to which the Company makes payments in the Ordinary Course
of Business upon terms no less favorable than the Company could obtain from third parties, none of the officers, directors or employees
of the Company, nor any stockholders who own, legally or beneficially, five percent (5%) or more of the issued and outstanding
shares of any class of the Company’s capital stock (each a “Material Shareholder”), is presently a party
to any transaction with the Company (other than for services as employees, officers and directors), including any Contract providing
for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments
to or from, any officer, director or such employee or Material Shareholder or, to the best knowledge of the Company, any other
Person in which any officer, director, or any such employee or Material Shareholder has a substantial or material interest in or
of which any officer, director or employee of the Company or Material Shareholder is an officer, director, trustee or partner.
There are no Claims or disputes of any nature or kind between the Company and any officer, director or employee of the Company
or any Material Shareholder, or between any of them, relating to the Company and its business.
6.25 Internal
Accounting Controls. The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset accountability; (iii) access to Assets is permitted only in accordance with management’s general or specific authorization;
and (iv) the recorded accountability for Assets is compared with the existing Assets at reasonable intervals and appropriate action
is taken with respect to any differences.
6.26 Acknowledgment
Regarding Buyer’s Purchase of the Securities. The Company acknowledges and agrees that Buyer is acting solely in the capacity
of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges
that Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement
and the transactions contemplated hereby and any advice given by Buyer or any of its representatives or agents in connection with
this Agreement and the transactions contemplated hereby is merely incidental to Buyer’s purchase of the Securities. The Company
further represents to Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation
by the Company and its representatives.
6.27 Seniority. No indebtedness or other equity or security of the Company is senior
to the Note in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, except only
purchase money security interests (which are senior only as to underlying Assets covered thereby).
6.28 Brokerage
Fees. There is no Person acting on behalf of the Company who is entitled to or has any claim for any brokerage or finder’s
fee or commission in connection with the execution of this Agreement or the consummation of the transactions contemplated hereby.
6.29 Full
Disclosure. All the representations and warranties made by Company herein or in the Schedules hereto, and all of the statements,
documents or other information pertaining to the transact ion contemplated herein made or given by Company, its agents or representatives,
are complete and accurate, and do not omit any information required to make the statements and information provided, in light of
the transaction contemplated herein and in light of the circumstances under which they were made, not misleading, accurate and
meaningful.
ARTICLE VII
COVENANTS
7.1 Negative
Covenants.
(a) Indebtedness.
So long as the Note is outstanding, neither the Company, nor any of its subsidiaries shall, either directly or indirectly,
create, assume, incur or have outstanding any indebtedness for borrowed money of any nature or kind (including purchase money
indebtedness), or become liable, whether as endorser, guarantor, surety or otherwise, for any Obligation of any other Person,
except for: (i) the Note; (ii) Obligations for accounts payable, other than for money borrowed, incurred in the Ordinary
Course of Business; and (iii) indebtedness that is subordinated to the Obligations owed to Buyer under the Note, as a matter
of law, or pursuant to a subordination agreement, in form and content acceptable to Buyer in its
sole discretion, which shall include an indefinite standstill on remedies and payment blockage rights during any default
hereunder.
(b) Encumbrances.
So long as the Note is outstanding, neither the Company, nor any of its subsidiaries shall, either directly or indirectly, create,
assume, incur or suffer or permit to exist any Encumbrance upon any Asset of the Company or any of its subsidiaries which is senior
to the security interest and rights of the Buyer, whether owned at the date hereof or hereafter acquired.
(c) Intentionally
Left Blank.
(d) Transfer;
Merger. So long as the Note is outstanding, neither the Company, nor any of its subsidiaries shall, either directly or indirectly,
permit or enter into any transaction involving a “Change in Control” (as hereinafter defined), or any other merger, consolidation,
sale, transfer, license, lease, encumbrance or otherwise disposition of all or substantially all of its properties or business
or all or substantially all of its Assets, except for the sale, lease or licensing of property or Assets of the Company in the
Ordinary Course of Business. For purposes of this Agreement, the term “Change of Control” shall mean any
sale, conveyance, assignment or other transfer, directly or indirectly, of any ownership interest of the Company or any of its
subsidiaries which results in any change in the identity of the individuals or entities previously having the power to direct,
or cause the direction of, the management and policies of the Company or any of its subsidiaries, or the grant of a security interest
in any ownership interest of any Person directly or indirectly controlling the Company, which could result in a change in the identity
of the individuals or entities previously having the power to direct, or cause the direct ion of, the management and policies of
the Company or any of its subsidiaries.
(e) Distributions;
Restricted Payments. So long as the Note is outstanding, neither the Company, nor any of its subsidiaries shall, either directly
or indirectly: (i) purchase or redeem any shares of its capital stock; (ii) declare or pay any dividends or distributions, whether
in cash or otherwise, or set aside any funds for any such purpose; (iii) make any loans, advances or extensions of credit to, or
investments in, any Person, including, without limitation, any Affiliates of the Company or its subsidiaries, or the Company’s
officers, directors, employees or Material Shareholders, or the officers, directors, employees of any subsidiary of the Company;
or (iv) increase the annual salary paid to any officers or directors of the Company or any of its subsidiaries as of the Effective
Date, unless any such increase is part of a written employment contract with any such officers entered into prior to the Effective
Date, a copy of which has been delivered to and approved by the Buyer.
(f) Use
of Proceeds. The proceeds from the purchase and sale of the Note shall be used by the Company for general working capital purposes.
(g) Business
Activities; Change of Legal Status and Organizational Documents. Neither the Company, nor any of its subsidiaries, shall:
(i) engage in any line of business other than the businesses engaged in as of the Effective Date and business reasonably related
thereto; (ii) change its respective name, organizational identification number, its type of organization, its jurisdiction of
organization or other legal structure; or (iii) permit its Certificate of Incorporation, Bylaws or other organizational documents
to be amended or modified in any way which could reasonably be expected to have a Material Adverse Effect.
(h) Transactions
with Affiliates. Neither the Company, nor any of its subsidiaries, shall enter into any transaction with any of its Affiliates,
officers, directors, employees, Material Shareholders or other insiders, except in the Ordinary Course
of Business and upon fair and reasonable terms that are no less favorable to the Company or its subsidiaries, as applicable, than
it would obtain in a comparable arm’s length transaction with a Person not an Affiliate of the Company or any of its subsidiaries.
7.2 Affirmative
Covenants.
(a) Corporate
Existence. The Company and each of its subsidiaries shall at all times preserve and maintain their respective: (i) existence
and good standing in the jurisdiction of its and their organization; and (ii) its and their qualification to do business and good
standing in each jurisdiction where the nature of its and their business makes such qualification necessary, and shall at all times
continue as a going concern in the business which the Company is presently conducting.
(b) Tax
Liabilities. The Company and each of its subsidiaries shall at all times pay and discharge all Taxes upon, and all Claims (including
claims for labor, materials and supplies) against the Company and each of its subsidiaries or any of its or their properties or
Assets, before the same shall become delinquent and before penalties accrue thereon, unless and to the extent that the same are
being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with XXXX are being maintained.
(c) Notice
of Proceedings. The Company shall, promptly, but not more than five (5) days after knowledge thereof shall have come to the
attention of any officer of the Company, give written notice to the Buyer of all threatened or pending Proceedings before any Governmental
Authority affecting the Company or any of its subsidiaries.
(d) Material
Adverse Effect. The Company shall, promptly, but not more than five (5) days after knowledge thereof shall have come to the
attention of any officer of the Company, give written notice to the Buyer of any event, circumstance, fact or other matter that
could in any way have or be reasonably expected to have a Material Adverse Effect.
(e) Notice
of Default. The Company shall, promptly, but not more than five (5) days after the commencement thereof, give notice to the
Buyer in writing of the occurrence of any “Event of Default” (as such term is defined in any of the Transaction Documents)
or of any event which, with the lapse of time, the giving of notice or both, would constitute an Event of Default hereunder or
under any other Transaction Documents.
(f) Maintain
Property. The Company and each of its subsidiaries shall at all times maintain, preserve and keep all of their respective
Assets in good repair, working order and condition, normal wear and tear excepted, and shall from time to time, as the
Company deems appropriate in its reasonable judgment, make all needful and proper repairs, renewal s, replacements, and
additions thereto so that at all times the efficiency thereof shall be fully preserved and maintained. The Company shall
permit Buyer to examine and inspect such Assets (and all assets and properties of its subsidiaries) at all reasonable times
upon reasonable notice during business hours. During the continuance of any Event of Default here under or under any
Transaction Documents, the Buyer shall, at the Company’s expense, have the right to make additional inspections without
providing advance notice.
(g) Maintain
Insurance. The Company and its subsidiaries shall at all times insure and keep insured with insurance companies acceptable
to Buyer, all insurable property owned by the Company and its subsidiaries, respectively and as applicable, which is of a character
usually insured by companies similarly situated and operating like properties, against loss or damage from environmental, fire and
such other hazards or risks as are customarily insured against by companies similarly situated and operating like properties; and
shall similarly insure employers’, public and professional liability risks. Prior to the Closing Date, the Company shall deliver
to the Buyer a certificate setting forth in summary form the nature and extent of the insurance maintained pursuant to this Section.
All such policies of insurance must be satisfactory to Buyer in relation to the amount and term of the Note and type and value
of the Assets of the Company and the assets and properties of its subsidiaries, shall identify Buyer as sole/lender’s loss payee
and as an additional insured. In the event the Company fails to provide Buyer with evidence of the insurance coverage required
by this Section or at any time hereafter shall fail to obtain or maintain any of the policies of insurance required above, or to
pay any premium in whole or in part relating thereto, then the Buyer, without waiving or releasing any obligation or default by
the Company hereunder, may at any time (but shall be under no obligation to so act), obtain and maintain in such policies of insurance
and pay such premium and take any other action with respect thereto, which Buyer deems advisable. This insurance coverage: (i)
may, but need not, protect the Company’s interest in such property; and (ii) may not pay any claim made by, or against, the Company
in connection with such property. The Company may later request that the Buyer cancel any such insurance purchased by Buyer, but
only after providing Buyer with evidence that the insurance coverage required by this Section is in force. The costs of such insurance
obtained by Buyer, through and including the effective date such insurance coverage is canceled or expires, shall be payable on
demand by the Company to Buyer, together with interest at the highest non-usurious rate permitted by law on such amounts until
repaid and any other charges by Buyer in connection with the placement of such insurance. The costs of such insurance, which may
be greater than the cost of insurance which the Company may be able to obtain on its own, together with interest thereon at the
highest non-usurious rate permitted by Law and any other charges incurred by Buyer in connection with the placement of such insurance
may be added to the total Obligations due and owing by the Company hereunder and under the Note to the extent not paid by the Company.
(h) Reporting
Status; Listing. The Company shall, on or about forty-five (45) days from the Effective Date (the “Reporting Date”):
(i) provide and deliver to Buyer a complete copy of the Audited Financials containing an unqualified opinion of the Accounting
Firm; and (ii) file a Form 10 and comply with any other requirements to become a full reporting Company required to file reports
with the SEC under the Exchange Act, and have its Common Stock registered with the SEC under Section 12 of the Exchange Act, and
provide to Buyer evidence reasonably acceptable to the Buyer of same. In addition, immediately after the Form 10 becomes effective
with the SEC, on or about sixty (60) days after the Reporting Date, the Company shall file all required applications and documents
to have its Common Stock quoted and listed in the OTC Bulletin Board, which shall be the Company’s Principal Trading Market. In
that regard, the Company shall file all required applications, reports, statements and all other documents, and pay all required
fees and costs, necessary or required in order for the Company to accomplish the foregoing requirements on or about sixty (60)
days from and after the Reporting Date, so long as Buyer owns, legally or beneficially, any of the Securities, the Company shall:
(i) file in a timely manner all reports required to be filed under the Securities Act, the Exchange Act or any securities Laws
and regulations thereof applicable to the Company of any state of the United States, or by the rules and regulations of the Principal
Trading Market, and, to provide a copy thereof to the Buyer promptly after such filing; (ii) not terminate its status as an issuer
required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations there under would otherwise
permit such termination; (iii) if required by the rules and regulations of the Principal Trading Market, promptly secure the listing
of the Incentive Shares or any other shares of Common Stock issuable to Buyer under any of the Transaction Documents upon the Principal
Trading Market (subject to official notice of issuance) and, take all reasonable action under its control to maintain the continued
listing, quotation and trading of its Common Stock (including, without limitation, the Incentive Shares or any other shares of
Common Stock issuable to Buyer under any of the Transaction Documents) on the Principal Trading Market, and the Company shall
comply in all respects with the Company’s reporting, filing and other Obligations under the bylaws or rules of the Principal Trading
Market, the Financial Industry Regulatory Authority, Inc. and such other Governmental Authorities, as applicable. The Company shall
promptly provide to Buyer copies of any notices it receives from the SEC or any Principal Trading Market, to the extent any such
notices could in any way have or be reasonably expected to have a Material Adverse Effect.
(i) Rule
144. With a view to making available to Buyer the benefits of Rule 144 under the Securities Act (“Rule
144”), or any similar rule or regulation of the SEC that may at any time permit Buyer to sell any of the Securities
to the public without registration, the Company represents and, warrants that: (i) on or about sixty (60) days after the Reporting
Date, the Company shall be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act; (ii) sixty (60) days from
and after the Reporting Date, the Company will file all required reports under Section 13
or 15(d) of the Exchange Act, as applicable; and (iii) the Company is not an issuer defined as a “Shell Company”
(as hereinafter defined). For the purposes hereof, the term “Shell Company” shall mean an issuer that
meets the description defined under Rule 144. In addition, on or about sixty (60) days from and after the Reporting Date, so long
as Buyer owns, legally or beneficially, any of the Securities, the Company shall, at its sole expense:
(i) Make,
keep and ensure that adequate current public information with respect to the Company, as required in accordance with Rule 144,
is publicly available;
(ii) furnish
to the Buyer, promptly upon reasonable request: (A) a written statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act; and (b) such other information as may be reasonably requested
by Buyer to permit the Buyer to sell any of the Securities pursuant to Rule 144 without limitation or restriction; and
(iii) promptly
at the request of Buyer, give the Company’s transfer agent (the “Transfer Agent”) instructions to the
effect that, upon the Transfer Agent’s receipt from Buyer of a certificate (a “Rule 144 Certificate”)
certifying that Buyer’s holding period (as determined in accordance with the provisions of Rule 144) for any portion of
the Securities which Buyer proposes to sell (or any portion of such Securities which Buyer is not presently selling, but for which
Buyer desires to remove any restrictive legends applicable thereto) (the “Securities Being Sold”) is not less
than six (6) months, and receipt by the Transfer Agent of the “Rule 144 Opinion” (as hereinafter defined) from the
Company or its counsel (or from Buyer and its counsel as permitted below), the Transfer Agent is to effect the transfer (or issuance
of a new certificate without restrictive legends, if applicable) of the Securities Being Sold and issue to Buyer or transferee(s)
thereof one or more stock certificates representing the transferred (or reissued) Securities Being Sold without any restrictive
legend and without recording any restrictions on the transferability of such shares on the Transfer Agent’s books and records.
In this regard, upon Buyer’s request, the Company shall have an affirmative obligation to cause its counsel to promptly
issue to the Transfer Agent a legal opinion providing that, based on the Rule 144 Certificate, the Securities Being Sold may be
sold pursuant to the provisions of Rule 144, even in the absence of an effective registration statement, or re-issued without
any restrictive legends pursuant to the provisions of Rule 144, even in the absence of an effective
registration statement (the “Rule 144 Opinion”). If the Transfer Agent requires any additional documentation
in connection with any proposed transfer (or re-issuance) by Buyer of any Securities Being Sold, the Company shall promptly deliver
or cause to be delivered to the Transfer Agent or to any other Person, all such additional documentation as may be necessary to
effectuate the transfer (or re-issuance) of the Securities Being Sold and the issuance of an unlegend certificate to any such
Buyer or any transferee thereof, all at the Company’s expense. Any and all fees, charges or expenses, including, without
limitation, attorneys’ fees and costs, incurred by Buyer in connection with issuance of any Securities, or the removal
of any restrictive legends thereon, or the transfer of any such Securities to any assignee of Buyer, shall be paid by the Company,
and if not paid by the Company, the Buyer may, but shall not be required to, pay any such fees, charges or expenses, and the amount
thereof, together with interest thereon at the highest non-usurious rate permitted by law, from the date of outlay, until paid
in full, shall be due and payable by the Company to Buyer immediately upon demand therefor, and all such amounts advanced by
the Buyer shall be additional sums advanced and due under the Note and secured under the Transaction Documents.
(j) Matters
With Respect to Securities.
(i) Issuance
of Conversion Shares. The parties hereto acknowledge that pursuant to the terms of the Note, Buyer has the right, at its discretion,
to convert amounts due under the Note into Common Stock in accordance with the terms of the Note. In the event, for any reason,
the Company fails to issue, or cause the Transfer Agent to issue, any portion of the Common Stock issuable upon conversion of the
Note (the “Conversion Shares”) to Buyer in connection with the exercise by Buyer of any of its conversion rights
under the Note, then the parties hereto acknowledge that Buyer shall irrevocably be entitled to deliver to the Transfer Agent,
on behalf of itself and the Company, a “Conversion Notice” (as defined in the Note) requesting the issuance of the Conversion
Shares then issuable in accordance with the terms of the Note, and the Transfer Agent, provided they are the acting transfer agent
for the Company at the time, shall, and the Company hereby irrevocably authorizes and directs the Transfer Agent to, without any
further confirmation or instructions from the Company, issue the Conversion Shares applicable to the Conversion Notice then being
exercised, and surrender to a nationally recognized overnight courier for delivery to Buyer at the address specified in the Conversion
Notice, a certificate of the Common Stock of the Company, registered in the name of Buyer, for the number of Conversion Shares
to which Buyer shall be then entitled under the Note, as set forth in the Conversion Notice.
(ii) Issuance
of Additional Common Stock Under Section 7.5. The parties hereto acknowledge that pursuant to Section 7.5 below, the Company
has agreed to issue, simultaneously with the execution of this Agreement and in the future, certain shares of the Company’s Common
Stock in accordance with the terms of Section 7.5 below. In the event, for any reason, the Company fails to issue, or cause its
Transfer Agent to issue, any portion of the Common Stock issuable to Buyer under Section 7.5, either now or in the future, then
the parties hereto acknowledge that Buyer shall irrevocably be entitled to deliver to the Transfer Agent, on behalf of itself and
the Company, a written instruction requesting the issuance of the shares of Common Stock then issuable in accordance with Section
7.5 below, and the Transfer Agent, provided they are the acting transfer agent for the Company at the time, shall, and the Company
hereby irrevocably authorizes and directs the Transfer Agent to, without any further confirmation or instructions from the Company,
issue such shares of the Company’s Common Stock as directed by Buyer, and surrender to a nationally recognized overnight courier
for delivery to Buyer at the address specified in the Buyer’s notice, a certificate of the Common Stock of the Company, registered
in the name of Buyer, for the number of shares of Common Stock issuable to Buyer in accordance with Section 7.5.
(iii) Removal
of Restrictive Legends. In the event that Buyer has any shares of the Company’s Common Stock bearing any restrictive
legends, and Buyer, through its counsel or other representatives, submits to the Transfer Agent any such shares for the removal
of the restrictive legends thereon, whether in connection with a sale of such shares pursuant to any exempt ion
to the registration requirements under the Securities Act, or otherwise, and the Company and or its counsel refuses or fails for
any reason to render an opinion of counsel or any other documents or certificates required for the removal of the restrictive
legends, then the Company hereby agrees and acknowledges that Buyer is hereby irrevocably and expressly authorized to have counsel
to Buyer render any and all opinions and other certificates or instruments which may be required for purposes of removing such
restrictive legends, and the Company hereby irrevocably authorizes and directs the Transfer Agent to, without any further confirmation
or instructions from the Company, issue any such shares without restrictive legends as instructed by Buyer, and surrender to a
common carrier for overnight delivery to the address as specified by Buyer, certificates, registered in the name of Buyer or its
designees, representing the shares of Common Stock to which Buyer is entitled, without any restrictive legends and otherwise freely
transferable on the books and records of the Company.
(iv) Authorized
Agent of the Company. The Company hereby irrevocably appoints the Buyer and its counsel and its representatives, each as the
Company’s duly authorized agent and attorney-in-fact for the Company for the purposes of authorizing and instructing the Transfer
Agent to process issuances, transfers and legend removals upon instructions from Buyer, or any counsel or representatives of Buyer,
as specifically contemplated herein. The authorization and power of attorney granted hereby is coupled with an interest and is
irrevocable so long as any obligations of the Company under Note remain outstanding, and so long as the Buyer owns or has the right
to receive, any shares of the Company’s Common Stock hereunder. In this regard, the Company hereby confirms to the Transfer Agent
and the Buyer that it can NOT and will NOT give instructions, including stop orders or otherwise, inconsistent with
the terms of this Agreement with regard to the matters contemplated herein, and that the Buyer shall have the absolute right to
provide a copy of this Agreement to the Transfer Agent as evidence of the Company’s irrevocable authority for Buyer and Transfer
Agent to process issuances, transfers and legend removals upon instructions from Buyer, or any counsel or representatives of Buyer,
as specifically contemplated herein, without any further instructions, orders or confirmations from the Company.
(v) Injunction
and Specific Performance. The Company specifically acknowledges and agrees that in the event of a breach or threatened breach
by the Company of any provision of this Section 7.2(j), the Buyer will be irreparably damaged and that damages at law would be an
inadequate remedy if this Agreement were not specifically enforced. Therefore, in the event of a breach or threatened breach of
any provision of this Section 7.2(j) by the Company, the Buyer shall be entitled to obtain, in addition to all other rights or remedies
Buyer may have, at law or in equity, an injunction restraining such breach, without being required to show any actual damage or
to post any bond or other security, and/or to a decree for specific performance of the provisions of this Section 7.2(j).
7.3 Reporting
Requirements. The Company shall agree as follows:
(a) Annual
Financial Statements Before Reporting Date. At or before the time required by the Principal Trading Market for filing of the Company’s
Form 10-K (or equivalent filing), to file with the Principal Trading Market, and to deliver a copy of such filing to the Buyer,
of the annual financial statements of the Company, including all information required by the Principal
Trading Market to be included in a Form 10-K filing (or its equivalent); and
(b) Annual
Audited Financial Statements After Reporting Date. From and after the Reporting Date, at or before the time required by the
SEC for filing of the Company’s Form 10-K, to file with the SEC, and to deliver a copy of such filing to the Buyer, of the annual
audited financial statements of the Company, including all information required by the SEC to be included in a Form 10-K filing;
and
(c) Quarterly
Financial Statements Before Reporting Date. At or before the time required by the Principal Trading Market for filing of the
Company’s Form 10-Q (or equivalent filing), to file with the Principal Trading Market, and to deliver a copy of such filing to
the Buyer, of the quarterly financial statements of the Company, including all information required by the Principal Trading Market
to be included in a Form 10-Q filing (or its equivalent); and
(d) Quarterly
Financial Statements After Reporting Date. From and after the Reporting Date, at or before the time required by the SEC for
filing of the Company’s Form 10-Q, to file with the SEC, and to deliver a copy of such filing to the Buyer, of the quarterly financial
statements of the Company, including all information required by the SEC to be included in a Form 10-Q filing; and
(e) Monthly
Compliance Certificate. On the first 10th day of every month, the Company shall deliver to the Buyer a
compliance certificate in substantial substance and form as attached hereto as Exhibit “B”, including
a balance sheet and income statement of the Company, on a consolidated basis, as of the then ended calendar month.
7.4 Fees
and Expenses.
(a) Transaction
Fees. The Company agrees to pay to the Buyer a funding fee equal to five percent (5.0%) of the original face amount of the
Note, due and payable at the Closing. Such fee may be withheld and deducted by Buyer from the proceeds of the Note otherwise payable
to the Company. In addition, the Company agrees to pay to its counsel, Lucosky Xxxxxxxx LLP, a fee pursuant to a separate agreement
in connection with such firm’s work in connection with such firm’s preparation and filing of an S-1 registration statement for
the Company, which fees the Company agrees may be withheld and deducted by the Buyer from the proceeds of the Note otherwise payable
to the Company, and paid directly to such law firm.
(b) Due
Diligence Fees. The Company agrees to pay to the Buyer a due diligence fee equal to Ten Thousand and No/100 Dollars ($10,000.00),
which shall be due and payable in full on the Effective Date, or any remaining portion thereof shall be due and payable on the
Effective Date if a portion of such fee was paid upon the execution of any term sheet related to this Agreement.
(c) Document
Review and Legal Fees. The Company agrees to pay to the Buyer or its counsel a document review and legal fee equal to Ten Thousand
and No/100 Dollars ($10,000.00), which shall be due and payable in full on the Effective Date, or any remaining portion thereof
shall be due and payable on the Effective Date if a portion of such fee was paid upon the execution of any term sheet related to
this Agreement. The Company also agrees to be responsible for the prompt payment of all legal fees and expenses of the Company
and its own counsel and other professionals incurred by the Company in connection with the negotiation and execution of this Agreement
and the Transaction Documents.
(d) Other
Fees. The Company also agrees to pay to the Buyer (or any designee of the Buyer), upon demand, or to otherwise be responsible
for the payment of, any and all other costs, fees and expenses, including the reasonable fees, costs, expenses and disbursements
of counsel for the Buyer and of any experts and agents, which the Buyer may incur or which may otherwise be due and payable in
connection with: (i) the administration, amendment, waiver or other modification or termination of this Agreement or any other
Transaction Documents; (ii) any documentary stamp taxes, intangibles taxes, recording fees, filing fees, or other similar taxes,
fees or charges imposed by or due to any Governmental Authority in connection with this Agreement or any other Transaction Documents; (iii) the exercise or enforcement of any of the rights of the Buyer under this Agreement or the Transaction Documents; or (iv)
the failure by the Company to perform or observe any of the provisions of this Agreement or any of the Transaction Documents. Included
in the foregoing shall be the amount of all expenses paid or incurred by Buyer in consulting with counsel concerning any of its
rights under this Agreement or any other Transaction Document or under applicable law. To the extent any such costs, fees, charges,
taxes or expenses are incurred prior to the funding of proceeds from the Closing, same shall be paid directly from the proceeds
of the Closing. All such costs and expenses, if not so immediately paid when due or upon demand thereof, shall bear interest from
the date of outlay until paid, at the highest rate set forth in the Debenture, or if none is so stated, the highest rate allowed
by law. All of such costs and expenses shall be additional Obligations of the Company to Buyer secured under the Transaction Documents.
The provisions of this Subsection shall survive the termination of this Agreement. Notwithstanding anything which may be contained
in this Section 7.4(d) to the contrary, the only cash fees and expenses (other than stamp and UCC Financing Statement filing expenses)
which shall be assessed by the Buyer upon Closing are provided in Sections 7.4(a), (b) and (c).
7.5 Incentive
Shares.
(a) Share
Issuance. The Company shall pay to Buyer a fee for corporate advisory and investment banking services provided by the Buyer
to the Company prior to the Effective Date by issuing to Buyer that number of shares of the Company’s Common Stock that
equal to a dollar amount equal to $200,000.00 (the “Share Value”). For purposes of determining the number
of Incentive Shares issuable to Buyer under this Section 7.5(a), the Company’s Common Stock shall be valued at the volume
weighted average price as of the close of the business day immediately prior to the date the Company executes this Agreement (the
“Valuation Date”), as reported by Bloomberg (the “VWAP”). The
Buyer shall confirm to the Company in writing, the VWAP for the Common Stock as of the Valuation Date, and the corresponding number
of Incentive Shares issuable to the Buyer based on such price. The Company shall instruct its Transfer Agent to issue certificates
representing the Incentive Shares issuable to the Buyer immediately upon the Company’s execution of this Agreement, and
shall cause its Transfer Agent to deliver such certificates to Buyer within five (5) business days from the date the Company
executes this Agreement. In the event such certificates representing the Incentive Shares issuable hereunder shall not be delivered
to the Buyer within said five (5) business day period, same shall be an immediate default under this Agreement and the other Transaction
Documents. The Incentive Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the
Company’s Common Stock. The Incentive Shares are and shall be deemed fully earned in connection with the corporate advisory
and investment banking services provided by the Buyer to the Company prior to the Effective Date.
(b) Adjustments.
It is the intention of the Company and Buyer that by a date that is twelve (12) months after the Valuation Date (the “Twelve
Month Valuation Date”) the Buyer shall have generated net proceeds from the sale of the Incentive Shares equal
to the Share Value. The Buyer shall have the right to sell the Incentive Shares in the Principal Trading Market or otherwise, at
any time in accordance with applicable securities laws. At any time the Buyer may elect after the Twelve Month Valuation Date (or
prior to such Twelve Month Valuation Date, if Buyer has sold all Incentive Shares prior to such Twelve Month Valuation Date), the
Buyer may deliver to the Company a reconciliation statement showing the net proceeds actually received by the Buyer from the sale
of the Incentive Shares (the “Sale Reconciliation”). If, as of the date of the delivery by Buyer of the
Sale Reconciliation, the Buyer has not realized net proceeds from the sale of such Incentive Shares equal to at least the Share
Value, as shown on the Sale Reconciliation, then the Company shall immediately take all required action necessary or required in
order to cause the issuance of additional shares of Common Stock to the Buyer in an amount sufficient such that, when sold and
the net proceeds thereof are added to the net proceeds from the sale of any of the previously issued and sold Incentive Shares,
the Buyer shall have received total net funds equal to the Share Value. If additional shares of Common Stock are issued pursuant
to the immediately preceding sentence, and after the sale of such additional issued shares of Common Stock, the Buyer still has
not received net proceeds equal to at least the Share Value, then the Company shall again be required to immediately take all required
action necessary or required in order to cause the issuance of additional shares of Common Stock to the Buyer as contemplated above,
and such additional issuances shall continue until the Buyer has received net proceeds from the sale of such Common Stock equal
to the Share Value. In the event the Buyer receives net proceeds from the sale of Incentive Shares equal to the Share Value, and
the Buyer still has Incentive Shares remaining to be sold, the Buyer shall return all such remaining Incentive Shares to the Company.
In the event additional Common Stock is required to be issued as outlined above, the Company shall instruct its transfer agent
to issue certificates representing such additional shares of Common Stock to the Buyer immediately subsequent to the Buyer’s notification
to the Company that additional shares of Common Stock are issuable hereunder, and the Company shall in any event cause its transfer
agent to deliver such certificates to Buyer within five (5) business days following the date Buyer notifies the Company that additional
shares of Common Stock are to be issued hereunder. In the event such certificates representing such additional shares of Common
Stock issuable hereunder shall not be delivered to the Buyer within said five (5) business day period, same shall be an immediate
default under this Agreement and the Transaction Documents. Notwithstanding anything contained in this Section 7.5 to the contrary,
at any time on or prior to the Twelve Month Valuation Date, but not thereafter (unless agreed to by the Buyer), the Company shall
have the right, at any time during such period, to redeem any Incentive Shares then in the Buyer’s possession for an amount payable
by the Company to Buyer in cleared U.S. funds equal to the Share Value, less any net cash proceeds received by the Buyer from any
previous sales of Incentive Shares. Upon Buyer’s receipt of such cash payment in accordance with the immediately preceding sentence,
the Buyer shall return any then remaining Incentive Shares in its possession back to the Company.
7.6 Share
Reserve. The Company shall take all action reasonably necessary to at all times have authorized, and reserved for the purpose
of issuance, such number of shares of Common Stock as shall be necessary to effect the issuance of the Conversion Shares and Incentive
Shares under this Agreement or any other Transaction Documents (collectively, the “Share Reserve”). The
Company represents that it has sufficient authorized and unissued shares of Common Stock available to create the Share Reserve
after considering all other commitments that may require the issuance of Common Stock. The Company shall take all action reasonably
necessary to at all times have authorized, and reserved for the purpose of issuance, such number of shares of Common Stock as shall
be necessary to effect the full conversion of the Note and issuance of all Incentive Shares that may be issuable hereunder. If
at any time the Share Reserve is insufficient to effect the full conversion of the Note and issuance of all Incentive Shares that
may be issuable hereunder, the Company shall take all required measures to implement an increase of the Share Reserve accordingly.
If the Company does not have sufficient authorized and unissued shares of Common Stock available to increase the Share Reserve,
the Company shall call and hold a special meeting of the shareholders within twenty (20) business days of such occurrence, for
the sole purpose of increasing the number of shares authorized. The Company’s management shall recommend to the shareholders to
vote in favor of increasing the number of shares of Common Stock authorized.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE COMPANY’S
OBLIGATIONS TO SELL
The obligation of
the Company hereunder to issue and sell the Securities to the Buyer at the Closings is subject to the satisfaction, at or before
the respective Closing Dates, of each of the following conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion:
8.1 Buyer
shall have executed the Transaction Documents and delivered them to the Company.
8.2 The
representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as
of the Closing Dates as though made at that time (except for representations and warranties that speak as of a specific date),
and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Dates.
ARTICLE IX
CONDITIONS PRECEDENT TO THE BUYER’S OBLIGATIONS
TO PURCHASE
The obligation of
the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions (in addition to any other conditions precedent elsewhere in this Agreement), provided that these conditions
are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:
9.1 The Company
shall have executed and delivered the Transaction Documents and delivered the same to the Buyer.
9.2 The
representations and warranties of the Company shall be true and correct in all material respects (except to the extent that any
of such representations and warranties are already qualified as to materiality in Article VI above, in which case, such representations
and warranties shall be true and correct in all respects without further qualification) as of the date when made and as of the
Closing Date as though made at that time (except for representations and warranties that speak as of a specific date) and the Company
shall have performed, satisfied and complied in all material respects with the 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.
9.3 The
Buyer shall have received an opinion of counsel from counsel to the Company in a form satisfactory to the Buyer and its counsel.
9.4 The
Buyer shall have issued an irrevocable issuance instruction letter and board resolution, authorizing the issuance of the Incentive
Shares and directing its transfer agent to issue and deliver the Incentive Shares to Buyer or its designee.
9.5 The
Company shall have executed and delivered to Buyer a closing certificate in substance and form required by Buyer, which closing
certificate shall include and attach as exhibits: (i) a true copy of a certificate of good standing evidencing the formation and
good standing of the Company from the secretary of state (or comparable office) from the jurisdiction in which the Company is incorporated,
as of a date within ten (10) days of the Closing Date; (ii) the Company’s Certificate of Incorporation; (iii) the Company’s Bylaws;
and (iv) copies of the resolutions of the board of directors of the Company consistent with Section 6.3, as adopted by the Company’s
board of directors in a form reasonably acceptable to Buyer.
9.6 No
event shall have occurred which could reasonably be expected to have a Material Adverse Effect.
9.7 The
Company shall have executed such other agreements, certificates, confirmations or resolutions as the Buyer may required to consummate
the transactions contemplated by this Agreement and the Transaction Documents, including a closing statement and joint disbursement
instructions as may be required by Buyer.
ARTICLE X
INDEMNIFICATION
10.1 Company’s
Obligation to Indemnify. In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the
Securities hereunder, and in addition to all of the Company’s other obligations under this Agreement, the Company and
its subsidiaries, jointly and severally, hereby agree to defend and indemnify Buyer and its Affiliates and subsidiaries and
their respective directors, officers, employees, agents and representatives, and the successors and assigns of each of them
(collectively, the “Buyer Indemnified Parties”) and Company and its subsidiaries do hereby
agree to hold the Buyer Indemnified Parties forever harmless, from and against any and all Claims made, brought or asserted
against the Buyer Indemnified Parties, or any one of them, and Company and its subsidiaries hereby agree to pay or reimburse
the Buyer Indemnified Parties for any and all Claims payable by any of the Buyer Indemnified Parties to any Person, including
reasonable attorneys’ and paralegals’ fees and expenses, court costs, settlement amounts, costs of investigation
and interest thereon from the time such amounts are due at the highest non-usurious rate of interest permitted by applicable
Law, through all negotiations, mediations, arbitrations, trial and appellate levels, as a result of, or arising out of, or
relating to: (i) any misrepresentation or breach of any representation or warranty made by the Company or any of its
subsidiaries in this Agreement, the Transaction Documents or any other certificate, instrument or document contemplated
hereby or thereby; (ii) any breach of any covenant, agreement or Obligation of the Company or its subsidiaries contained in
this Agreement, the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby; or
(iii) any Claims brought or made against the Buyer Indemnified Parties, or any one of them, by a third party and arising out
of or resulting from the execution, delivery, performance or enforcement of this Agreement, the Transaction Documents or any
other instrument, document or agreement executed pursuant hereto or thereto, any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of the issuance of the Note, or the status of the Buyer or
holder of any of the Securities, as a buyer of such Securities in the Company. To the extent that the foregoing undertaking
by the Company and its subsidiaries may be unenforceable for any reason, the Company and its subsidiaries shall make the
maximum contribution to the payment and satisfaction of each of the Claims covered hereby, which is permissible under
applicable Law.
ARTICLE XI
MISCELLANEOUS
11.1 Notices.
All notices of request, demand and other communications hereunder shall be addressed to the parties as follows:
If to the Company: |
Millennium Healthcare, Inc. |
|
000 Xxxxxx Xxxx Xxxxx |
|
Xxxxxx Xxxx XX 00000 |
|
Suite 440 |
|
Attn: Xx. Xxxxxxxx Xxxxxxxx, CEO. |
|
Telephone: 000 000-0000 |
|
Facsimile: 516 628-5400 |
|
E-Mail: xxxxxxxx@xxxxxxxxxxxxx.xxx |
|
|
With a copy to: |
Xxxx Xxxxxxxx, Esq. |
(which shall not constitute notice) |
Lucosky Xxxxxxxx, LLP |
|
00 Xxxx Xxxxxx Xxxxx, 0xx” Xxxxx |
|
Xxxxxx, Xxx Xxxxxx 00000 |
|
Phone: (000) 000-0000 |
|
Fax: (000) 000-0000 |
|
Email: xxxxxxxxx@xxxxxx.xxx |
|
|
If to the Buyer: |
TCA Global Credit Master Fund, LP |
|
0000 Xxxxxx Xxxxxx |
|
Xxxxxxxxx, XX 00000 |
|
Attn: Mr. Xxxxxx Press |
|
Telephone: (000) 000-0000 |
|
Facsimile: (000) 000-0000 |
|
E-Mail: xxxxxx@xxxxxxx.xxx |
|
|
With a copy to: |
Xxxxx Xxxxx, P.A. |
|
0000 Xxxxxxxx Xxx., Xxxxx 0000 |
|
Xxxx Xxxxx, XX 00000 |
|
Attn: Xxxxx Xxxxx, Esq. |
|
Telephone: (000) 000-0000 |
|
Facsimile: (000) 000-0000 |
|
E-Mail: xxxxx@xxxxxxx.xxx |
unless the address
is changed by the party by like notice given to the other parties. Notice shall be in writing and shall be deemed delivered: (i)
if mailed by certified mail, return receipt requested, postage prepaid and properly addressed to the address below, then three
(3) business days after deposit of same in a regularly maintained U.S. Mail receptacle; or (ii) if mailed by Federal Express, UPS
or other nationally recognized overnight courier service, next business morning delivery, then one (1) business day after deposit
of same in a regularly maintained receptacle of such overnight courier; or (iii) if hand delivered, then upon hand delivery thereof
to the address indicated on or prior to 5:00 p.m., EST, on a business day. Any notice hand delivered after 5:00 p.m., EST, shall
be deemed delivered on the following business day. Notwithstanding the foregoing, notice, consents, waivers or other communications
referred to in this Agreement may be sent by facsimile, e-mail, or other method of delivery, but shall be deemed to have been delivered
only when the sending party has confirmed (by reply e-mail or some other form of written confirmation from the receiving party)
that the notice has been received by the other party.
11.2 Entire
Agreement. This Agreement, including the Exhibits and Schedules attached hereto and the documents delivered pursuant hereto,
including the Transaction Documents, set forth all the promises, covenants, agreements, conditions and understandings between
the parties hereto with respect to the subject matter hereof and thereof, and supersede all prior and contemporaneous agreements,
understandings, inducements or conditions, expressed or implied, oral or written, except as contained herein and in the Transaction
Documents.
11.3 Assignment.
The Buyer may at any time assign its rights in this Agreement or any of the other Transaction Documents, or any part thereof, without
the Company’s consent or approval. In addition, the Buyer may at any time sell one or more participations in the Note. The Company
may not sell or assign this Agreement or any of the Transaction Documents, or any portion thereof, either voluntarily or by operation
of law, nor delegate any of its duties of obligations hereunder or thereunder, without the prior written consent of the Buyer,
which consent may be withheld in Buyer’s sole and absolute discretion.
11.4 Binding
Effect. This Agreement shall be binding upon the parties hereto, their respective successors and permitted assigns.
11.5 Amendment.
The parties hereby irrevocably agree that no attempted amendment, modification, or change of this Agreement shall be valid and
effective, unless the parties shall unanimously agree in writing to such amendment, modification or change.
11.6 No
Waiver. No waiver of any provision of this Agreement shall be effective, unless it is in writing and signed by the party against
whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall
not be deemed to be a continuing or future waiver.
11.7 Gender
and Use of Singular and Plural. All pronouns shall be deemed to refer to the masculine, feminine, neuter, singular or
plural, as the identity of the party or parties or their personal representatives, successors and assigns may require.
11.8 Counterparts.
This Agreement and any amendments hereto may be executed in one or more counterparts, each of which shall be deemed an original
and all of which together will constitute one and the same instrument.
11.9 Electronic
Signatures. The Buyer is hereby authorized to rely upon and accept as an original for all purposes, this Agreement, any other
Transaction Document or other communication which is sent to Buyer or its counsel by facsimile, telegraphic, .pdf, or other electronic
transmission (each, a “Communication”) which Buyer or its counsel in good faith believes has
been signed by the Company and has been delivered to Buyer or its counsel by a properly authorized representative of the Company,
whether or not that is in fact the case. Notwithstanding the foregoing, the Buyer shall not be obligated to accept any such Communication
as an original and may in any instance require that an original document be submitted to Buyer in lieu of, or in addition to,
any such Communication.
11.10 Headings.
The article and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of the Agreement.
11.11 Governing
Law. This Agreement shall be construed in accordance with the laws of the State of Nevada, without regard to the principles
of conflicts of laws. The parties further agree that any action between them shall be heard in Xxxxx County, Nevada and expressly
consent to the jurisdiction and venue of the State Courts sitting in Xxxxx County, Nevada and the United States District Court
for the District of Nevada for the adjudication of any civil action asserted pursuant to this Agreement; provided, however, nothing
contained herein shall limit the Buyer’s ability to bring suit or enforce this Agreement or any other Transaction Documents in
any other jurisdiction.
11.12 Further
Assurances. The parties hereto will execute and deliver such further instruments and do such further acts and things as may
be reasonably required to carry out the intent and purposes of this Agreement.
11.13 Survival.
All covenants, agreements, representations and warranties made by the Company herein shall, notwithstanding any investigation by
the Buyer, be deemed material and relied upon by Buyer and shall survive the making and execution of this Agreement and the Transaction
Documents and the issuance of the Note, and shall be deemed to be continuing representations and warranties until such time as
the Company has fulfilled all of its Obligations to Buyer, the Note has been indefeasibly repaid in full and Buyer no longer owns
any of the Incentive Shares.
11.14 Time
is of the Essence. The parties hereby agree that time is of the essence with respect to performance of each of the parties’
Obligations under this Agreement. The parties agree that in the event that any date on which performance is to occur falls on a
Saturday, Sunday or state or national holiday, then the time for such performance shall be extended until the next business day
thereafter occurring.
11.15 Joint
Preparation. The preparation of this Agreement has been a joint effort of the parties and the resulting documents shall not,
solely as a matter of judicial construction, be construed more severely against one of the parties than the other.
11.16 Severability.
If any one of the provisions contained in this Agreement, for any reason, shall be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, and this Agreement
shall remain in full force and effect and be construed as if the invalid, illegal or unenforceable provision had never been contained
herein.
11.17 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.
11.18 WAIVER
OF JURY TRIAL. THE BUYER AND THE COMPANY, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES, IRREVOCABLY, THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING BASED HEREON,
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR ANY OTHER AGREEMENT EXECUTED
OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH THE
BUYER AND THE COMPANY ARE ADVERSE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BUYER TO PURCHASE THE DEBENTURES.
11.19 Compliance
with Federal Law. The Company shall: (i) ensure that no Person who owns a controlling interest in or otherwise controls the
Company is or shall at any time be listed on the Specially Designated Nationals and Blocked Person List or other similar lists
maintained by the Office of Foreign Assets Control (“OFAC”), the Department of the Treasury,
included in any Executive Orders or in any other similar lists of any Governmental Authority; (ii) not use or permit the use of
the proceeds of the purchase of the Note to violate any of the foreign asset control regulations of OFAC or any enabling statute,
Executive Order relating thereto or any other requirements or restrictions imposed by any Governmental Authority; and (iii) comply
with all applicable Lender Secrecy Act (“BSA”) laws and regulations, as amended. As required by federal
law and Buyer’s policies and practices, Buyer may need to obtain, verify and record certain customer identification information
and documentation in connection with opening or maintaining accounts or establishing or continuing to provide services.
[SIGNATURES ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed as of the date and year set forth above.
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COMPANY: |
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MILLENNIUM
HEALTHCARE, INC., a Delaware
corporation |
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By: |
/s/ Xxxxxxxx Xxxxxxxx |
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Name: |
Xxxxxxxx Xxxxxxxx |
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Title: |
CEO |
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Date: |
9/20/12 |
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BUYER: |
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TCA GLOBAL CREDIT MASTER FUND, LP |
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By: |
TCA Global Credit Fund GP, Ltd. |
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Its: |
General Partner |
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By: |
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Xxxxxx Press, Director |
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Date: |
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[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
Each of the Subsidiaries listed below is hereby executing this Agreement for the purpose of agreeing to
all of the terms, covenants, provisions, conditions, representations and warranties deemed made and agreed to by each of such Subsidiaries
under and pursuant to this Agreement.
MILLENNIUM PROCOMM SOLUTIONS, INC. |
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MILLENNIUM CODING & BILLING, INC. |
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By: |
/s/ Xxxxxxxx Xxxxxxxx |
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By: |
/s/ Xxxxxxxx Xxxxxxxx |
Name: |
Xxxxxxxx Xxxxxxxx |
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Name: |
Xxxxxxxx Xxxxxxxx |
Title: |
CEO |
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Title: |
CEO |
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Date: |
9/20/12 |
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Date: |
9/20/12 |
MILLENNIUM
MEDICAL DEVICES, LLC |
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MILLENNIUM VASCULAR
MANAGEMENT GROUP, INC. |
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By: |
/s/ Xxxxxxxx Xxxxxxxx |
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By: |
/s/ Xxxxxxxx Xxxxxxxx |
Name: |
Xxxxxxxx Xxxxxxxx |
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Name: |
Xxxxxxxx Xxxxxxxx |
Title: |
CEO |
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Title: |
CEO |
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Date: |
9/20/12 |
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Date: |
9/20/12 |
MILLENNIUM VASCULAR MANAGEMENT
GROUP OF STATEN ISLAND, LLC |
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By: |
/s/ Xxxxxxxx Xxxxxxxx |
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Name: |
Xxxxxxxx Xxxxxxxx |
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Title: |
CEO |
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Date: |
9/20/12 |
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EXHIBIT “A”
FORM OF NOTE
EXHIBIT “B”
FORM OF COMPLIANCE CERTIFICATE
DISCLOSURE SCHEDULES FOR COMPANY AND
ITS SUBSIDIARIES