Exhibit 10.9

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of August 8,
2017, is by and between Avant Diagnostics, Inc., a Nevada corporation with
offices located at 217 Perry Parkway Suite 8, Gaitherburg, MD 20977 (the
“Company”), and Xpress Group International Limited, a Hong Kong Limited company
located at Unit B, 17th Floor, Greatmany Centre, 109-111 Queen’s Road East, Wan
Chai, Hong Kong (the “Buyer”).

 

RECITALS

 

A. The Company and the Buyer are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule
506(b) of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the 1933 Act.

 

B. The Company has authorized a new series of senior secured convertible notes
of the Company substantially in the form attached hereto as Exhibit A (the
“Notes”), which Notes shall be convertible into shares of Common Stock (as
defined below) of the Company (such shares issuable pursuant to the terms of the
Notes upon conversion or otherwise, collectively, the “Note Conversion Shares”),
in accordance with the terms of the Notes.

 

C.  Pursuant to the purchase of the Notes, the Company will issue to the Buyer:
(i) certain warrants substantially in the form attached hereto as Exhibit B (the
“Warrants”), which Warrants shall be exercisable into shares of Common Stock (as
defined below) of the Company (such shares issuable pursuant to the terms of the
Notes upon conversion or otherwise, collectively, the “Warrant Conversion
Shares”), in accordance with the terms of the Warrants; and (ii) certain
Purchase Rights substantially in the form attached hereto as Exhibit C (the
“Purchase Rights”), which Purchase Rights shall be exercisable into shares of
Common Stock (as defined herein) of the Company (such shares issuable pursuant
to the terms of the Purchase Rights upon conversion or otherwise, collectively,
the “Purchase Rights Conversion Shares”), in accordance with the terms of the
Purchase Rights .

 

D. The Buyer wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this Agreement, Notes in the aggregate amount of
$75,000.00.

 

E. The Notes, the Note Conversion Shares, the Purchase Rights and the Warrant
Conversion Shares are collectively referred to herein as the “Securities.”

 

F. The Notes will rank senior to all outstanding and future indebtedness of the
Company, and its Subsidiaries (as defined below) and the Notes will be secured
by a first priority perfected security interest in the Company’s intellectual
property and a second perfected security in the Company’s equipment (the
“Collateral”). This security and the Collateral will be evidenced by a Pledge
Agreement in the form attached as Exhibit D.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Buyer hereby
agree as follows:

 

1. PURCHASE AND SALE OF NOTES.

 

(a) Purchase of Notes. Subject to the satisfaction (or waiver) of the conditions
set forth in Sections 6 and 7 below, the Company shall issue and sell to the
Buyer, and the Buyer agrees to purchase from the Company a Note in the original
principal amount of $75,000.00.

   

(b) Form of Payment. The Buyer shall pay $75,000 to the Company for the Note to
be issued and sold to the Buyer, by wire transfer of immediately available
funds. and the Company shall deliver to the Buyer a Note in the principal amount
of $75,000.  

 

 

 

 

(c) Bonus Equity. Upon delivery of the purchase price for the Notes at the , the
Company shall issue to the Buyer one share of the Company’s common stock for
every $0.50 of purchased Note.

 

(d) Board Representation. The Holder shall be entitled to appoint two (2)
members of the Board of Directors upon the execution of the Notes. While the
Note is due and payable, should any of the Holder’s appointees resign, be
removed, or otherwise cause a vacancy, the Holder will be able to re-appoint
another person to serve on the Company’s Board of Directors to fill that
vacancy.

 

(e) No Variable Rate Transactions. While the Note is due and payable, the
Company shall not enter into any variable rate transactions. “Variable Rate
Transaction” means a transaction in which the Company (i) issues or sells any
debt or equity securities that are convertible into, exchangeable or exercisable
for, or include the right to receive, additional shares of Common Stock either
(A) at a conversion price, exercise price or exchange rate or other price that
is based upon, and/or varies with, the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of such debt or
equity securities or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such
debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock or (ii) enters into any agreement, including, but not limited
to, an equity line of credit, whereby the Company may sell securities at a
future determined price. The Warrant and Purchase Right shall be exempt from
this provision.

 

(f) Optional Redemption. Following the six (6) month anniversary of the Closing
Date, the Holder shall have the option to call on the Company for the redemption
of the Note from the Holder, provided that the Company has raised sufficient
funds to repay this Note. In the event of such optional redemption, the Holder
shall be paid in the full principal amount and all other accrued and unpaid
interest to the date of redemption.

 

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(g) Piggyback Registration Rights. The Company shall include on the next
registration statement the Company files with SEC (or on the subsequent
registration statement if such registration statement is withdrawn) all shares
issuable upon conversion of the Note and all shares issuable upon exercise of
the Warrant and Purchase Rights, and the bonus equity shares granted (the
“Registrable Securities”). Failure to do so will result in liquidated damages of
25% of the outstanding principal balance of the Note, but not less than
$100,000, being immediately due and payable to the Purchaser at its election in
the form of cash payment provided however if the reason for such
non-registration of all or any portion of the Registrable Securities is the
result of either (i) in the case of an underwritten offering, the managing
underwriter as set forth below or (ii) SEC Guidance (as defined below) under
Rule 415 or similar rule which limits the number of Registrable Securities which
may be included in a registration statement with respect to Buyer, no liquidated
damages will be due and payable in to Buyer as set forth above. Subject to the
terms of this Agreement, the Company shall use its commercially reasonable
efforts to keep such registration statement continuously effective under the
1933 Act until the first to occur of: (A) the date that is one (1) year from the
date the registration statement is declared effective by the SEC (the “Cut-Off
Date”) and (B) the date that all Registrable Securities covered by such
registration statement (i) have been sold, thereunder or pursuant to Rule 144,
or (ii) may be sold without volume or manner-of-sale restrictions pursuant to
Rule 144 and without the requirement for the Company to be in compliance with
the current public information requirement under Rule 144 (the “Effectiveness
Period”). Notwithstanding the registration obligations set forth in this
Section, if the SEC informs the Company that all of the Registrable Securities
cannot, as a result of the application of Rule 415, be registered for resale on
a single registration statement, the Company agrees to promptly inform Buyer and
use its commercially reasonable efforts to file amendments to any registration
statement as required by the SEC, covering the maximum number of Registrable
Securities permitted to be registered by the SEC, on Form S-1 or such other form
available to register for resale the Registrable Securities as a secondary
offering; provided, however, that prior to filing such amendment, the Company
shall be obligated to use diligent efforts to advocate with the SEC for the
registration of all of the Registrable Securities in accordance with any (i) any
publicly-available written or oral guidance of the SEC staff, or any comments,
requirements or requests of the SEC staff and (ii) the Securities Act
(collectively, “SEC Guidance”), including without limitation, Compliance and
Disclosure Interpretation 612.09. Notwithstanding any other provision of this
Agreement and subject to the payment of liquidated damages set forth above, if
the SEC or any SEC Guidance sets forth a limitation on the number of Registrable
Securities permitted to be registered on a particular registration statement
(and notwithstanding that the Company used diligent efforts to advocate with the
Commission for the registration of all or a greater portion of Registrable
Securities), unless otherwise directed in writing by a Holder as to its
Registrable Securities, the number of Registrable Securities to be registered on
such Registration Statement will be reduced as follows: (i) First, the Company
shall reduce or eliminate any securities to be included by any person other than
Buyer; (ii) Second, subject to written approval by Buyer, the Company shall
reduce the Registrable Securities. In the event of a cutback hereunder, the
Company shall give the Buyer at least five (5) Business Days prior written
notice. In the event the Company amends the any registration statement in
accordance with the foregoing, the Company will use its commercially reasonable
efforts to file with the SEC, as promptly as allowed by the SEC or SEC Guidance
provided to the Company or to registrants of securities in general, one or more
registration statements on Form S-1 or such other form available to register for
resale those Registrable Securities that were not registered on any prior
registration statement filed with the SEC. In addition, if any rights granted
pursuant to this Section involves the inclusion of securities in connection with
an underwritten offering, and the managing underwriter (or, in the case of an
offering that is not underwritten, an investment banker) shall advise the
Company that, in its opinion, the number of securities requested and otherwise
proposed to be included on such registration statement exceeds the number which
can be sold in such offering without adversely affecting the marketability of
the offering, the Company will include in such Registration to the extent of the
number which the Company is so advised can be sold in such offering, first, the
securities the Company proposes to sell for its own account on such registration
statement and second, the Registrable Securities of the Buyer requesting to be
included on such registration statement.

 

(h) Pledge Agreement. The Company shall grant a security interest in all of its
assets (“Collateral”) to Holder to secure Company’s repayment of the Note. The
Collateral and the security interest shall be memorialized in the Pledge
Agreement and shall be in such form as attached hereto as Exhibit D.

 

(i) Future Financing. While the Note is due and payable, any future financing by
Company, whether in debt or equity, shall require prior written consent of
Buyer.

 

2. ISSUANCE OF THE WARRANTS AND PURCHASE RIGHTS.

 

(a) Issuance of the Warrants. Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the Company shall issue to the
Buyer, at any closing Warrants to purchase common shares of the Company at $0.06
(six cents) per share. The amount of the warrants shall equal 200% (two hundred
percent) of the principal of the issued Note and warrants shall be exercisable
for a period of five (5) years from the respective closing date and shall be in
such form as attached hereto as Exhibit B.    

 

(b)  Issuance of the Purchase Rights. Subject to the satisfaction (or waiver) of
the conditions set forth in Sections 6 and 7 below, the Company shall issue, at
any closing, to the Buyer Purchase Rights to purchase common shares of the
Company at $0.06 (six cents) per share. The amount of the Purchase Rights shall
equal 800% (eight hundred percent) of the principal of the issued Note and the
Purchase Rights shall be exercisable for a period of five (5) years from the
respective closing date and shall be in such form as attached hereto as Exhibit
C. The shares issued in connection with Purchase Rights cannot be sold into the
market for a period of eighteen (18) months from the respective closing date.

  

3. BUYER’S REPRESENTATIONS AND WARRANTIES.

 

The Buyer represents and warrants to the Company with respect to only itself
that, as of the date hereof and as of the Closing Date:

 

(a) Organization; Authority. The Buyer is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents (as
defined below) to which it is a party and otherwise to carry out its obligations
hereunder and thereunder.

 

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(b) No Public Sale or Distribution. The Buyer (i) is acquiring its Note, Warrant
and Purchase Rights and (ii) upon conversion and/or exercise of its Note,
Warrant and/or Purchase Rights will acquire the Note Conversion Shares, the
Warrant Conversion Shares and/or the Purchase Rights Conversion Shares, issuable
upon conversion and/or exercise thereof, respectively, in each case, for its own
account and not with a view towards, or for resale in connection with, the
public sale or distribution thereof in violation of applicable securities laws,
except pursuant to sales registered or exempted under the 1933 Act; provided,
however, by making the representations herein, the Buyer does not agree, or make
any representation or warranty, to hold any of the Securities for any minimum or
other specific term and reserves the right to dispose of the Securities at any
time in accordance with or pursuant to a registration statement or an exemption
from registration under the 1933 Act. The Buyer does not presently have any
agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities in violation of applicable securities laws. For
purposes of this Agreement, “Person” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity and any Governmental Entity or any
department or agency thereof

  

(c) Accredited Investor Status. At the time the Buyer was offered the
Securities, it was, and as of the date hereof it is, and as of the date of each
applicable closing and on each date on which it converts the Notes or exercises
any Warrants or Purchase Rights, it will be an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D promulgated under the 1933 Act.

 

(d) Reliance on Exemptions. The 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 the Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of the Buyer to acquire the
Securities.

 

(e) Information. The Buyer and its advisors, if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities that have been
requested by the Buyer. The Buyer and its advisors, if any, have been afforded
the opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigations conducted by the Buyer or its advisors, if
any, or its representatives shall modify, amend or affect the Buyer’s right to
rely on the Company’s representations and warranties contained herein. The Buyer
understands that its investment in the Securities involves a high degree of
risk. The 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.

 

(f) No Governmental Review. The Buyer understands that no United States federal
or state agency or any other government or governmental agency 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 authorities passed
upon or endorsed the merits of the offering of the Securities.

 

(g) Transfer or Resale. The Buyer understands that: (i) the Securities have not
been and are not being registered under the 1933 Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) the Buyer shall have delivered to the
Company (if requested by the Company) an opinion of counsel, in a form
reasonably acceptable to the Company, to the effect that such Securities to be
sold, assigned or transferred may be sold, assigned or transferred pursuant to
an exemption from such registration, or (C) the Buyer provides the Company with
reasonable assurance that such Securities can be sold, assigned or transferred
pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor
rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made
in reliance on Rule 144 may be made only in accordance with the terms of Rule
144, and further, if Rule 144 is not applicable, any resale of the Securities
under circumstances in which the seller (or the Person through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the 1933
Act) may require compliance with some other exemption under the 1933 Act or the
rules and regulations of the SEC promulgated thereunder; and (iii) except as
otherwise set forth herein, neither the Company nor any other Person is under
any obligation to register the Securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder. Notwithstanding the foregoing, the Securities may be pledged in
connection with a bona fide margin account or other loan or financing
arrangement secured by the Securities and such pledge of Securities shall not be
deemed to be a transfer, sale or assignment of the Securities hereunder, and if
the Buyer effects a pledge of Securities, the Buyer will not be required to
provide the Company with any notice thereof or otherwise make any delivery to
the Company pursuant to this Agreement or any other Transaction Document (as
defined in Section 3(b)), including, without limitation, this Section 2(g).

 

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(h) Validity; Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Buyer and shall constitute the legal,
valid and binding obligations of the Buyer enforceable against the Buyer in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

 

(i) No Conflicts. The execution, delivery and performance by the Buyer of this
Agreement and the consummation by the Buyer of the transactions contemplated
hereby and thereby will not (i) result in a violation of the organizational
documents of the Buyer, or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Buyer is a
party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to
the Buyer, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which could not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of the Buyer to perform its obligations hereunder.

 

(j) Experience of the Buyer. The Buyer, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment. The Buyer is able to bear the economic risk of an
investment in the Securities and, at the present time, is able to afford a
complete loss of such investment.

 

(k) General Solicitation. Such Buyer is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

 

4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to the Buyer that, as of the date hereof and
as of the Closing Date:

 

(a) Organization and Qualification. The Company is duly organized and validly
existing and in good standing under the laws of the jurisdiction in which it is
formed, and has the requisite power and authority to carry on its business as
now being conducted and as presently proposed to be conducted. The Company is
duly qualified as a foreign entity to do business and is in good standing in
every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not
reasonably be expected to have a Material Adverse Effect (as defined below). As
used in this Agreement, “Material Adverse Effect” means any material adverse
effect on (i) the business, properties, assets, liabilities, operations
(including results thereof), condition (financial or otherwise) or prospects of
the Company or any Subsidiary, individually or taken as a whole, (ii) the
transactions contemplated hereby or in any of the other Transaction Documents or
any other agreements or instruments to be entered into in connection herewith or
therewith or (iii) the authority or ability of the Company or any of its
Subsidiaries to perform any of their respective obligations under any of the
Transaction Documents (as defined below). “Subsidiaries” means any Person in
which the Company, directly or indirectly, controls or operates all or any part
of the business, operations or administration of such Person, and each of the
foregoing, is individually referred to herein as a “Subsidiary.”

 

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(b) Authorization; Enforcement; Validity. The Company has the requisite power
and authority to enter into and perform its obligations under this Agreement and
the other Transaction Documents and to issue the Securities in accordance with
the terms hereof and thereof. The execution and delivery of this Agreement and
the other Transaction Documents by the Company, and the consummation by the
Company of the transactions contemplated hereby and thereby have been duly
authorized by the Company’s board of directors or other governing body, as
applicable, and (other than the potential filing with the SEC of a Form D and
any other filings as may be required by any state securities agencies) no
further filing, consent or authorization is required by the Company, its
Subsidiaries, their respective boards of directors or their stockholders or
other governing body. This Agreement has been, and the other Transaction
Documents to which it is a party will be prior to the Closing, duly executed and
delivered by the Company, and each constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
its respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies and except as rights to
indemnification and to contribution may be limited by federal or state
securities law and public policy, and the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought. “Transaction Documents” means, collectively, this Agreement, the
Notes, the Warrants, the Purchase Rights, any Pledge documents creating a
security interest in the assets of the Company, and each of the other agreements
and instruments entered into or delivered by any of the parties hereto in
connection with the transactions contemplated hereby and thereby, as may be
amended from time to time.

 

(c) Issuance of Securities. The issuance of the Notes are duly authorized and
upon issuance in accordance with the terms of the Transaction Documents shall be
validly issued, fully paid and non-assessable and free from all preemptive or
similar rights, mortgages, defects, claims, liens, pledges, charges, taxes,
rights of first refusal, encumbrances, security interests and other encumbrances
(collectively “Liens”) with respect to the issuance thereof. Upon issuance or
conversion in accordance with the Notes, Warrants, or Purchase Rights, the Note
Conversion Shares, Warrant Conversion Shares, and/or Purchase Right Conversion
Shares, respectively, when issued and payment is made, if required, will be
validly issued, fully paid and non-assessable and free from all preemptive or
similar rights or Liens with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common Stock. Subject to
the accuracy of the representations and warranties of the Buyer in this
Agreement, the offer and issuance by the Company of the Securities is exempt
from registration under the 1933 Act. 

 

(d) No Conflicts. Except as otherwise set forth on Schedule 4(d), the execution,
delivery and performance of the Transaction Documents by the Company and its
Subsidiaries and the consummation by the Company of the transactions
contemplated hereby and thereby will not (i) result in a violation of the
Articles of Incorporation (as defined below) (including, without limitation, any
certificate of designation contained therein), By-Laws (as defined below),
certificate of formation, memorandum of association, articles of association,
bylaws or other organizational documents of the Company , or any capital stock
or other securities of the Company, (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
in any respect under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture or instrument
to which the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including,
without limitation, foreign, federal and state securities laws and regulations
and including all applicable foreign, federal and state laws, rules and
regulations) applicable to the Company or by which any property or asset of the
Company is bound or affected other than, in the case of clause (ii) above, such
conflicts, defaults or rights that could not reasonably be expected to have a
Material Adverse Effect.

 

(e) Consents. The Company is not required to obtain any consent from,
authorization or order of, or make any filing or registration with (other than
the potential filing with the SEC of any periodic report under the Company’s
reporting obligations or a Form D and any other filings as may be required by
any federal or state securities agencies or the filing of any registration
statement pursuant to which the Buyer shall have any registration rights as
contemplated by this Agreement), any Governmental Entity (as defined below) or
any regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its respective obligations under or
contemplated by the Transaction Documents, in each case, in accordance with the
terms hereof or thereof. All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been or will be obtained or effected on or prior to the date of
this Agreement, and the Company is not aware of any facts or circumstances which
might prevent the Company from obtaining or effecting any of the registration,
application or filings contemplated by the Transaction Documents. “Governmental
Entity” means any nation, state, county, city, town, village, district, or other
political jurisdiction of any nature, federal, state, local, municipal, foreign,
or other government, governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal), multi-national organization or body; or body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature or
instrumentality of any of the foregoing, including any entity or enterprise
owned or controlled by a government or a public international organization or
any of the foregoing.

 

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(f) No Integrated Offering. None of the Company, its Subsidiaries or any of
their affiliates, nor any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Securities under the 1933 Act, whether through integration with prior
offerings or otherwise, or cause this offering of the Securities to require
approval of stockholders of the Company for purposes of the 1933 Act or under
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation system on
which any of the securities of the Company are listed or designated for
quotation. None of the Company, its Subsidiaries, their affiliates nor any
Person acting on their behalf will take any action or steps that would require
registration of any of the Securities under the 1933 Act or cause the offering
of any of the Securities to be integrated with other offerings of securities of
the Company.

 

(g) No Undisclosed Events, Liabilities, Developments or Circumstances. Except as
otherwise set forth on Schedule 4(g), no event, liability, development or
circumstance has occurred or exists, or is reasonably expected to exist or occur
with respect to the Company, any of its Subsidiaries or any of their respective
businesses, properties, liabilities, prospects, operations (including results
thereof) or condition (financial or otherwise), that (i) would be required to be
disclosed by the Company under applicable securities laws on a registration
statement on Form S-1 filed with the SEC relating to an issuance and sale by the
Company of its Common Stock and which has not been publicly announced, (ii)
could have a material adverse effect on the Buyer’s investment hereunder or
(iii) could have a Material Adverse Effect.

 

(h) Conduct of Business; Regulatory Permits. Neither the Company nor any of its
Subsidiaries is in violation of any term of or in default under its Articles of
Incorporation, any certificate of designation, preferences or rights of any
other outstanding series of preferred stock of the Company or any of its
Subsidiaries or Bylaws or their organizational charter, certificate of
formation, memorandum of association, articles of association, Articles of
Incorporation or Articles of Incorporation or bylaws, respectively. Except as
otherwise set forth on Schedule 4(h), neither the Company nor any of its
Subsidiaries is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct
its business in violation of any of the foregoing, except in all cases for
possible violations which could not, individually or in the aggregate, have a
Material Adverse Effect.

 

(i) Transfer Taxes. On a closing date, all stock transfer or other taxes (other
than income or similar taxes) which are required to be paid in connection with
the issuance, sale and transfer of the Securities to be sold to the Buyer
hereunder will be, or will have been, fully paid or provided for by the Company,
and all laws imposing such taxes will be or will have been complied with. 

 

(j) Illegal or Unauthorized Payments; Political Contributions. Neither the
Company nor any of its Subsidiaries nor, to the best of the Company’s knowledge
(after reasonable inquiry of its officers and directors), any of the officers,
directors, employees, agents or other representatives of the Company or any of
its Subsidiaries or any other business entity or enterprise with which the
Company or any Subsidiary is or has been affiliated or associated, has, directly
or indirectly, made or authorized any payment, contribution or gift of money,
property, or services, whether or not in contravention of applicable law, (i) as
a kickback or bribe to any Person or (ii) to any political organization, or the
holder of or any aspirant to any elective or appointive public office except for
personal political contributions not involving the direct or indirect use of
funds of the Company or any of its Subsidiaries.

 

7

 

 

(k) Money Laundering. The Company and its Subsidiaries are in material
compliance with, and have not previously violated, the USA Patriot Act of 2001
and all other applicable U.S. and non-U.S. anti-money laundering laws and
regulations, including, without limitation, the laws, regulations and Executive
Orders and sanctions programs administered by the U.S. Office of Foreign Assets
Control, including, but not limited, to (i) Executive Order 13224 of September
23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079
(2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.

 

(l) No Disqualification Events. With respect to Securities to be offered and
sold hereunder in reliance on Rule 506(b) under the 1933 Act (“Regulation D
Securities”), none of the Company, any of its predecessors, any affiliated
issuer, any director, executive officer, other officer of the Company
participating in the offering contemplated hereby, any beneficial owner of 20%
or more of the Company’s outstanding voting equity securities, calculated on the
basis of voting power, nor any promoter (as that term is defined in Rule 405
under the 1933 Act) connected with the Company in any capacity at the time of
sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”)
is subject to any of the “Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification Event”), except
for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company
has exercised reasonable care to determine whether any Issuer Covered Person is
subject to a Disqualification Event. The Company has complied, to the extent
applicable, with its disclosure obligations under Rule 506(e), and has furnished
to the Buyers a copy of any disclosures provided thereunder.

 

(m) Other Covered Persons. The Company is not aware of any Person that has been
or will be paid (directly or indirectly) remuneration for solicitation of Buyer
or potential purchasers in connection with the sale of any Securities.

 

(n) Shell Company Status. The Company was an issuer identified in, or subject
to, Rule 144(i). 

 

5. COVENANTS.

 

(a) Reasonable Best Efforts. The Buyer shall use its reasonable best efforts to
timely satisfy each of the covenants hereunder and conditions to be satisfied by
it as provided in Section 6 of this Agreement. The Company shall use its
reasonable best efforts to timely satisfy each of the covenants hereunder and
conditions to be satisfied by it as provided in Section 7 of this Agreement.

 

(b) Regulatory Filings. The Company shall make all necessary filings with
respect to the Securities as required under securities laws. The Company shall,
on or before the date of this Agreement, take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to,
qualify the Securities for sale to the Buyer at the Closing pursuant to this
Agreement under applicable securities or “Blue Sky” laws of the states of the
United States (or to obtain an exemption from such qualification), and shall
provide evidence of any such action so taken to the Buyer on or prior to the
date of this Agreement. Without limiting any other obligation of the Company
under this Agreement, the Company shall timely make all filings and reports
relating to the offer and sale of the Securities required under all applicable
securities laws (including, without limitation, all applicable federal
securities laws and all applicable “Blue Sky” laws), and the Company shall
comply with all applicable foreign, federal, state and local laws, statutes,
rules, regulations and the like relating to the offering and sale of the
Securities to the Buyer.

 

(c) Reporting Status. Subsequent to the closings, the Company shall use its best
efforts to timely file all reports required to be filed with the SEC pursuant to
the 1934 Act.

 

(d) Use of Proceeds. The Company will use the proceeds from the sale of the
Securities for general corporate purposes.

  

(e) Fees. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, transfer agent fees, DTC (if applicable)
fees or broker’s commissions (other than for Persons engaged by the Buyer)
relating to or arising out of the transactions contemplated hereby. Except as
otherwise set forth in the Transaction Documents, each party to this Agreement
shall bear its own expenses in connection with the sale of the Securities to the
Buyer.

 

8

 

 

(f) Pledge of Securities. Notwithstanding anything to the contrary contained in
this Agreement, the Company acknowledges and agrees that the Securities may be
pledged by the Investor in connection with a bona fide margin agreement or other
loan or financing arrangement that is secured by the Securities. The pledge of
Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and the Investor effecting a pledge of Securities will not
be required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document.

 

 (g) Conduct of Business. The business of the Company and its Subsidiaries shall
not be conducted in violation of any law, ordinance or regulation of any
Governmental Entity, except where such violations would not reasonably be
expected to result, either individually or in the aggregate, in a Material
Adverse Effect. 

 

(h) Conversion and/or Exercise Procedures. The form of Conversion Notice (as
defined in the Notes) included in the Notes and the Exercise Notice (as defined
in the Warrants and Purchase Rights) included in each of the Warrants and
Purchase Rights, respectively, set forth the totality of the procedures required
of the Buyer in order to convert the Notes and/or exercise the Warrants and/or
Purchase Rights, respectively. The Company shall honor conversions of the Notes
and/or exercise of the Warrants and/or Purchase Rights, respectively, and shall
deliver the Note Conversion Shares, the Warrant Conversion Shares and/or the
Purchase Rights Conversion Shares, respectively, in accordance with the terms,
conditions and time periods set forth in the Notes, the Warrants and the
Purchase Rights, respectively.

 

(i) Regulation M. The Company will not take any action prohibited by Regulation
M under the 1934 Act, in connection with the distribution of the Securities
contemplated hereby.

 

(j) General Solicitation. None of the Company, any of its affiliates (as defined
in Rule 501(b) under the 1933 Act) or any person acting on behalf of the Company
or such affiliate will solicit any offer to buy or offer or sell the Securities
by means of any form of general solicitation or general advertising within the
meaning of Regulation D, including: (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar medium or
broadcast over television or radio; and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.

 

(k) No Short Sales. So long as any Securities remain outstanding, the Buyer (or
its successors or assigns) (the “Restricted Persons”) shall not, directly or
indirectly, engage in any “Short Sales” of the Common Stock (other than any sale
marked “short exempt” or any sale of shares deemed to be held “long” hereunder).
For purposes hereof, “Short Sales” shall mean “short sales” as defined in Rule
200 promulgated under Regulation SHO under the 1934 Act (other than any sale
marked “short exempt” or any sale of shares deemed to be held “long” hereunder).
Notwithstanding the foregoing, no “Short Sale” or “short” position shall be
deemed to exist, as a result of any failure by the Company (or its agents) to
deliver Note Conversion Shares upon conversion of the Notes, Warrant Conversion
Shares and/or Purchase Right Conversion Shares upon the exercise of the Warrants
and/or Purchase Rights, as applicable, or to timely remove any legend from any
such securities, to the Restricted Person converting such Notes, exercising such
Warrants and/or Purchase Rights or removing legends from any shares of Common
Stock issuable upon conversion and/or exercise, as applicable. For purposes of
determining whether the Restricted Person is deemed to have a “long” position in
the Common Stock, at any given time of determination, the Restricted Person
shall be deemed to hold “long” all Common Stock that is either (i) then owned by
the Restricted Person, if any, or (ii) issuable to the Restricted Person as Note
Conversion Shares, Warrant Conversion Shares, and/or Purchase Right Conversion
Shares, as applicable, pursuant to the terms of the Notes, Warrants and/or
Purchase Rights, respectively then held by the Restricted Person, if any,
pursuant to a valid Conversion Notice and/or Exercise Notice delivered to the
Company on or prior to the applicable time of determination. Notwithstanding the
foregoing, nothing contained herein shall (without implication that the contrary
would otherwise be true) prohibit any Restricted Person from selling “long” (as
defined under Rule 200 promulgated under Regulation SHO under the 1934 Act) the
Securities or any other Common Stock then owned by the Restricted Person. 

 

9

 

 

5. REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.

 

(a) Register. The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to the
holder of Securities), a register for the Notes, Warrants and Purchase Rights in
which the Company shall record the name and address of the Person in whose name
the Notes, Warrants and Purchase Rights have been issued (including the name and
address of each transferee), the principal amount of the Notes and the number of
shares represented by the Warrants and Purchase Rights, respectively, held by
the Person and the number of Note Conversion Shares issuable pursuant to the
terms of the Notes and number of Warrant Conversion Shares and Purchase Right
Conversion Shares issuable pursuant to the terms of the Warrants and/or the
Purchase Rights, as applicable, held by the Person. The Company shall keep the
register open and available at all times during business hours for inspection of
the Buyer or its legal representatives.      

 

(b) Legends. The Buyer understands that the Securities have been issued (or will
be issued in the case of the Note Conversion Shares, Warrant Conversion Shares,
or Purchase Right Conversion Shares) pursuant to an exemption from registration
or qualification under the 1933 Act and applicable state securities laws, and
except as set forth below, the Securities shall bear any legend as required by
the “blue sky” laws of any state and a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of such
stock certificates):

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN][THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER
(IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE
TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

(c) Removal of Legends. Certificates evidencing Securities shall not be required
to contain the legend set forth in Section 5(c) above or any other legend (i)
while a registration statement covering the resale of such Securities is
effective under the 1933 Act (a “Registration Statement”), (ii) following any
sale of such Securities pursuant to Rule 144 (assuming the transferor is not an
affiliate of the Company), (iii) if such Securities are eligible to be sold,
assigned or transferred under Rule 144 (provided that the Buyer provides the
Company with reasonable assurances that such Securities are eligible for sale,
assignment or transfer under Rule 144 which shall not include an opinion of the
Buyer’s counsel), (iv) in connection with a sale, assignment or other transfer
(other than under Rule 144), provided that the Buyer provides the Company with
an opinion of counsel to the Buyer, in a generally acceptable form, to the
effect that such sale, assignment or transfer of the Securities may be made
without registration under the applicable requirements of the 1933 Act or (v) if
such legend is not required under applicable requirements of the 1933 Act
(including, without limitation, controlling judicial interpretations and
pronouncements issued by the SEC). If a legend is not required pursuant to the
foregoing, the Company shall no later than three (3) Business Days (or such
earlier date as required pursuant to the 1934 Act or other applicable law, rule
or regulation for the settlement of a trade initiated on the date the Buyer
delivers such legended certificate representing such Securities to the Company)
following the delivery by the Buyer to the Company or the transfer agent (with
notice to the Company) of a legended certificate representing such Securities
(endorsed or with stock powers attached, signatures guaranteed, and otherwise in
form necessary to affect the reissuance and/or transfer, if applicable),
together with any other deliveries from the Buyer as may be required above in
this Section 5(d), as directed by the Buyer, either: (A) provided that the
Company’s transfer agent is participating in the DTC Fast Automated Securities
Transfer Program and such securities are DTC eligible and such Securities are
Note Conversion Shares, Warrant Conversion Shares, or Purchase Right Conversion
Shares, credit the aggregate number of shares of Common Stock to which the Buyer
shall be entitled to the Buyer’s or its designee’s balance account with DTC
through its Deposit/Withdrawal at Custodian system or (B) if the Company’s
transfer agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and deliver (via reputable overnight courier) to the
Buyer, a certificate representing such Securities that is free from all
restrictive and other legends, registered in the name of the Buyer or its
designee (the date by which such credit is so required to be made to the balance
account of the Buyer’s or the Buyer’s designee with DTC or such certificate is
required to be delivered to the Buyer pursuant to the foregoing is referred to
herein as the “Required Delivery Date”, and the date such shares of Common Stock
are actually delivered without restrictive legend to the Buyer or the Buyer’s
designee with DTC, as applicable, the “Share Delivery Date”). The Company shall
be responsible for any transfer agent fees or DTC fees with respect to any
issuance of Securities or the removal of any legends with respect to any
Securities in accordance herewith. 

 

10

 

 

(d) Failure to Timely Deliver; Buy-In. If the Company fails to, for any reason
or for no reason, to issue and deliver (or cause to be delivered) to the Buyer
(or its designee) by the Required Delivery Date, either (I) if the Transfer
Agent is not participating in the DTC Fast Automated Securities Transfer Program
or the Company’s securities are not DTC eligible, a certificate for the number
of Note Conversion Shares, Warrant Conversion Shares, or Purchase Right
Conversion Shares to which the Buyer is entitled and register such Note
Conversion Shares, Warrant Conversion Shares, or Purchase Right Conversion
Shares on the Company’s share register or, (II) if the Transfer Agent is
participating in the DTC Fast Automated Securities Transfer Program, to credit
the balance account of the Buyer or the Buyer’s designee with DTC for such
number of Note Conversion Shares, Warrant Shares, or Purchase Right Shares
submitted for legend removal by the Buyer pursuant to Section 5(d) above (the
event described in the immediately foregoing clause (I) above, a “Delivery
Failure”),then, in addition to all other remedies available to the Buyer, the
Company shall pay in cash to the Buyer on each day after the Share Delivery Date
and during such Delivery Failure an amount equal to 2% of the product of (A) the
sum of the number of shares of Common Stock not issued to the Buyer on or prior
to the Required Delivery Date and to which the Buyer is entitled, and (B) any
trading price of the Common Stock selected by the Buyer in writing as in effect
at any time during the period beginning on the date of the delivery by the Buyer
to the Company of the applicable Note Conversion Shares, Warrant Conversion
Shares, or Purchase Right Conversion Shares and ending on the applicable Share
Delivery Date. In addition to the foregoing, if on or prior to the Required
Delivery Date either (I) if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, the Company shall fail to issue and
deliver a certificate to the Buyer and register such shares of Common Stock on
the Company’s share register or, if the Transfer Agent is participating in the
DTC Fast Automated Securities Transfer Program, credit the balance account of
the Buyer or the Buyer’s designee with DTC for the number of shares of Common
Stock to which the Buyer submitted for legend removal by the Buyer pursuant to
Section 5(d) above (ii) below or (II) a Delivery Failure occurs, and if on or
after such Trading Day the Buyer purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Buyer of shares of Common Stock submitted for legend removal by the Buyer
pursuant to Section 5(d) above that the Buyer anticipated receiving from the
Company (a “Buy-In”), then the Company shall, within three (3) Business Days
after the Buyer’s request and in the Buyer’s discretion, either (i) pay cash to
the Buyer in an amount equal to the Buyer’s total purchase price (including
brokerage commissions and other out-of-pocket expenses, if any, for the shares
of Common Stock so purchased) (the “Buy-In Price”), at which point the Company’s
obligation to so deliver such certificate or credit the Buyer’s balance account
shall terminate and such shares shall be cancelled, or (ii) promptly honor its
obligation to so deliver to the Buyer a certificate or certificates or credit
the balance account of the Buyer or the Buyer’s designee with DTC representing
such number of shares of Common Stock that would have been so delivered if the
Company timely complied with its obligations hereunder and pay cash to the Buyer
in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Note Conversion Shares, Warrant Shares, or
Purchase Right Shares that the Company was required to deliver to the Buyer by
the Required Delivery Date multiplied by (B) the lowest Closing Sale Price (as
defined in the Notes) of the Common Stock on any Trading Day during the period
commencing on the date of the delivery by the Buyer to the Company of the
applicable Note Conversion Shares, Warrant Shares, or Purchase Right Shares and
ending on the date of such delivery and payment under this clause (ii). Nothing
shall limit the Buyer’s right to pursue any other remedies available to it
hereunder, at law or in equity, including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock (or
to electronically deliver such shares of Common Stock) as required pursuant to
the terms hereof. Notwithstanding anything herein to the contrary, with respect
to any given Delivery Failure, this Section 5(e) shall not apply to the Buyer to
the extent the Company has already paid such amounts in full to the Buyer with
respect to such Delivery Failure, as applicable, pursuant to the analogous
sections of the Note held by the Buyer.

 

11

 

  

6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

 

(a) The obligation of the Company hereunder to issue and sell the Notes to the
Buyer at any Closing is subject to the satisfaction, at or before the Closing
Date, 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 by providing the Buyer with prior written notice thereof: 

 

(i) The Buyer shall have executed each of the other Transaction Documents to
which it is a party and delivered the same to the Company.

 

(ii)    The Buyer shall have delivered to the Company the Purchase Price for the
Note being purchased by the Buyer at the Closing by wire transfer of immediately
available.

 

(iii)   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
Date as though originally made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct as
of such 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 Date.

 

7. CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.

 

(a) The obligation of the Buyer hereunder to purchase its Note at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, 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 by
providing the Company with prior written notice thereof: 

 

(i) The Company shall have duly executed and delivered to the Buyer each of the
Transaction Documents to which it is a party and the Company shall have duly
executed and delivered to the Buyer a Note being purchased by the Buyer at any
Closing pursuant to this Agreement.

  

(ii)   Since the date of execution of this Agreement, no event or series of
events shall have occurred that reasonably would have or result in a Material
Adverse Effect.

 

(iii)   The Buyer shall have received the Pledge and Security Agreement, duly
executed by the Company.

 

(iv)  Any and all issued and outstanding shares of the Company’s Preferred
Stock, maintained by the Company in book entry, as the Company’s Series B
Preferred Stock is represented to be, or in any other form,, shall be subject to
a standstill agreement entered into by the Preferred Shareholder(s) whereby the
Preferred Stock shall not be voted, exercised, sold or otherwise transferred
prior to a cumulative total of $400,000 being invested in the Company from the
Buyer or other investors The Company’s Preferred Stock will be cancelled
concurrent with a cumulative total of $400,000 being invested in the Company
from the Buyer or other investors.

 

(v) Concurrent with the execution of this Agreement, Mr. Gregg Linn shall have
resigned as the Company’s Chief Executive Officer, and entered into a customary
separation agreement that is satisfactory to Buyer, and shall have agreed to
deliver, and relinquish and/or transfer power over, all corporate records,
documents and other corporate information, including bank accounts, to the newly
appointed Board of Directors.

 

12

 

 

(vi) Concurrent with the execution of this Agreement, Mr. Joseph Roth and Mr.
Randall Letcavage shall have resigned from the Company’s Board of Directors and
as officers of the Company and shall have executed a release of the Company in a
form that shall be acceptable to Buyer.

 

(vii) John Hartwell and Corinne Ramos shall have agreed to dismiss the lawsuit
against the Company and Gregg Linn.

 

(viii) Concurrent with the execution of this Agreement, Mr. Gregg Linn’s
resignation letter from the board of directors shall be executed and held in
escrow, to be dated and released concurrent with aggregate closing (s) of Notes
totaling an aggregate of $400,000 from Buyer or other investors, which aggregate
closing(s) of Notes shall occur within sixty (60) days of the closing of Notes
by Infusion 51a, LP, which occurred on June 19, 2017.

 

(xi) Amarantus BioScience Holdings, Inc. (“Amarantus”) shall have entered into a
revised contingent settlement agreement with certain investors in a form
acceptable to Buyer to allow for Amarantus’ collateral release.

 

(xii) There shall be a settlement of the following convertible notes currently
in default:

 

a. $605k Infusion

b. $225k Coastal

c. $40k Cottone/Brewer

d. $25k Rick Randle

 

(xiii) There shall be a settlement, on terms acceptable to Buyer, of $750,000 in
Amarantus’ contingent Accounts Payable assumption from its merger agreement with
the Company.

 

(xiii) The Company shall have entered into lock-up agreements related to the
following, on terms acceptable to Buyer:

 

a. International Infusion and its affiliates.

b. Company shareholders 30M+ shares.

c. The issuance and lock-up of consulting shares previously approved by the
Board of Directors.

 

(xiv) The following legal matters shall have been resolved to the satisfaction
of Buyer:

 

a. The EGS lawsuit.

b. The Memory Dx lawsuit (which shall require a revised settlement because of
the Company has not engaged in a merger).

 

(xv) The confirmation of the Company’s Accounts Payable outstanding and
negotiated settlement terms with major creditors on terms acceptable to Buyer.

 

(xvi) The confirmation by Company that no resigning officer or director has
engaged in impropriety as shall be acceptable to Buyer.

 

(xvii) An Officer of the Company shall have certified to Buyer, in such form as
shall be acceptable to Buyer, that conditions (iii) through (xvi), above, have
been fulfilled.

 

13

 

 

8. MISCELLANEOUS.

 

(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of Nevada, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Nevada or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Nevada. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER
TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY
OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. In the event that any signature is delivered by
facsimile transmission or by an e-mail which contains a portable document format
(.pdf) file of an executed signature page, such signature page shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page
were an original thereof.

 

(c) Headings; Gender. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement. Unless the context clearly indicates otherwise, each pronoun herein
shall be deemed to include the masculine, feminine, neuter, singular and plural
forms thereof. The terms “including,” “includes,” “include” and words of like
import shall be construed broadly as if followed by the words “without
limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import
refer to this entire Agreement instead of just the provision in which they are
found.

  

(d) Severability; Maximum Payment Amounts. If any provision of this Agreement is
prohibited by law or otherwise determined to be invalid or unenforceable by a
court of competent jurisdiction, the provision that would otherwise be
prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or
unenforceability of such provision shall not affect the validity of the
remaining provisions of this Agreement so long as this Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair
the respective expectations or reciprocal obligations of the parties or the
practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the
prohibited, invalid or unenforceable provision(s) with a valid provision(s), the
effect of which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s). Notwithstanding anything to the contrary contained
in this Agreement or any other Transaction Document (and without implication
that the following is required or applicable), it is the intention of the
parties that in no event shall amounts and value paid by the Company and/or any
of its Subsidiaries (as the case may be), or payable to or received by the
Buyers, under the Transaction Documents (including without limitation, any
amounts that would be characterized as “interest” under applicable law) exceed
amounts permitted under any applicable law. Accordingly, if any obligation to
pay, payment made to the Buyer, or collection by the Buyer pursuant the
Transaction Documents is finally judicially determined to be contrary to any
such applicable law, such obligation to pay, payment or collection shall be
deemed to have been made by mutual mistake of the Buyer, the Company and its
Subsidiaries and such amount shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by the applicable law. Such adjustment shall
be effected, to the extent necessary, by reducing or refunding, at the option of
the Buyer, the amount of interest or any other amounts which would constitute
unlawful amounts required to be paid or actually paid to the Buyer under the
Transaction Documents. For greater certainty, to the extent that any interest,
charges, fees, expenses or other amounts required to be paid to or received by
the Buyer under any of the Transaction Documents or related thereto are held to
be within the meaning of “interest” or another applicable term to otherwise be
violative of applicable law, such amounts shall be pro-rated over the period of
time to which they relate.

 

(e) Entire Agreement; Amendments. This Agreement, the other Transaction
Documents and the schedules and exhibits attached hereto and thereto and the
instruments referenced herein and therein supersede all other prior oral or
written agreements between the Buyer, the Company, its Subsidiaries, their
affiliates and Persons acting on their behalf, including, without limitation,
any transactions by the Buyer with respect to Common Stock or the Securities,
and the other matters contained herein and therein, and this Agreement, the
other Transaction Documents, the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein contain the entire
understanding of the parties solely with respect to the matters covered herein
and therein; For clarification purposes, the Recitals are part of this
Agreement. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Buyer.

 

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(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party) or electronic mail; or (iii) one (1) Business Day after deposit
with an overnight courier service with next day delivery specified, in each
case, properly addressed to the party to receive the same. The addresses,
facsimile numbers and e-mail addresses for such communications shall be:

 

If to the Company:

 

Avant Diagnostics, Inc.

217 Perry Parkway

Suite 8

Gaithersburg, MD 20877

Attention: Gerald Commissiong, Executive Director

 

With a copy (for informational purposes only) to:

 

Sheppard, Mullin, Richter & Hampton LLP

30 Rockefeller Plaza, 39th Floor

New York, New York 10112

Telephone: (212) 653-8700

Facsimile: (917) 438-6137

Attn: Stephen A. Cohen, Esq.

E-Mail: scohen@sheppardmullin.com

 

If to the Buyer, to its address, e-mail address and facsimile number set forth
on the Schedule of Buyers, with copies to the Buyer’s representatives as set
forth on the Schedule of Buyers, or to such other address, e-mail address and/or
facsimile number and/or to the attention of such other Person as the recipient
party has specified by written notice given to each other party five (5) days
prior to the effectiveness of such change. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine
or e-mail containing the time, date, recipient facsimile number and, with
respect to each facsimile transmission, an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

 

(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns,
including any purchasers of any of the Notes. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Buyer. The Buyer may assign some or all of its rights hereunder
in connection with any transfer of any of its Securities without the consent of
the Company, in which event such assignee shall be deemed to be a buyer
hereunder with respect to such assigned rights.

 

(h) 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.

 

(i) Survival. The representations, warranties, agreements and covenants shall
survive any closing. The Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.

 

(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

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(k) Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party. No specific
representation or warranty shall limit the generality or applicability of a more
general representation or warranty. Each and every reference to share prices,
shares of Common Stock and any other numbers in this Agreement that relate to
the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions
that occur with respect to the Common Stock after the date of this Agreement. It
is expressly understood and agreed that for all purposes of this Agreement, and
without implication that the contrary would otherwise be true, neither
transactions nor purchases nor sales shall include the location and/or
reservation of borrowable shares of Common Stock.

  

(l) Remedies. The Buyer and in the event of assignment by the Buyer of its
rights and obligations hereunder, each holder of Securities, shall have all
rights and remedies set forth in the Transaction Documents and all rights and
remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law. Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law.  

 

(m) Withdrawal Right. Notwithstanding anything to the contrary contained in (and
without limiting any similar provisions of) the Transaction Documents, whenever
the Buyer exercises a right, election, demand or option under a Transaction
Document and the Company or any Subsidiary does not timely perform its related
obligations within the periods therein provided, then the Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the
Company or such Subsidiary (as the case may be), any relevant notice, demand or
election in whole or in part without prejudice to its future actions and rights.

 

(n) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.

 

[signature pages follow]

 

16

 

 

IN WITNESS WHEREOF, the Buyer and the Company have caused their respective
signature page to this Agreement to be duly executed as of the date first
written above.

 

  COMPANY:       AVANT DIAGNOSTICS, INC.       By:       Name: Philippe Goix    
Title: CEO

 

17

 

 

IN WITNESS WHEREOF, the Buyer and the Company have caused their respective
signature page to this Agreement to be duly executed as of the date first
written above.

 

  BUYER:       Xpress Group International Limited       By:       Name:    
Title:

  

18

 

 

EXHIBIT A

 

sENIOR sECURED cONVERTIBLE pROMISSORY NOTE

 

19

 

 

eXHIBIT B

 

WARRANTS

 

20

 

 

EXHIBIT C

 

PURCHASE RIGHTS

 

21

 

 

EXHIBIT D

 

pLEDGE AGREEMENT

 

22

 

 

Schedule 4(d)

 

In connection with certain convertible promissory notes issued by the Company
between May 2016 and the date of this Agreement, the Company is required to
obtain the consent of certain noteholders in connection with their investment
and certain convertible notes issued by the Company are in default as of the
date hereof The Company is currently working with these investors to waive all
prior defaults and obtain the proper consents in connection with the
transactions contemplated by this Agreement.

 

Schedule 4(g)

 

The Company is currently in default under certain promissory notes issued to
various investors between May 2016 and the date of this Agreement. The Company
is working with the investors to waive all prior defaults.

 

The Company is currently in default under the license agreement for its Memory
DX product and the Company has a default judgment entered against it in excess
of $2,000,000. The Company is working with the licensor to waive all prior
defaults.

 

The Company has been sued by employees of Theranostics for past due salary. The
Company is working with the former employees to waive all prior defaults.

 

The Company has been sued by its former legal counsel for past due fees for
services rendered. The Company is working with the former counsel to settle all
disputes.

 

The Company is currently in default under its lease agreement for its
Gettysburg, MD facility.

 

Schedule 4(h)

 

The Company is currently in default under its obligations for its CLIA license
in the State of Maryland.

 

 

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