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AMENDED AND RESTATED

 

SECURITIES PURCHASE AGREEMENT 

 

This Amended and Restated Securities Purchase Agreement (the “Agreement”) is
made and entered into as of June 9, 2016 (the “Effective Date”), and amends and
restates, in its entirety, that certain Share Subscription Agreement (“Prior
Agreement”) made and entered into as of November 20, 2015, by and between Boston
Carriers, Ltd., a Marshall Islands company, of Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro MH96960, Marshall Islands (the “Predecessor”), and
YP Holdings, LLC, a Texas limited liability company, of 6002 Costera Lane,
Dallas, Texas (“Subscriber”).

 

Recitals

 

A.                       The Prior Agreement was previously amended on January
1, 2016 to replace the Predecessor with Boston Carriers, Inc. (f/k/a Integrated
Inpatient Solutions, Inc.), then a Nevada corporation but presently a Marshall
Islands corporation (the “Company”), as the issuer of the 200 Series A
Preference Shares, 100 of which were to be sold and 100 of which were to be
issued as a commitment fee (collectively, the “Preference Shares”).

 

B.                       The parties wish to have the Company issue a
convertible promissory note in the principal face value of $3,000,000 (the
“Note”) in lieu of issuing the Preference Shares to the Subscriber.

 

C.                        The parties desire that, upon the terms and subject to
the conditions herein, Subscriber will acquire the Note; and

 

D.                       The offer and issue of the Note provided for herein are
being made pursuant to Section 4(a)(2) and/or Regulation S under the Act.

 

Agreement

 

In consideration of the foregoing, the receipt and adequacy of which are hereby
acknowledged, Company and Subscriber agree as follows:

 

I.                         Definitions. In addition to the terms defined
elsewhere in this Agreement and the Transaction Documents, capitalized terms
that are not otherwise defined herein have the meanings set forth in the
Glossary of Defined Terms attached hereto as Exhibit 1.

 

II.Subscription.

 

A.                       Subscription Amount. Subject to the terms and
conditions herein and the satisfaction of the conditions to the Closing set
forth below, Company hereby issues to Subscriber, and Subscriber hereby
subscribes for, the Note, a form of which is attached hereto as Exhibit 2. The
Company acknowledges receipt of the Subscription Amount, as such term was
defined in the Prior Agreement, and that there is no further consideration
required hereunder except for the Subscriber’s agreement to accept the Note in
lieu of the Preference Shares as provided by the Prior Agreement. In the event
of a conflict between the terms of the Note and the terms of this Agreement, the
terms of the Note shall control.

 

B.                       Deliveries. The following documents will be fully
executed and delivered on the Effective Date:

 

 

 

1.This Agreement; and

 

2.The Note, in the form attached hereto as Exhibit 2;

 

 

III.Conditions. Notwithstanding any other provision, as a condition precedent to
effectiveness of this Agreement, all of the following conditions must be
satisfied on the Effective Date:

 

1.                       All documents, instruments and other writings required
to be delivered by Company to Subscriber pursuant to any provision of this
Agreement or in order to implement and effect the transactions contemplated
herein have been fully executed and delivered, including without limitation
those enumerated in Section II.B above;

 

2.                       The representations and warranties of Company and
Subscriber set forth in this Agreement are true and correct in all material
respects as if made on such date;

 

3.                       There is not then in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated in any Transaction
Document, or requiring any consent or approval which will not have been
obtained, nor is there any pending or threatened proceeding or investigation
which may have the effect of prohibiting or adversely affecting any of the
transactions contemplated by this Agreement; no statute, rule, regulation,
executive order, decree, ruling or injunction will have been enacted, entered,
promulgated or adopted by any court or governmental authority of competent
jurisdiction that prohibits the transactions contemplated by this Agreement, and
no actions, suits or proceedings will be in progress, pending or, to Company’s
knowledge threatened, by any person other than Subscriber or any Affiliate of
Subscriber, that seek to enjoin or prohibit the transactions contemplated by
this Agreement; and

 

4.                       Any rights of first refusal, preemptive rights, rights
of participation, or any similar right to participate in the transactions
contemplated by this Agreement have been waived in writing.

 

B.                                Closing and Payment. The “Closing” shall occur
on the Effective Date, immediately when all conditions set forth in Section II.C
have been fully satisfied; on such date, (a) Subscriber will execute and deliver
this Agreement to the Company; and (b) Company will deliver to Subscriber by
reputable overnight courier, to Subscriber’s address first stated above,
immediately upon receipt of the signed Agreement from the Subscriber, the Note
and the other deliverables set forth in Section II. B. above.

 

IV.Representations and Warranties. The Company represents and warrants that it
is a publicly reporting company with the Commission. Company hereby represents
and warrants to, and as applicable covenants with, Subscriber as of the Closing:

 

1.                       Organization and Qualification. Company and each
Subsidiary is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, as applicable, with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Neither Company nor any Subsidiary is in violation or
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of
Company and each Subsidiary is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in a Material Adverse Effect and no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

 

 

 

 

2.                       Authorization; Enforcement. Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations hereunder or thereunder. The execution and delivery of each of the
Transaction Documents by Company and the consummation by it of the transactions
contemplated hereby or thereby have been duly authorized by all necessary action
on the part of Company and no further consent or action is required by

Company other than the filing of the Certificate of Designations. Each of the
Transaction Documents has been, or upon delivery will be, duly executed by
Company and, when delivered in accordance with the terms hereof, will constitute
the valid and binding obligation of Company, enforceable against Company in
accordance with its terms, except (a) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally, (b)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (c) insofar as indemnification
and contribution provisions may be limited by applicable law. Neither Company
nor any Subsidiary is in violation of any of the provisions of its respective
certificate or articles of incorporation, by-laws or other organizational or
charter documents.

 

3.                       No Conflicts. The execution, delivery and performance
of the Transaction Documents by Company, the issuance of the Note and the
consummation by Company of the other transactions contemplated thereby do not
and will not (a) conflict with or violate any provision of Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, (b) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, result in the creation of any Lien upon any of the properties or assets
of Company or any Subsidiary, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to
which Company or any Subsidiary is a party or by which any property or asset of
Company or any Subsidiary is bound or affected, (c) conflict with or result in a
violation of any material law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which
Company or a Subsidiary is subject (including federal and state securities laws
and regulations), or by which any property or asset of Company or a Subsidiary
is bound or affected, or (d) conflict with or violate the terms of any material
agreement by which Company or any Subsidiary is bound or to which any property
or asset of Company or any Subsidiary is bound or affected; except in the case
of each of clauses (b), (c) and (d), such as could not have or reasonably be
expected to result in a Material Adverse Effect.

 

4.                       Litigation. There is no action, suit, inquiry, notice
of violation, proceeding or investigation pending or, to the knowledge of
Company, threatened against or affecting Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”), which could adversely affect or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the Note. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by Company or any
Subsidiary under the Exchange Act or the Act.

 

5.                       Filings, Consents and Approvals. Neither Company nor
any Subsidiary is required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by Company of the
Transaction Documents, other than any required federal and state securities
filings and such filings and approvals as are required to be made or obtained
under the applicable Trading Market rules in connection with the transactions
contemplated hereby, each of which has been, or if not yet required to be filed
will be, timely filed.

 

6.                       Disclosure; Non-Public Information. Company will
disclose all material terms of this Agreement and the transactions contemplated
hereby in a filing with the Commission on Form 8-K no later than 4 Trading Days
following the Effective Date. Notwithstanding any other provision, except with
respect to information that must be, and only to the extent that it actually is,
timely publicly disclosed by Company pursuant to the foregoing sentence, neither
Company nor any other Person acting on its behalf has provided Subscriber or its
representatives, agents or attorneys with any information that constitutes or
might constitute material, non-public information, including without limitation
this Agreement and the Exhibits and Disclosure Schedules hereto. No information
contained in the Disclosure Schedules constitutes material non-public
information. There is no adverse material information regarding Company that has
not been publicly disclosed prior to the Effective Date. Company understands and
confirms that Subscriber will rely on the foregoing representations and
covenants in effecting transactions in securities of Company. All disclosure
provided to Subscriber regarding Company, its business and the transactions
contemplated hereby, including without limitation the Disclosure Schedules,
furnished by or on behalf of Company with respect to the representations and
warranties made herein are true and correct in all material respects and do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.

 

 

 

7.                       No Integrated Offering, Neither Company, nor any of its
Affiliates, nor any Person acting on its or 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 cause this offering of the Note
to be integrated with prior offerings by Company that cause a violation of the
Act or any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of the Trading Market.

 

8.                       Financial Condition. The Public Reports set forth as of
the dates thereof all outstanding secured and unsecured Indebtedness of Company
or any Subsidiary, or for which Company or any Subsidiary has commitments, and
any default with respect to any Indebtedness. Company does not intend to incur
debts beyond its ability to pay such debts as they mature, taking into account
the timing and amounts of cash to be payable on or in respect of its debt.

 

9.                       No Material Misstatement. No representation or warranty
or other statement made by Company in the Public Reports or any Transaction
Document contains any untrue statement or omits to state a material fact
necessary to make any of them, in light of the circumstances in which it was
made, not misleading. Company is not aware of any facts or circumstances that
would cause the transactions contemplated by the Transaction Documents, when
consummated, to violate the registration requirements under Section 5 of the Act
or other federal or state securities laws or regulations.

 

10.                  Investment Company. Company is not, and is not an Affiliate
of, and immediately after issuance of the Note, will not be or be an Affiliate
of, an “investment company” within the meaning of the Investment Company Act of
1940, as amended. Company will conduct its business in a manner so that it will
not become subject to the Investment Company Act.

 

11.                  Capitalization. The capitalization of Company is as
described in Company’s most recently filed Public Report and Company has not
issued any share capital since such filing. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents which
has not been waived or satisfied. Except as a result of the subscription for the
Note, there are no outstanding options, warrants, script rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any Person
any right to subscribe for or acquire, any Common Shares, or contracts,
commitments, understandings or arrangements by which Company or any Subsidiary
is or may become bound to issue additional Common Shares or securities
convertible into or exercisable for Common Shares. The issuance of the Note will
not obligate Company to issue Common Shares or other securities to any Person,
other than Subscriber, and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange, or reset price under
such securities. All of the outstanding shares in the capital of Company are
validly issued, fully paid and nonassessable, have been issued in material
compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. Except as set forth in Section
II.D.3 above, no further approval or authorization of any shareholder, the Board
of Directors of Company or others is required for the issuance of the Note.
There are no shareholder agreements, voting agreements or other similar
agreements with respect to Company’s share capital to which Company is a party
or, to the knowledge of Company, between or among any of Company’s shareholders.

 

12.                 Subsidiaries. All of the direct and indirect subsidiaries of
Company are set forth in the Public Reports or the corresponding section of the
Disclosure Schedules. Company owns, directly or indirectly, all of the capital
stock or other equity interests of each Subsidiary, and all of such directly or
indirectly owned capital stock or other equity interests are owned free and
clear of any Liens. All the issued and outstanding shares of capital stock of
each Subsidiary are duly authorized, validly issued, fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or purchase
securities.

 

 

 

 

13.                  Public Reports; Financial Statements. Company has filed all
required Public Reports for the one year preceding the Effective Date. As of
their respective dates or as subsequently amended, the Public Reports complied
in all material respects with the requirements of the Act and the Exchange Act
and the rules and regulations of the Commission promulgated thereunder, as
applicable, and none of the Public Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of Company included in the Public Reports, as amended, comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with GAAP,
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of Company and its consolidated subsidiaries as of and for
the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.

 

14.                  Material Changes. Except as specifically disclosed in the
Public Reports, (a) there has been no event, occurrence or development that has
had, or that could reasonably be expected to result in, a Material Adverse
Effect, (b) Company has not incurred any liabilities (contingent or otherwise)
other than (i) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice, and (ii) liabilities not
required to be reflected in Company’s financial statements pursuant to GAAP or
required to be disclosed in filings made with the Commission, (c) Company has
not altered its method of accounting, (d) Company has not declared or made any
dividend or distribution of cash or other property to its shareholders or
purchased, redeemed or made any agreements to purchase or redeem any shares in
the capital of the Company, and (e) Company has not issued any equity securities
to any officer, director or Affiliate, except pursuant to existing Company
equity incentive plans. Company does not have pending before the Commission any
request for confidential treatment of information.

 

15.               Litigation. There is no Action pending or, to the knowledge of
the Company, threatened, which could reasonably be expected to result in a
Material Adverse Effect. Neither Company nor any Subsidiary, nor to the
knowledge of Company any director or officer thereof, is or has been the subject
of any Action involving a claim of violation of or liability under federal or
state securities laws or a claim of breach of fiduciary duty. There has not
been, and to the knowledge of Company, there is not pending or contemplated, any
investigation by the Commission involving Company or any current or former
director or officer of Company.

 

16.                  Labor Relations. No material labor dispute exists or, to
the knowledge of Company, is imminent with respect to any of the employees of
Company, which could reasonably be expected to result in a Material Adverse
Effect.

 

17.                  Compliance. Neither Company nor any Subsidiary (a) is in
material default under or in material violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would
result in a default by Company or any Subsidiary under), nor has Company or any
Subsidiary received notice of a claim that it is in material default under or
that it is in material violation of, any indenture, loan or credit agreement or
any other similar agreement or instrument to which it is a party or by which it
or any of its properties is bound (whether or not such default or violation has
been waived), (b) is in violation of any order of any court, arbitrator or
governmental body, or (c) is or has been in violation of any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws applicable to its business except in each
case as could not have a Material Adverse Effect.

 

18.                  Regulatory Permits. Company and each Subsidiary possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the Public Reports and as currently being
conducted, except where the failure to possess such permits could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect (“Material Permits”), and neither Company nor any
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.

 

19.                  Title to Assets. Company and each Subsidiary have good and
marketable title in fee simple to all real property owned by them that is
material to the business of Company and each Subsidiary and good and marketable
title in all personal property owned by them that is material to the business of
Company and each Subsidiary, in each case free and clear of all Liens, except
for Liens that do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by Company and each Subsidiary and Liens for the payment of federal, state or
other taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by Company and each
Subsidiary are held by them under valid, subsisting and enforceable leases of
which Company and each Subsidiary are in compliance.

 

 

 

20.                  Patents and Trademarks. Company and each Subsidiary have,
or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary or material for use in connection with their
respective businesses as described in the Public Reports and which the failure
to so have could have a Material Adverse Effect (collectively, “Intellectual
Property Rights”). Neither Company nor any Subsidiary has received a written
notice that the Intellectual Property Rights used by Company or any Subsidiary
violates or infringes upon the rights of any Person. To the knowledge of
Company, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property
Rights of Company or each Subsidiary.

 

21.                  Insurance. Company and each Subsidiary are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which
Company and each Subsidiary are engaged, including but not limited to directors
and officers insurance coverage at least equal to the Subscription Amount. To
Company’s knowledge, such insurance contracts and policies are accurate and
complete in all material respects. Neither Company nor any Subsidiary has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without an
increase in cost that would constitute a Material Adverse Effect.

 

22.                  Transactions With Affiliates and Employees. Except as set
forth in the Public Reports, none of the officers or directors of Company and,
to the knowledge of Company, none of the employees of Company is presently a
party to any transaction with Company or any Subsidiary (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of Company, any entity in which any officer, director, or any such employee has
a substantial interest or is an officer, director, trustee or partner, in each
case in excess of $120,000 other than (i) for payment of salary or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf
of Company and (iii) for other employee benefits, including stock option
agreements under any equity incentive plan of Company.

 

23.                  Certain Fees. No brokerage or finder’s fees or commissions
are or will be payable to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement. Notwithstanding any other
provision, Subscriber will have no obligation with respect to any fees or with
respect to any claims made by or on behalf of other Persons for fees of a type
contemplated in this section that may be due in connection with the transactions
contemplated by this Agreement or the other Transaction Documents.

 

24.                  Listing and Maintenance Requirements. The Common Shares are
registered pursuant to Section 12(g) of the Exchange Act, and Company has taken
no action designed to, or which to its knowledge is likely to have the effect
of, terminating the registration of the Common Shares under the Exchange Act nor
has Company received any notification that the Commission is contemplating
terminating such registration. Except as disclosed in the Public Reports,
Company has not, in the 12 months preceding the Effective Date, received notice
from any Trading Market on which the Common Shares are or have been listed or
quoted to the effect that Company is not in compliance with the listing or
maintenance requirements of such Trading Market. Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.

 

25.                 Application of Takeover Protections. Company and its Board
of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under Company’s Articles of Incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could
become applicable to Subscriber as a result of Subscriber and Company fulfilling
their obligations or exercising their rights under the Transaction Documents,
including without limitation Company’s issuance of the Note and Subscriber’s
ownership of the Note.

 

 

 

 

26.                  Tax Status. Company and each of its Subsidiaries has made
or filed all federal, state and foreign income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that Company and each of its Subsidiaries has set
aside on its books provisions reasonably adequate for the payment of all unpaid
and unreported taxes). Company has not executed a waiver with respect to the
statute of limitations relating to the assessment or collection of any foreign,
federal, statute or local tax. None of Company’s tax returns is presently being
audited by any taxing authority. Company would not be classified as a PFIC for
its most recently completed taxable year, and does not expect to be classified
as a PFIC for its current taxable year.

 

27.                  Foreign Corrupt Practices. Neither Company, nor to the
knowledge of Company, any agent or other person acting on behalf of Company, has
(a) directly or indirectly, used any corrupt funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (b) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (c) failed to disclose fully any
contribution made by Company, or made by any person acting on its behalf of
which Company is aware, which is in violation of law, or (d) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as
amended.

 

28.                  Accountants and Lawyers. Company’s accountants are set
forth in the Public Reports and such accountants are an independent registered
public accounting firm. There are no material disagreements presently existing,
or reasonably anticipated by Company to arise, between Company and the
accountants or lawyers formerly or presently employed by Company.

 

29.                  Offshore Transaction. Company is a foreign private issuer,
as defined in Rule 405 under the Act. Company has not, and will not, engage in
any directed selling efforts, as defined in Regulation S, in the United States
in respect of any of the Note. Company is offering and selling the Note only in
offshore transactions, in accordance with Regulation S. Company and its
Affiliates have complied, and will comply, with the offering restrictions
requirements of Regulation S. Company has only offered, and will only offer, the
Note to Subscriber.

 

30.                  Acknowledgments Regarding Subscriber. Company’s decision to
enter into this Agreement has been based solely on the independent evaluation by
the Company and its representatives, and Company acknowledges and agrees that:

 

a.                     Subscriber is not, has never been, and as a result of the
transactions contemplated by the Transaction Documents will not become an
officer, director, insider, control person, to Company’s knowledge 10% or
greater shareholder, or otherwise an affiliate of Company as defined under Rule
12b-2 of the Exchange Act;

 

b.                       Subscriber is acting solely in the capacity of arm’s
length purchaser with respect to this Agreement and the transactions
contemplated hereby;

 

c.                     Subscriber does not make or has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section III.C below; and

 

d.                   Subscriber is not acting as a legal, financial, accounting
or tax advisor to Company, or fiduciary of Company, or in any similar capacity,
with respect to this Agreement and the transactions contemplated hereby. Any
statement made by Subscriber or any of its representatives or agents in
connection with this Agreement and the transactions contemplated hereby is not
advice or a recommendation, and is merely incidental to Subscriber’s
subscription for the Note.

 

B.                       Representations and Warranties of Subscriber.
Subscriber hereby represents and warrants as of the Closing as follows:

 

 

 

 

1.                       Organization; Authority. Subscriber is an entity
validly existing and in good standing under the laws of the jurisdiction of its
organization with full right, company power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations thereunder. The execution, delivery and
performance by Subscriber of the transactions contemplated by this Agreement
have been duly authorized by all necessary company or similar action on the part
of Subscriber. Each Transaction Document, to which it is a party has been, or
will be, duly executed by Subscriber, and when delivered by Subscriber in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of subscriber, enforceable against it in accordance with its terms,
except (a) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (b) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies, and (c) insofar as indemnification and contribution
provisions may be limited by applicable law.

 

2.                       Subscriber Status. Subscriber certifies that Subscriber
is not, and was not at the time Subscriber was offered the Note, a U.S. Person,
and is not acquiring the Note for the account or benefit of any U.S. Person.
Subscriber agrees not to resell the Note and only to resell the Common Shares it
may acquire upon conversion of the Note in accordance with the provisions of
Regulation S, pursuant to registration under the Act, or pursuant to an
available exemption from registration. Subscriber agrees not to engage in
hedging transactions with regard to the Common Shares unless in compliance with
the Act.

 

3.                       Experience of Subscriber. Subscriber is an accredited
investor, as defined in Rule 501(a) under the Act. Subscriber is acquiring the
Note as principal for its own account, in the ordinary course of its business.
Subscriber, either alone or together with Subscriber’s 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 Note, and has so evaluated the merits and risks of such investment.
Subscriber is able to bear the economic risk of an investment in the Note and,
at the present time, is able to afford a complete loss of such investment.

 

4.                       No Short Sales. Subscriber (a) does not hold any short
position in, (b) has not engaged in any Short Sales of, and (c) has not
participated in any hedging transactions involving, the Common Shares prior to
the Effective Date.

 

V.Securities and Other Provisions.

 

A.                       Subscriber Due Diligence. Subscriber will have the
right and opportunity to conduct customary due diligence with respect to any
Registration Statement or Prospectus in which the name of Subscriber or any
Affiliate of Subscriber appears.

 

B.                       Furnishing of Information. As long as Subscriber owns
the Note, Company covenants to use its reasonable best efforts to timely file,
or obtain extensions in respect thereof and file within the applicable grace
period, all reports required to be filed by Company after the Effective Date
pursuant to the Exchange Act or, to the extent not then registered under the
Exchange Act, the alternative reporting guidelines of OTC Markets Group, Inc. or
its successor.

 

C.                        Disclosure and Publicity. Company will notify
Subscriber prior to issuing any current report, press release, public statement
or communication with respect to the transactions contemplated hereby.

 

D.                      Shareholders Rights Plan. No claim will be made or
enforced by Company or, to the knowledge of Company, any other Person that
Subscriber is an “Acquiring Person” under any shareholders rights plan or
similar plan or arrangement in effect or hereafter adopted by Company, or that
Subscriber could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Note under the Transaction Documents or
under any other agreement between Company and Subscriber. Company will conduct
its business in a manner so that it will not become subject to the Investment
Company Act of 1940, as amended.

 

E.                        No Non-Public Information. Company covenants and
agrees that neither it nor any other Person acting on its behalf will, provide
Subscriber or its agents or counsel with any information that Company believes
or reasonably should believe constitutes material non-public information. On and
after the Effective Date, neither Subscriber nor any Affiliate of Subscriber
will have any duty of trust or confidence that is owed directly, indirectly, or
derivatively, to Company or the shareholders of Company, or to any other Person
who is the source of material non-public information regarding Company. Company
understands and confirms that Subscriber will be relying on the foregoing in
effecting transactions in securities of Company.

 

 

 

 

F.Indemnification of Subscriber.

 

1.                       Obligation to Indemnify. Subject to the provisions of
this Section IV.F, Company will indemnify and hold Subscriber, its Affiliates,
and each of their directors, officers, shareholders, partners, employees, agents
and attorneys, and any person who controls Subscriber within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act (collectively,
“Subscriber Parties” and each a “Subscriber Party”), harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, reasonable
costs and expenses, including all judgments, amounts paid in settlements, court
costs and reasonable attorneys’ fees and costs of investigation (collectively,
“Losses”) that any Subscriber Party may suffer or incur as a result of or
relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by Company in this Agreement or in the other Transaction
Documents, (b) any action instituted against any Subscriber Party, or any of
them or their respective Affiliates, by any shareholder of Company who is not an
Affiliate of a Subscriber Party, with respect to any of the transactions
contemplated by the Transaction Documents, (c) any untrue statement or alleged
untrue statement of a material fact contained in any filing or public statement
made by Company, or arising out of or based upon any omission or alleged
omission to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; or (d) any Subscriber Party becoming involved in any capacity in any
proceeding by or against any Person who is a shareholder of Company, as a result
of Subscriber’s acquisition of the Note under this Agreement.

 

2.                       Procedure for Indemnification. If any action will be
brought against a Subscriber Party in respect of which indemnity may be sought
pursuant to this Agreement, such Subscriber Party will promptly notify Company
in writing, and Company will have the right to assume the defense thereof with
counsel of its own choosing. Subscriber Parties will have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel will be at the expense of Subscriber
Parties except to the extent that (a) the employment thereof has been
specifically authorized by Company in writing, (b) Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (c) in
such action there is, in the reasonable opinion of such separate counsel, a
material conflict with respect to the dispute in question on any material issue
between the position of Company and the position of Subscriber Parties such that
it would be inappropriate for one counsel to represent Company and Subscriber
Parties. Company will not be liable to Subscriber Parties under this Agreement
(i) for any settlement by a Subscriber Party effected without Company’s prior
written consent, which will not be unreasonably withheld or delayed; or (ii) to
the extent, but only to the extent that a loss, claim, damage or liability is
either attributable to Subscriber’s breach of any of the representations,
warranties, covenants or agreements made by Subscriber in this Agreement or in
the other Transaction Documents. In no event shall the Company be liable for the
reasonable fees and expenses for more than one separate firm of attorneys (plus
local counsel as applicable) to represent all Subscriber Parties.

 

3.                       Other than the liability of Subscriber to Company for
uncured material breach of the express provisions of this Agreement, no
Subscriber Party will have any liability to Company or any Person asserting
claims on behalf of or in right of Company as a result of acquiring the Note
under this Agreement.

 

G.                       Reservation of Common Shares. Company shall at all
times maintain a reserve from its duly authorized Common Shares for issuance
pursuant to the Transaction Documents authorized Common Shares in an amount
equal to thrice the number of shares sufficient to immediately issue all Common
Shares potentially issuable upon any conversion of the Note at such time.

 

 

 

 

H.                      Activity Restrictions. For so long as Subscriber or any
of its Affiliates holds the Note, neither Subscriber nor any Affiliate will: (i)
vote any Common Shares owned or controlled by it, sign or solicit any proxies,
or seek to advise or influence any Person with respect to any voting securities
of Company; (ii) engage or participate in any actions, plans or proposals which
relate to or would result in (a) acquiring additional securities of Company,
alone or together with any other Person, which would result in beneficially
owning or controlling more than 9.99% of the total outstanding Common Shares or
other voting securities of Company, (b) an extraordinary corporate transaction,
such as a merger, reorganization or liquidation, involving Company or any of its
subsidiaries, (c) a sale or transfer of a material amount of assets of Company
or any of its subsidiaries, (d) any change in the present board of directors or
management of Company, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board, (e) any
material change in the present capitalization or dividend policy of Company, (f)
any other material change in Company’s business or corporate structure,
including but not limited to, if Company is a registered closed-end investment
company, any plans or proposals to make any changes in its investment policy for
which a vote is required by Section 13 of the Investment Company Act of 1940,
(g) changes in Company’s charter, bylaws or instruments corresponding thereto or
other actions which may impede the acquisition of control of Company by any
Person, (h) causing a class of securities of Company to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association,
(i) a class of equity securities of Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Act, or (j) any action,
intention, plan or arrangement similar to any of those enumerated above; or
(iii) request Company or its directors, officers, employees, agents or
representatives to amend or waive any provision of this section.

 

I.                          No Shorting. For so long as Subscriber holds the
Note, Subscriber will not engage in or effect, directly or indirectly, any Short
Sale of Company’s share capital.

 

J.                          Share Splits. If Company at any time on or after the
Effective Date subdivides (by any share split, share dividend, recapitalization
or otherwise) or combines (by combination, reverse share split or otherwise) one
or more classes of its outstanding Common Shares into a greater or lesser number
of shares, the share numbers and prices set forth in the Note, as in effect
immediately prior to such subdivision or combination, will be proportionately
reduced or increased, as applicable, effective at the close of business on the
date the subdivision or combination becomes effective.

 

K.                       Restrictions and Legends. The Note has not been
registered under the Act and may not be offered or sold in the United States
unless registered or an exemption from registration is available. Resales of any
of the Note by Subscriber must be made in accordance with Regulation S, the
registration requirements of the Act or an exemption therefrom. The offer and
issue of the Note to Subscriber is not made to a U.S. person or for the account
or benefit of a U.S. person. Company is required to refuse to register any
transfer of the Note not made in accordance with the provisions of Regulation S,
pursuant to registration under the Act, or pursuant to an available exemption
from registration. Upon the issuance thereof, and only until such time as the
same is no longer required under the applicable securities laws and regulations,
the certificates representing the Note will bear a legend in substantially the
following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION
TO A PERSON WHO IS NOT A U.S. PERSON PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). NONE OF THE SECURITIES
REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE ACT, OR ANY U.S. STATE
SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY
OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH
THE PROVISIONS OF REGULATIONS UNDER THE ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT. "UNITED STATES" AND "U.S. PERSON" ARE AS
DEFINED BY REGULATIONS UNDER THE ACT.

 

 

 

 

If Subscriber confirms the accuracy of its representations in Section III.C.2
above, any Common Shares issued to Subscriber more than 40 days after the
Effective Date shall be issued as DWAC Shares.

 

L.                        Share Conversions. Subscriber may convert a portion or
all of the principal amount of the Note at any time after the Effective Date,
from time to time, at its sole and absolute discretion. Company acknowledges
that Subscriber’s conversion of Note may result in substantial dilution.
Company’s absolute obligation to issue Common Shares to Subscriber upon
conversion of Note is an independent covenant, and any breach or alleged breach
of any provision of any Transaction Document by any person shall not excuse
performance of such obligation.

 

VI.General Provisions.

 

A.                       Notice. Unless a different time of day or method of
delivery is set forth in the Transaction Documents, any and all notices or other
communications or deliveries required or permitted to be provided hereunder will
be in writing and will be deemed given and effective on the earliest of: (a) the
date of transmission, if such notice or communication is delivered via facsimile
or electronic mail prior to 5:00 p.m. Eastern time on a Trading Day and an
electronic confirmation of delivery is received by the sender, (b) the next
Trading Day after the date of transmission, if such notice or communication is
delivered later than 5:00 p.m. Eastern time or on a day that is not a Trading
Day, (c) the next Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The addresses for such
notices and communications are such other address as may be designated in
writing, in the same manner, by such Person.

 

B.                       Amendments; Waivers. No provision of this Agreement may
be waived or amended except in a written instrument signed, in the case of an
amendment, by Company and Subscriber or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement will
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
will any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.

 

C.                        No Third-Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, except as otherwise set forth in
Section IV.J.

 

D.                      Fees and Expenses. Company has paid a flat rate
documentation fee to Subscriber’s counsel incurred in connection with drafting
this Agreement and the other Transaction Documents. Except as otherwise provided
in this Agreement, each party will pay the fees and expenses of its own
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of the Transaction Documents. Company acknowledges and
agrees that Subscriber’s counsel solely represents Subscriber, and does not
represent Company or its interests in connection with the Transaction Documents
or the transactions contemplated thereby. Company will pay all stamp and other
taxes and duties levied in connection with the issue of the Note, if any.

 

E.                        Severability. If any provision of this Agreement is
held to be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement will not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision that is a reasonable substitute therefor,
and upon so agreeing, will incorporate such substitute provision in this
Agreement.

 

F.                        Replacement of Certificates. If any certificate or
instrument evidencing the Note is mutilated, lost, stolen or destroyed, Company
will issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances will also pay any reasonable third-party costs
associated with the issuance of such replacement certificates.

 

 

 

 

G.                       Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Texas. Each of the Company
and Subscriber (i) hereby irrevocably submits to the exclusive jurisdiction and
venue of the courts (both state and federal) located in Dallas County, Texas,
for the purposes of any suit, action or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby, and (ii) hereby waives,
and agrees not to assert in any such suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that the
suit, action or proceeding is brought in an inconvenient forum or that the venue
of the suit, action or proceeding is improper. EACH PARTY WAIVES ALL RIGHTS TO
ANY TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS
AGREEMENT..

 

H.                      [Intentionally omitted.]

 

I.                          Remedies. In addition to being entitled to exercise
all rights provided herein or granted by law, including recovery of damages,
each of Subscriber and Company will be entitled to specific performance under
the Transaction Documents, and injunctive relief to prevent any actual or
threatened breach under the Transaction Documents, to the full extent permitted
under federal and state securities laws.

 

J.                          Payment Set Aside. To the extent that Company makes
a payment or payments to Subscriber pursuant to any Transaction Document or
Subscriber enforces or exercises its rights thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to Company, a trustee, receiver or any other person under any law,
including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action, then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied will be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.

 

K.                       Headings. The headings herein are for convenience only,
do not constitute a part of this Agreement and will not be deemed to limit or
affect any of the provisions hereof

 

L.                        Time of the Essence. Time is of the essence with
respect to all provisions of this Agreement that specify a time for performance.

 

M.                     Survival. The representations and warranties contained
herein will survive the Closing and the delivery of the Note until the entirety
of the Note issued to Subscriber or any Affiliate has been converted or repaid.

 

N.                       Construction. The parties agree that each of them
and/or their respective counsel has reviewed and had an opportunity to revise
the Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party will
not be employed in the interpretation of the Transaction Documents or any
amendments hereto. 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. All currency references
in any Transaction Document are to U.S. dollars.

 

O.                      Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together will be considered one and the
same agreement and will become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by portable document format, facsimile or electronic transmission,
such signature will 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.

 

P. Entire Agreement. This Agreement, including the Exhibits hereto, which are
hereby incorporated herein by reference, contains the entire agreement and
understanding of the parties, and supersedes all prior and contemporaneous
agreements, term sheets, letters, discussions, communications and
understandings, both oral and written, which the parties acknowledge have been
merged into this Agreement. No party, representative, attorney or agent has
relied upon any collateral contract, agreement, assurance, promise,
understanding or representation not expressly set forth hereinabove. The parties
hereby expressly waive all rights and remedies, at law and in equity, directly
or indirectly arising out of or relating to, or which may arise as a result of,
any Person’s reliance on any such assurance.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the Effective Date.

 

 

Company:

 

BOSTON CARRIERS, INC.

 

 

By: /s/ Antonios Bertsos Name: Antonios Bertsos Title: CEO

 

 

Subscriber:

 

YP HOLDINGS, LLC

 

 

By: /s/ Michael W. Yurkowsky Name: Michael W. Yurkowsky

Title: Manager

 

 

Exhibit 1

 

Glossary of Defined Terms

 

"$" refers to the lawful currency of the United States of America.

 

“Act” means the U.S. Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission thereunder.

 

“Action” has the meaning set forth in Section III.A.4.

 

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the Act.

 

“Agreement” means this Share Subscription Agreement.

 

“Closing” has the meaning set forth in Section II.D.

 

“Closing Price” means, for any security as of any date, the last closing bid
price for such security on the Trading Market, or, if the Trading Market begins
to operate on an extended hours basis and does not designate the closing bid
price, then the last bid price of such security prior to 4:00 p.m. Eastern time,
or, if the Trading Market is not the principal securities exchange or trading
market for such security, the last closing bid price of such security on the
principal securities exchange or trading market where such security is listed or
traded, or if the foregoing do not apply, the last closing bid price of such
security in the over-the-counter market on the electronic bulletin board for
such security, or, if no closing bid price is reported for such security, the
average of the bid prices of any market makers for such security as reported in
the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau,
Inc.).

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Common Shares” means the Common Shares of Company and any replacement or
substitute thereof, or any share capital into which such Common Shares will have
been changed or any share capital resulting from a reclassification of such
Common Shares and includes the Common Shares issuable upon conversion of the
Preference Shares.

 

“Company” has the meaning set forth in this Agreement.

 

“Disclosure Schedules” means the disclosure schedules of Company delivered
concurrently herewith. The Disclosure Schedules will contain no material
non-public information.

 

“DTC” means The Depository Trust Company, or any successor performing
substantially the same function for Company.

 

“DWAC Shares” means all Common Shares issued or issuable to Subscriber or any
Affiliate, successor or assign of Subscriber pursuant to any of the Transaction
Documents, all of which will be (a) issued in electronic form, (b) freely
tradable and without restriction on resale, and (c) timely credited by Company
to the specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under
its Fast Automated Securities Transfer (FAST) Program or any similar program
hereafter adopted by DTC performing substantially the same function.

 

“Equity Conditions” has the meaning set forth in the Certificate of
Designations.

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission thereunder.

 

“Effective Date” has the meaning set forth in the first paragraph of the
Agreement.

 

 

 

“GAAP” means U.S. generally accepted accounting principles applied on a
consistent basis during the periods involved.

 

“Indebtedness” means (a) any liabilities for borrowed money or amounts owed in
excess of $100,000, other than trade accounts payable incurred in the ordinary
course of business, (b) all guaranties, endorsements and other contingent
obligations in respect of Indebtedness of others, whether or not the same are or
should be reflected in Company’s balance sheet, or the notes thereto, except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $100,000 due under leases required to
be capitalized in accordance with GAAP.

 

“Intellectual Property Rights” has the meaning set forth in Section III.B.10.

 

“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

 

“Material Adverse Effect” includes any material adverse effect on (a) the
legality, validity or enforceability of any Transaction Document, or (b) the
results of operations, assets, business, or financial condition of Company and
the Subsidiaries, taken as a whole, which is not disclosed in the Public Reports
prior to the Effective Date, or (c) a Company’s ability to perform in any
material respect on a timely basis its obligations under any Transaction
Document.

 

“Material Permits” has the meaning set forth in Section III.B.8.

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government, or an agency or subdivision thereof, or other entity
of any kind.

 

"PFIC" means a passive foreign investment company, within the meaning of Section
1297 of the U.S. Internal Revenue Code of 1986, as amended,

 

“Public Reports” includes all reports required to be filed by Company under the
Act or the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the Effective Date and thereafter.

 

“Regulation S” means Regulation S promulgated under the Act.

 

“Short Sale” means a “short sale” as defined in Rule 200 of Regulation SHO of
the Exchange Act.

 

“Subscriber” has the meaning set forth in the first paragraph of the Agreement.

 

“Subscription Amount” has the meaning set forth in Section II.A.1.

 

“Subsidiary” means any Person Company owns or controls, or in which Company,
directly or indirectly, owns a majority of the capital stock or similar interest
that would be disclosable pursuant to Regulation S-K, Item 601(b)(21).

 

“Trading Day” means any day on which the Common Shares are traded on the Trading
Market; provided that it will not include any day on which the Common Shares are
(a) scheduled to trade for less than 5 hours, or (b) suspended from trading.

 

“Trading Market” means NASDAQ or whatever is at the time the principal U.S.
trading exchange or market for the Common Shares, excluding OTC Pink Limited
Information or below. All Trading Market data shall be measured as provided by
the appropriate function of the Bloomberg Professional service of Bloomberg
Financial Markets or its successor performing similar functions.

 

“Transaction Documents” means this Agreement, the other agreements, certificates
and documents referenced herein or the form of which is attached hereto, and the
exhibits, schedules and appendices hereto and thereto.

 

“Transfer Agent” means the Company’s current transfer agent, or any successor
transfer agent for the Common Shares.

 

“U.S. Person” has the meaning given by Rule 902(k) of Regulation S.

 

 

Exhibit 2

 

Form of Note