EXHIBIT 10.6
 
ESCROW & COMPLIANCE ATTORNEY AGREEMENT
 
THIS ESCROW AGREEMENT (the "Agreement") is made and effective this 9th day of
June, 2014 by and among Spotlight Innovation, Inc. ("Company"), Elco Securities,
Ltd. ("Intermediary"), Catwalk Capital, LLC. ("Advisor"), Cristopher Grunewald
(the "Shareholder(s)"), who is/are the holder(s) of 500,000 shares of Series C
Supervoting Preferred Stock of Company (each an "Insider" and collectively
"Insiders"), Jonathan Kramer ("Compliance Attorney"). Company, Intermediary,
Advisor, Insiders, and Compliance Attorney are collectively referred to as
"Parties".

RECITALS:

WHEREAS, Advisor, Intermediary, Insiders and Company have entered a series of
agreements including a Memorandum of Terms ("MOT") numbered MOT 849207105 STLT
and entered on June 9, 2014, a Unit Subscription Agreement ("USA") numbered USA
849207105 STLT entered on June 9, 2014 and an Account Management Agreement
("AMA") numbered AMA 849207105 STLT entered on June 9, 2014, under which
Investor(s) will invest certain amounts of capital investment for the equity
stock of the Company and Insiders will receive shares of common stock pursuant
to a value added model, the MOT, USA and AMA are collectively referred to as the
Offering Documents; and

WHEREAS, the parties wish to enter into this Compliance Attorney Agreement to
appoint a Compliance Attorney to perform the duties described in the Section 4.5
IV.8.3 of the MOT; and

WHEREAS, the parties have asked Jonathan Kramer to act as Escrow Agent &
Compliance Attorney for the receipt of the deposit of 500,000 shares of
Company's super voting Class C Series Preferred Stock, described in Exhibit C to
the MOT, par value $0.001 per share, (the “Certificate”), issued to the
Shareholders (each an "Insider" and collectively "Insiders"); and

WHEREAS, the parties hereby acknowledge that the foregoing recitals are true and
accurate.

NOW, THEREFORE, the parties hereto, for good and valuable consideration, the
adequacy of which is hereby acknowledged by the parties, intending to be legally
bound, the parties hereby agree as follows:

Section I. Appointment and Formation

1.1. Appointment of Compliance Attorney and Fees for Compliance Attorney. The
Parties hereby appoint Jonathan Kramer as the Compliance Attorney to perform the
duties and obligations set forth herein. The Compliance Attorney accepts the
appointment and agrees to manage the shares in escrow in accordance with the
terms contained herein. Company shall pay a fee of $1,000.00 to Compliance
Attorney upon the entry of this Agreement as Escrow Fee.
 
 
1

--------------------------------------------------------------------------------

 

1.2. Escrow Establishment. The Compliance Attorney shall receive the Certificate
of 500,000 shares of Company's Series C Preferred Stock, par value $0.001 per
share and shall hold those shares in escrow and subject to the terms of this
agreement. The Certificate representing the escrowed Series C Preferred Stock
("Certificate" and collectively "Certificates") shall be accompanied by proper
documentation to allow the Compliance Attorney to fulfill their obligations
under Section II of this Agreement such as Stock Powers.
 
1.3. Escrow Instructions. The Compliance Attorney shall hold the Preferred C
Share Certificates, stock power(s) and accompanying documents for the term of
the USA dated June 9, 2014, AMA dated June 9, 2014, and MOT dated June 9, 2014
until the Investment Term as described in the MOT 849207105 STLT has been
satisfied. The Compliance Attorney shall secure the Certificates and
accompanying paperwork in safekeeping. The Compliance Attorney may also receive
instructions from the Company or the Advisor regarding the deposited Certificate
pursuant to the Compliance Attorney Agreement.
 
1.4. Compliance Agreement Establishment.
 
a. All communications to Compliance Attorney shall be in writing, delivered by
US Mail, facsimile and/or electronic mail.
 
b. Compliance Attorney's duties hereunder may be altered, amended, modified or
revoked only by a written agreement signed by all of the Parties hereto.
 
c. Compliance Attorney shall be obligated only for the performance of such
duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by it
to be genuine and to have been signed or presented by the proper party or
parties. Compliance Attorney shall not be personally liable for any act any
Party (Company, Intermediary, Advisor, and Insiders) may do or omit to do
hereunder, whether as Compliance Attorney or as attorney in fact for any Party
while acting in good faith, and any act done or omitted by a Party pursuant to
the advice of its own attorneys shall be conclusive evidence of such good faith.
 
d. Compliance Attorney shall not be liable in any respect on account of the
identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.
 
e. If Compliance Attorney reasonably requires other or further instruments in
connection with this Agreement or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.
 
f. It is understood and agreed that should any dispute arise with respect to the
delivery and/or ownership or right of possession of the items held by the
Compliance Attorney hereunder, it is authorized and directed to retain in its
possession without liability to anyone all or any part of said items until such
disputes shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but he shall be under no duty whatsoever to institute or defend
any such proceedings.
 
 
2

--------------------------------------------------------------------------------

 

1.5. Interpleader. In the event Compliance Attorney shall be uncertain as to its
duties hereunder or Compliance Attorney is advised of a dispute between the
parties, Compliance Attorney shall so advise the parties and Compliance Attorney
shall hold all escrowed property pending resolution of the dispute. Compliance
Attorney may also commence an interpleader action in any court of competent
jurisdiction to seek adjudication of the rights of the parties. The Company
shall be jointly and severally liable for the costs and expenses, including
reasonable attorney’s fees associated with the bringing of such interpleader
action.
 
1.6. Indemnification of Compliance Attorney. Company, Insiders and Advisor
jointly and severally covenant and agree to indemnify, defend and hold
Compliance Attorney harmless, without limitation, from and against any loss,
liability, claim, demand, expense or cause of action, of any nature whatsoever,
incurred by Compliance Attorney, arising out of or in connection with this
Agreement or in connection with the performance of his duties as Compliance
Attorney, including, but not limited to, legal fees and other costs and expenses
of defending or preparing to defend against any such claim or liability, unless
such claim or liability arises out of the willful misconduct or gross negligence
of the Compliance Attorney. In addition, the parties agree to jointly and
severally agree to indemnify Compliance Attorney for any tax liabilities,
interest and penalties as well as any other governmentally imposed charge, which
result from his activities as Compliance Attorney. In no event shall the
Compliance Attorney be liable for indirect, special or consequential damages.
 
1.7. Miscellaneous. This Agreement shall bind and inure to the benefit of the
parties hereto and their successors and assigns. This Agreement shall be
governed by the laws of the State of Iowa, without reference to conflict of laws
principles. By execution and delivery of this Agreement, the parties agree and
accept that any legal action or proceeding brought with respect to this
Agreement shall be brought in the State of Iowa or the United States District
Court, for the Southern District of Iowa, and the parties expressly waive their
right to a trial by jury and any objection to personal jurisdiction, venue or
forum non conveniens. These agreements contain the entire agreement between the
parties with respect to the subject matter hereof: MOT 849207105 STLT, USA
849207105 STLT, AMA 849207105 STLT and CSW 849207105 STLT A-AJ. Any failure to
enforce any provision of this Agreement shall not constitute a waiver thereof or
of any other provision hereof. If any provision of this Agreement shall be held
to be invalid or unenforceable, in whole or in part, the remaining provisions
shall nevertheless remain in full force and effect as if the unenforceable
portion or portions were deleted. This Agreement may not be amended, nor any
obligation waived, except by a writing signed by both parties hereto.
 
1.8. Facsimile. The parties agree that one or more signed facsimile copies of
this Agreement shall be deemed to be original signatures.
 
 
3

--------------------------------------------------------------------------------

 

1.9. Notice. For purposes of this agreement the Parties shall deliver notice to
each other via certified mail or similar commercial delivery system at the
addresses shown below unless otherwise modified by such party in writing:

To: Company
Spotlight Innovation, Inc.
6750 Westown Pkwy, Suite 200-226
West Des Moines, IA 50266

To: Intermediary Elco Securities Ltd
Loyalist Plaza, Don Mackay Boulevard
PO Box AB-20377
Marsh Harbour, Abaco Bahamas

To: Advisor
Catwalk Capital, LLC
1730 LaBounty Rd Suite 3, #174
Ferndale, WA 98248

To: Compliance Attorney
Jonathan Kramer
Whitfield & Eddy, PLC
Email: Kramer@whitfieldlaw.com
& Certified Mail To:
317 6th Avenue, Suite 1200
Des Moines, IA 50309

Section II. Compliance Attorney Agreement

1. Appointment of Compliance Attorney and Compliance Attorney Fees. The Parties
appoint Jonathan Kramer PLC to perform the duties and obligations of Compliance
Attorney set forth herein. Jonathan Kramer accepts the appointment and agrees to
manage the shares described in Section I and held in escrow in accordance with
the terms contained herein. The fees for any activity taken by the Compliance
Attorney according to this Compliance Attorney Agreement will be charged at an
hourly rate of $300.00.
 
2. Compliance Description. The Compliance Attorney is retained by the
Intermediary and Advisor to ensure the continued cooperation of the Company in
matters related to the offering continuance and to ensure the Company has and
continues to perform all necessary items called for in the Offering Documents.
 
 
4

--------------------------------------------------------------------------------

 

3. Compliance Items. The Compliance Attorney will continue to monitor the
following items and the Company's performance of such items and issues
throughout the period of the offering until the equity Breakouts have been
completed and the last Warrant Series is exercised or expires:

Should the Company be out of compliance with any of the following:
 
 
a.
Failure to file a Registration with the US Securities Exchange Commission
("SEC") within the given time period, covering the shares described in Section
II.4, or any registration that may be necessary to continue the offer
contemplated herein, or; 2.1 of the MOT, within 6 months of the Closing.

 
b.
Failure to provide proper documents necessary to deposit certificates, file
continuing registrations to register any remaining common shares attached to the
Units or warrants to this offering, or;

 
c.
Failure to provide legal opinions as needed for shares, proper documents to
deposit certificates attached to this offering, or;

d.           Failure to provide legal opinions for shares attached to this
offering, or;
 
e.
Failure of the Company to communicate with the Advisor to provide quarterly
reports, resolve issues and maintain communications, or;

 
f.
Failure to maintain compliance with requirements set in the MOT, the USA or AMA,
or;

 
g.
Failure to be a going concern by the filing of a petition for bankruptcy, either
voluntarily or involuntarily, or, by the ceasing of business activity, or;

 
h.
Failure to meet the requirements of Section 4.10 and representations of the MOT,
or, any of the subsections thereof, or;

 
Should the Company Institute any of the following:
 
 
a.
Attempted cancellation of certificates attached to this offering to force
Breakup without the permission of the Investor(s), or;

 
b.
Institution of any suits to force a Breakup, or;

 
c.
Filing of any documents, statements, or, issuance of any press releases stating
that the transaction is canceled or dissolved when in fact it is not, or;

 
d.
Filing of any disclosure notifications or dissemination of any press release
stating that there is a negotiated settlement unless and until all deliveries
necessary to make such settlement effective have been made, then;

 
4. Compliance Attorney Action. Immediately upon discovery of an instance of
non-compliance, the Compliance Attorney shall demand, in writing, that the
Company come into compliance within 30 days of receiving notice. During the 30
day Notice Period, the Company must communicate a plan to the Investor(s),
through the Advisor with Notification to the Compliance Attorney, to rectify
such non-Compliant situation. If the Investors have not agreed to such plan, or
issued an extension to the Company, during the Notice Period, with notice to the
Compliance Attorney of same, the Compliance Attorney shall transfer the super
voting shares described in Section 1.2 to the Compliance Attorney. The
Compliance Attorney will then have the power to take any action set forth in
Section 4.5.3 of the MOT including:
 
 
a.
Transfer the Super Voting Shares to the Compliance Attorney, who may then;

 
b.
Institute a shareholder vote to:

     
 
i.
Force compliance through shareholder directives, or:

 
ii.
Call for a Shareholder vote to replace management should management be
obstructionist or if the actions of management continue to leave the Company out
of compliance, or:

 
iii.
Bring additional management or replace management as necessary to put a plan in
place to force compliance, then:.

 
 
c.
Once compliance is reestablished, the Super Voting Shares will be transferred to
the then Board of Directors in direct percentage proportion to the number of
board seats. The new holders will be required to produce additional stock powers
prior to this transference to reestablish the CAA escrow and Compliance Attorney
Agreement to continue the offering.

 
d.
Any legal expenses in addition to the original Escrow, Company Compliance
Agreement setup will be charged to, and be paid by, the Company.

 
 
5

--------------------------------------------------------------------------------

 
 
5. Continuity. Should the Original Shareholder(s) become incapacitated or
otherwise unable to perform in their capacity as an Insider, be replaced in the
Company or leave their position, the Compliance Attorney shall redistribute the
voting shares via transfer to the Board of Directors in percentage proportion to
the number of board seats and reestablish all proper stock powers to reestablish
the Compliance Agreement.
 
6. Notwithstanding any other provision of this agreement, it is the
understanding of the Parties that the Compliance Attorney has no independent
duty to investigate any compliance item or conformance therewith, but instead
shall rely on the other Parties for monitoring and raising compliance issues.
 
7. Notice Provisions. Initial Notice must be delivered, to the Company, Advisor
and the Compliance Attorney, through a certified letter addressed to the
addresses contained in the Compliance Agreement. Upon certification of delivery,
the Compliance Attorney will start the 30 day clock.
 
In concurrence with and acceptance of the foregoing, the parties have executed
this Agreement as of the Effective Date:

Spotlight Innovation, Inc. ("Company")

__________________________________
By: Cristopher Grunewald, its CEO
__________________________________
Jonathan Kramer, Compliance Attorney
 
Elco Securities Ltd.
__________________________________
Isaac Collie, Managing Director
 
Catwalk Capital, LLC., (the "Advisor")
__________________________________
J. Greig, Principal
 
 
6

--------------------------------------------------------------------------------