ISSUANCE AGREEMENT

 

ISSUANCE AGREEMENT (the “Agreement”) dated as of May 2, 2017, is entered into by
and among Sichenzia Ross Ference Kesner LLP (“SRFK”) and Orbital Tracking Corp.
(the “Company” and, collectively with SRFK, the “Parties”).

 

WHEREAS, the Company and SRFK entered into an engagement agreement dated January
23, 2015 (the “Engagement Agreement”), pursuant to which, among other things,
the Company agreed that, if it issued securities in a financing in which the
Company receives aggregate gross proceeds of at least $100,000 (a “Qualified
Financing”), SRFK would be entitled to receive, in addition to the securities
issued under the Engagement Agreement, such securities that are offered or
provided upon the same terms and conditions to the investors in the Qualified
Financing as if it had invested $70,000 in the Qualified Financing (the
“Anti-Dilution Securities”);

 

WHEREAS, SRFK previously waived its right to receive Anti-Dilution Securities in
connection with the Company’s October 2016 financing (the “2016 Financing”); and

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the
“Securities Act”), SRFK desires to exchange the Company’s further obligations to
issue Anti-Dilution Securities under the Engagement Agreement, and the Company
desires to issue the securities as set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the Parties agree as follows:

 

  1. Payment by the Company. The Company will issue to SRFK upon closing of its
offering of Series J Preferred Stock, shares of its newly designated Series K
Preferred Stock that shall be convertible into an aggregate of 978,561 shares of
common stock (the “Settlement Securities”).         2. Waiver and Release by
SRFK. SRFK hereby waives the further issuance of any Anti-Dilution Securities
under the Engagement Agreement. In addition to, and not in limitation of the
foregoing sentence, SRFK, on behalf of itself, its predecessors, successors,
direct and indirect parent companies, direct and indirect subsidiary companies,
companies under common control with any of the foregoing, affiliates and
assigns, and its and their past, present, and future officers, directors,
shareholders, interest holders, members, partners, attorneys, agents, employees,
managers, representatives, assigns, and successors in interest, and all persons
acting by, through, under, or in concert with them, and each of them, hereby
release and discharge the Company, together with their predecessors, successors,
direct and indirect parent companies, direct and indirect subsidiary companies,
companies under common control with any of the foregoing, affiliates and assigns
and its and their past, present, and future officers, directors, shareholders,
interest holders, members, partners, attorneys, agents, employees, managers,
representatives, assigns and successors in interest, and all persons acting by,
through, under or in concert with them, and each of them, from all known and
unknown charges, complaints, claims, grievances, liabilities, obligations,
promises, agreements, controversies, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts, penalties, fees, wages, medical costs,
pain and suffering, mental anguish, emotional distress, expenses (including
attorneys’ fees and costs actually incurred), and punitive damages, of any
nature whatsoever, known or unknown, which SRFK has, or may have had, against
the Company, whether or not apparent or yet to be discovered, or which may
hereafter develop, for any acts or omissions related to or arising from the
Engagement Agreement, including the issuance of any securities in connection
with the 2016 Financing.

 

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  3. Release by Company. The Company, on behalf of itself, its predecessors,
successors, direct and indirect parent companies, direct and indirect subsidiary
companies, companies under common control with any of the foregoing, affiliates
and assigns, and its and their past, present, and future officers, directors,
shareholders, interest holders, members, partners, attorneys, agents, employees,
managers, representatives, assigns, and successors in interest, and all persons
acting by, through, under, or in concert with them, and each of them, hereby
release and discharge SRFK, together with its predecessors, successors, direct
and indirect parent companies, direct and indirect subsidiary companies,
companies under common control with any of the foregoing, affiliates and assigns
and its and their past, present, and future officers, directors, shareholders,
interest holders, members, partners, attorneys, agents, employees, managers,
representatives, assigns and successors in interest, and all persons acting by,
through, under or in concert with them, and each of them, from all known and
unknown charges, complaints, claims, grievances, liabilities, obligations,
promises, agreements, controversies, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts, penalties, fees, wages, medical costs,
pain and suffering, mental anguish, emotional distress, expenses (including
attorneys’ fees and costs actually incurred), and punitive damages, of any
nature whatsoever, known or unknown, which he Company and such persons has, or
may have had, against SRFK and such persons, whether or not apparent or yet to
be discovered, or which may hereafter develop, for any acts or omissions related
to or arising from the Engagement Agreement.         4. Accredited Investor
Representation. SRFK represents and warrants that it is an “accredited
investor,” as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act, and it is able to bear the economic risk of an investment in
the Company’s securities.         5. Rule 144 Acknowledgments. Pursuant to Rule
144 promulgated by the Securities and Exchange Commission (the “Commission”)
pursuant to the Securities Act and the rules and regulations promulgated
thereunder as such Rule 144 may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule 144, the holding period of the Settlement Securities
tacks back to January 23, 2015, the date of the Engagement Agreement. The
Company agrees not to take a position contrary to this paragraph.         6.
Securities Law Exemptions. Assuming the accuracy of the representations and
warranties of SRFK contained herein, the offer and issuance by the Company of
the Settlement Securities is exempt from registration under the Securities Act.
The offer and issuance of the Settlement Securities is exempt from registration
under the Securities Act pursuant to the exemption provided by Section 3(a)(9)
thereof. The Company covenants and represents to SRFK that neither the Company
nor any of its subsidiaries has received, anticipates receiving, has any
agreement to receive or has been given any promise to receive any consideration
from SRFK or any other party in connection with the transactions contemplated by
this Agreement.         7. Agreement is Legally Binding. The Parties intend this
Agreement to be legally binding upon and shall inure to the benefit of each of
them and their respective successors, assigns, executors, administrators, heirs
and estates. Moreover, the persons and entities referred to in paragraph 2 and 3
above, but not a Party, are third-party beneficiaries of this Agreement.        
8. Entire Agreement. The recitals set forth at the beginning of this Agreement
are incorporated by reference and made a part of this Agreement. This Agreement
constitutes the entire agreement and understanding of the Parties and supersedes
all prior negotiations and/or agreements, proposed or otherwise, written or
oral, concerning the subject matter hereof. Furthermore, no modification of this
Agreement shall be binding unless in writing and signed by each of the parties
hereto.

 

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  9. New or Different Facts: No Effect. Except as provided herein, this
Agreement shall be, and remain, in effect despite any alleged breach of this
Agreement or the discovery or existence of any new or additional fact, or any
fact different from that which either Party now knows or believes to be true.
Notwithstanding the foregoing, nothing in this Agreement shall be construed as,
or constitute, a release of any Party’s rights to enforce the terms of this
Agreement.         10. Interpretation. Should any provision of this Agreement be
declared or be determined by any court to be illegal or invalid, the validity of
the remaining parts, terms or provisions shall not be affected thereby and said
illegal or invalid part, term or provision shall be deemed not to be a part of
this Agreement. The headings within this Agreement are purely for convenience
and are not to be used as an aid in interpretation. Moreover, this Agreement
shall not be construed against Party as the author or drafter of the Agreement.
        11. Governing Law and Choice of Forum. This Agreement, the construction,
interpretation, and enforcement hereof, and the rights of the Parties with
respect to all matters arising hereunder or related hereto shall be determined
under, governed by, and construed in accordance with the laws of the State of
New York, without regard to the principles of conflicts of laws. Any action to
enforce this Agreement shall be brought only in the Borough of Manhattan, New
York, New York.         12. Waiver and Reliance on Representations. The Company
has obtained independent legal counsel regarding the advisability of entry into
this Agreement and the matters herein. The Company specifically acknowledges
that members and attorneys associated with SRFK have previously assisted the
Company prior to the date hereof and as a result became creditors and security
holders of SRFK, and that Harvey Kesner, a member of SRFK, is the controlling
person of Quest Document Solutions LLC and Paradox Capital Partners, LLC. Such
persons may also directly or indirectly have an interest in the securities of
the Company as a result of the receipt of legal fees or otherwise, and that the
Company waives any and all conflicts with respect thereto, including any
appearance of conflict, that could exist or arise as a result of such
representation or ownership. The Parties represent and acknowledge that in
executing this Agreement they did not rely, and have not relied, upon any
representation or statement, whether oral or written, made by the other Party or
by that other Party’s agents, representatives or attorneys with regard to the
subject matter, basis or effect of this Agreement or otherwise.         13.
Counterparts. This Agreement may be executed by the Parties in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.         14. Authority to Execute
Agreement. By signing below, each Party warrants and represents that the person
signing this Agreement on its behalf has authority to bind that Party and that
the Party’s execution of this Agreement is not in violation of any By-law,
covenants and/or other restrictions placed upon them by their respective
entities.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.

 

ORBITAL TRACKING CORP.         By: /s/ David Phipps                   Name:
David Phipps   Title: Chief Executive Officer         SICHENZIA ROSS FERENCE
KESNER LLP         By: /s/ Harvey Kesner   Name: Harvey Kesner   Title: Partner
 

 

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