EXHIBIT 10.1

 

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Proposal: Placement Agreement

 

The Alternative Investment Store, division of Benjamin & Jerold Brokerage I,
LLC.

 

for

 

CannaPharmaRX, Inc

 

  

Prepared for: Gerald Crocker CEO & Gary Herick Director of Finance |
CannaPharmaRX, Inc. One Collins Drive, Salem Business Center, Carneys Point, NJ
08069-3640 | Phone: 720.939.1133 | Email: gherick@cpharmarx.com

Prepared by: Troy R Vanderburg Chief Executive Officer, Alternative Investment
Store division of Benjamin & Jerold Brokerage I, LLC located at: 80 Broad
Street, 6th Floor, New York, NY 10004.

Description: CannaPharmaRX, Inc. is seeking to raise up to $6,000,000 in
Convertible Notes from “Accredited Investors” adherent to a Private Placement
Memorandum under Rule 506 of the Securities Act of 1934. This capital placement
will be used to capitalize CannaPharmaRX, Inc. for the intended uses of
(1) pursuing the business plan and (2) for funds to acquire and operate the
“Ward Rd.” Pharmacy, and (3) for general working capital.

Executive Overview

The purpose of this proposal is to forge a strategic relationship between
CannaPharmaRX, Inc. and the Alternative Investment Store, whereby the
Alternative Investment Store will syndication, introduction, and capital raising
services to CannaPharmaRX, Inc. The Alternative Investment Store will act as a
introducing broker for CannaPharmaRX, Inc. and provide a best effort in
distributing the private offering to Registered Investment Advisors, Broker
Dealers and their Accredited Investors, Private Family Offices, Hedge Funds,
Private Equity Funds, and other Institutional Investors.

The Alternative Investment Store shall focus its efforts on providing
CannaPharmaRX, Inc. with three main services:

New Business Development: This includes all stages of the sales process from the
initial introduction until

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the subscription documents are signed. External sales professionals representing
the Alternative Investment Store and affiliates or partners of the Alternative
Investment Store will focus their prospecting efforts on Registered Investment
Advisor Firms, Broker Dealers, and Institutional Investors in markets identified
by the executive team of the Alternative Investment Store. Their activities will
consist of phone calls, webinars, advisor workshops and advisor/client private
workshops. The executive teams at both firms shall discuss the activity reports
at the discretion or request of CannaPharmaRX, Inc. executive leadership.

Financial Intermediary Relations: This service includes building and maintaining
relationships with staff members involved at every stage of the process. This
includes the research analysts who approve products to the, field consultants,
and senior advisors who work directly with clients and assist them with manager
selection.

Marketing Support: All support and services required to aid in the generation of
new business, including consulting with CannaPharmaRX, Inc. on the development
of marketing material such as presentations, brochures, video and white papers.
Most of these services are complimentary under our placement agreement; however,
the creation of video and content generation is provided at a nominal fee.

Sales and Marketing Strategy:

The external sales team of the Alternative Investment Store is expected to
implement the sales and marketing strategy developed by the executive team. Each
member of the external sales team is provided with lists of Registered
Investment Advisors and Registered Representatives who place their client’s
assets in alternative investments. Furthermore, each member has existing
relationships with Registered Investment Advisors and Registered Representatives
who have previously placed client assets in alternative investment
opportunities.

External sales professional’s contact Advisors in their territory to identify
which advisors work with accredited investors, how much money do they place in
alternatives per year and which alternatives are those advisors currently
investing. Based on these phone interviews, the Alternative Investment Store
creates a focus list of advisors who will be invited to an advisor workshop
series in which CannaPharmaRX, Inc. will be invited to speak.

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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While the external sales force is working on the advisor workshops, Chief
Executive Officer, Troy Vanderburg will be contacting the Chief Investment
Officers of private investment funds to schedule in-person visits for himself
and the executive team of CannaPharmaRX, Inc. The purpose behind this strategy
is to identify larger pools of investments of no less than $1 million.

At the advisor workshops, an executive member of CannaPharmaRX, Inc. will speak
to an audience of approximately 8-12 investment advisors. From this workshop,
the goal is to identify 2-3 advisors interested in having the executive team of
CannaPharmaRX, Inc. speak to their clients directly at private client workshops.

In addition to their efforts to drive advisors to the events, our external sales
team will be meeting with advisors within their territory on a regular basis.
While at their meeting, the external sales member will invite the advisor to
attend an upcoming conference call (schedule to be determined) in which an
executive member of CannaPharmaRX, Inc. will speak about the opportunity.

From these conference calls, the external sales members will identify those
advisors interested in speaking with CannaPharmaRX, Inc. directly. For those
advisors with the capacity to do greater than $2.0 million, we will suggest that
they fly into Colorado or New Jersey to meet with the executive team of
CannaPharmaRX, Inc. and complete further on site Due Diligence. The Alternative
Investment Store, and its affiliates, hereinafter referred to as “AIS” or the
“Consultant”, has been retained to serve as a marketing consultant to
CannaPharmaRX, Inc. (OTCBB Ticker GDHC—New Ticker Forthcoming) (the “Client” or
the “Company”), on a non-exclusive basis.

Time Frame: 12 Months. This agreement shall have a term of twelve months from
the date hereof.

Capital Raising Best Efforts: $6 Million.

Fee: 8% cash of all capital raised related in any way to the efforts of the
Alternative Investment Store or its subsidiaries plus additional compensation in
the form of Warrants or Common Stock as referenced immediately below, and in
Exhibit A.

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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1. Advisory Fee: AIS will charge a reduced monthly advisory fee and has agreed
to payment of $3500.00 for a period of 3 months— and 25,000 shares per month for
3 months commencing as of the date of this contract.

 

2. Capital Raising Fee: to include Wholesalers and Outside Broker Dealers:

For the purpose of clarity and to define the agreement as a whole,
CannaPharmaRX, Inc. agrees to pay Alternative Investment Store in the case of a
Non-Change of Control Transaction the following:

 

(i) For all Equity: a cash fee of eight percent (8%) of the total amount of all
equity (or debt) raised by Consultant in an initial financing transaction. If
the transaction is done in house, without the use of an outside Broker dealer,
the fee will be a cash fee of Five percent (5%) of the total amount of all
equity (or debt) raised by Consultant in an initial financing transaction.

In Addition:

 

(ii) Upon the execution of this agreement, 25,000 shares of newly issued
restricted rule 144 shares of Common Stock.

 

(iii) Warrants for 8% (If the transaction is done in house, without the use of
an outside Broker Dealer 5%) of the aggregate total raised— with an exercise
price of $2.00 per share, with each Warrant exercisable for five (5) years from
the date this agreement is executed, in the form of the Option Agreement annexed
as Exhibit A.

 

(iv) Follow on: a fee payable in cash or warrants (at the discretion of AIS) of
five percent (5%) of any additional equity and / or debt from the same or new
Prospect(s) raised by Consultant after closing of first transaction up to an
additional thirty six (36) month period.

Marketing: CannaPharmaRX, Inc. is given a commitment by Alternative Investment
Store not to charge an additional marketing participation fee. However,
CannaPharmaRX, Inc. may consider participation of approximately $3,000 per
quarter for events sponsorship related to its Candidates, Advisors and their
respective clients.

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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AIS agrees to make reasonable efforts to organize a meetings with Financial
Advisory Firms and Institutional Candidates. Client hereby agrees that in the
event it engages in a Business Opportunity with any Candidate, brought
specifically on or through the direct efforts of AIS and its affliates, Client
will pay a Transaction Fee to AIS according to the following paragraphs below.

(a) In connection with the agreement described in the Fee: section above, AIS
may, from time to time, bring the Company in contact with persons, whether
individuals or entities, that may be suitable candidates to purchase
substantially all of the stock or assets of the Company and/or such Subsidiary,
to have substantially all of its stock or assets purchased by the Company or
such Subsidiary, to merge with the Company or such Subsidiary, or to enter into
a joint venture or other transaction with the Company or such Subsidiary (each,
an “M&A Transaction”). If, during the term hereof, the Company or any of its
Subsidiaries enters into an agreement with any such persons or their affiliates,
or with any persons introduced to the Company or any of its Subsidiaries or
affiliates by any such persons or their affiliates, pursuant to which the
Company or any of its Subsidiaries enters into an M&A Transaction, or if the
Company or any of its Subsidiaries enters into an M&A Transaction with any of
the foregoing persons within one year following any termination of the term of
this agreement, the Company shall pay to the Consultant, in accordance with the
formula set forth below, compensation based on the aggregate value of the
consideration, whether in cash, securities, assumption of (or purchase subject
to) debt or liabilities (including, without limitation, indebtedness for
borrowed money, pension liabilities and guarantees), or other property,
obligations or services, paid or payable, directly or indirectly (in escrow or
otherwise), or otherwise assumed in connection with such M&A Transaction (the
“Consideration”).

The compensation to be paid shall be paid upon the closing of the M&A
Transaction (except that, if any part of the Consideration is in the form of
contingent payments to be calculated by reference to uncertain future
occurrences, such as future financial or business performance, then the portion
of the fees of the Consultant relating to such part of the Consideration shall
be payable at the earlier of (i) the receipt or payment of such Consideration or
(ii) the time that the amount of such Consideration can be determined), by
certified check or wire transfer of immediately available funds, in the
following amounts: 10% of the first $5 million of the Consideration; 5% of the
Consideration in excess of $5 million up to $ 20 million and 2% over $20 million
and 1% over $100,000,000.

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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`For the purposes hereof, with respect to any person or entity, the term
“Subsidiary” shall mean any corporation, limited liability company or other
entity of which more than 20% of the total voting power of shares of stock (or
equivalent ownership or controlling interest) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is, at the time, owned or controlled, directly or indirectly,
by that person or entity or one or more subsidiaries of that person or entity,
or a combination thereof, either on or after the date hereof.

Syndication Service.

The Consultant’s syndication services will begin with distribution of Company
corporate imaging and research, in the sponsorship of Company presentations,
through Consultant’s membership in, or association with, several investment
banking or investor related organizations including:

Each association represents substantial numbers of industry contacts,
institutions, brokers, analysts and investors. The Consultant will serve as
“Company Sponsor” to these organizations, and at the request of the Company,
will be scheduled and guided through the process of presentation and follow-up.
We may also, from time to time, organize and conduct traditional road shows,
broker luncheons, and/or investor presentations, and may further utilize certain
technologies including virtual road shows, teleconferencing for added
convenience and ability to reach large audiences.

The syndication services described in this section will typically involve
additional fees, costs and/or expenses on behalf of the Company for
participation in such events, or to engage services from outside vendors
introduced by us. Compensation under this Agreement is for the Consultant’s
time, contacts, memberships, and marketing services provided. Compensation under
this Agreement is not inclusive of conference fees, T & E expenses, meals,
lodging, printing or publication costs, postage, or outside service provider’s
fees. Any such fees or expenses shall only be incurred at the written request of
the Company, on a case-by-case basis, and shall be paid by the Company, or
reimbursed to Consultant by the Company.

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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Available Time.

The Consultant shall make available such time as it, in its sole discretion,
shall deem appropriate for the performance of its obligations under this
agreement and may, in certain circumstances, be entitled to additional
compensation in connection therewith.

Relationship.

Nothing herein shall constitute the Consultant as an employee or agent of the
Company, except to such extent as might hereinafter agreed upon for a particular
purpose. Except as might hereinafter be expressly agreed, the Consultant shall
not have the authority to obligate or commit the Company in any manner
whatsoever.

Entire Agreement.

This agreement, including the schedules and exhibits hereto, contains the entire
agreement of the parties and supersedes all other agreements and understandings,
oral or written, with respect to the matters contained herein.

No Waiver.

No act, omission or delay by the Consultant shall constitute a waiver of its
rights and remedies hereunder or otherwise. No single or partial waiver by the
Consultant of any default, right or remedy that it may have shall operate as a
waiver of any other default, right or remedy, or of the same default, right or
remedy on a future occasion.

Assignment.

This agreement shall be binding upon and inure to the benefit of the respective
heirs, representatives, successors and assigns of the parties hereto, provided;
however, that this agreement may not be assigned by the Company without the
prior written consent of the Consultant; provided, further, however, that the

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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Consultant may assign its rights and delegate its duties under this agreement to
any affiliate of the Consultant without the consent of the Company. As used in
the preceding sentence, the term “affiliate” shall have the meaning set forth in
Rule 12b-2 of the General Rules and Regulations promulgated under the Exchange
Act.

Waiver of Jury Trial and Setoff; Consent to Jurisdiction; Etc.

(a) In any litigation in any court with respect to, in connection with, or
arising out of this agreement or any instrument or document delivered pursuant
to this agreement, or the validity, protection, interpretation, collection or
enforcement hereof or thereof, or any other claim or dispute howsoever arising,
between the Company, on the one hand, and the Consultant on the other hand, the
Company, to the fullest extent it may legally do so, (i) waives the right to
interpose any setoff, recoupment, counterclaim or cross-claim in connection with
any such litigation, irrespective of the nature of such setoff, recoupment,
counterclaim or cross-claim, unless such setoff, recoupment, counterclaim or
cross-claim could not, by reason of any applicable federal or state procedural
laws, be interposed, pleaded or alleged in any other action and (ii) waives
trial by jury in connection with any such litigation and any right it may have
to claim or recover in any such litigation any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. The company agrees that this section 9(a) is a specific and material
aspect of this agreement and acknowledges that the consultant would not enter
into this agreement if this section 9(a) were not part of this agreement.

(b) The Company hereby irrevocably consents to the exclusive jurisdiction of any
State or Federal Court located within the County of Maricopa, State of Arizona,
in connection with any action or proceeding arising out of or relating to this
agreement or any document or instrument delivered pursuant to this agreement or
otherwise. In any such litigation, the Company waives, to the fullest extent it
may effectively do so, personal service of any summons, complaint or other
process and agrees that the service thereof may be made by certified or
registered mail directed to the Company, at its address on the first page
hereof. The Company hereby waives, to the fullest extent it may effectively do
so, the defenses of forum non conveniens and improper venue.

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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Governing Law.

This agreement shall be deemed to be a contract made under the laws of the State
of Arizona and for all purposes shall be construed in accordance with the laws
of said State.

Indemnity.

The Company agrees to indemnify the Consultant, its affiliates and all related
persons, in accordance with the indemnification rider annexed hereto as Schedule
A, the provisions of which are incorporated herein in their entirety.

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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SCHEDULE A

INDEMNIFICATION

Recognizing that matters of the type contemplated in this engagement sometimes
result in litigation and that our role is marketing, the Company agrees to
indemnify and hold harmless AIS, its affiliates and their respective officers,
directors, employees, agents and controlling persons (collectively, the
“Indemnified Parties”), from and against any losses, claims, damages and
liabilities, joint or several, related to or arising in any manner out of any
transaction, financing, proposal or any other matter (collectively, the
“Matters”) contemplated by the engagement of AIS hereunder, and will promptly
reimburse the Indemnified Parties for all expenses (including fees and expenses
of legal counsel) as incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim related to or
arising in any manner out of any Matter contemplated by the engagement of AIS
hereunder, or any action or proceeding arising therefrom (collectively,
“Proceedings”), whether or not such Indemnified Party is a formal party to any
such Proceeding. Notwithstanding the foregoing, the Company shall not be liable
in respect of any losses, claims, damages, liabilities or expenses that a court
of competent jurisdiction shall have determined by final judgment resulted
solely from the gross negligence or willful misconduct of an Indemnified Party.
The Company further agrees that it will not, without the prior written consent
of AIS, settle, compromise or consent to the entry of any judgment in any
pending or threatened Proceeding in respect of which indemnification may be
sought hereunder (whether or not AIS or any Indemnified Party is an actual or
potential party to such Proceeding), unless such settlement, compromise or
consent includes an unconditional release of AIS and each other Indemnified
Party hereunder from all liability arising out of such Proceeding. In addition,
AIS agrees that it will not settle, compromise or consent to the entry of any
judgment in any pending or threatened Proceeding in respect of which
indemnification is sought under this Agreement, without the prior written
consent of the Company, which consent shall not be unreasonably withheld,
delayed or conditioned.

The Company agrees that if any indemnification or reimbursement sought pursuant
to this letter is held by a court for any reason to not be available to any
Indemnified Party or insufficient to hold it harmless as and to the extent
contemplated by this letter, then the Company shall contribute to the amount
paid or payable by such Indemnified Party in respect of losses, claims, damages
and liabilities in

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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such proportion as is appropriate to reflect the relative benefits to the
Company and its stockholders on the one hand, and AIS on the other, in
connection with the Matters to which such indemnification or reimbursement
relates or, if such allocation is not permitted by applicable law, not only such
relative benefits but also the relative faults of such parties to the Company
and/or its stockholders and to AIS with respect to AIS’s engagement shall be
deemed to be in the same proportion as (i) the total value paid or received or
to be paid or received by the Company and/or its stockholders pursuant to the
Matters (whether or not consummated) for which AIS is engaged to render
financial marketing services bears to (ii) the fees paid to AIS in connection
with such engagement. In no event shall the Indemnified Parties contribute or
otherwise be liable for an amount in excess of the aggregate amount of fees
actually received by AIS pursuant to such engagement (excluding amounts received
by AIS as reimbursement of expenses).

The indemnity, reimbursement and contribution provisions set forth herein shall
remain operative and in full force and effect regardless of (i) any withdrawal,
termination or consummation of or failure to initiate or consummate any Matter
referred to herein, (ii) any investigation made by or on behalf of any party
hereto or any person controlling (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Exchange Act) any party
hereto, (iii) any termination or the completion or expiration of this letter or
AIS’s engagement and (iv) whether or not AIS shall, or shall not be called upon
to, render any formal or informal advice in the course of such engagement.

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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EXHIBIT A

OPTION AGREEMENT

OPTION AGREEMENT (this “Agreement”), dated December 11th 2014, between
Alternative Investment Store a division of Benjamin & Jerold Brokerage I, LLC
(the “Grantee”), and CannaPharmaRX, Inc.

One Collins Drive, Salem Business Center, Carneys Point, NJ 08069-3640 a
Delaware Corporation.

(OTCBB GDHC New Ticker Forthcoming) (the “Company”).

WHEREAS, the Company has authorized 100,000,000 shares and has issued and
outstanding 16,600,000 shares of common stock, par value [$.01] per share (the
“Common Stock”), representing all of the Company’s issued and outstanding shares
of capital stock as of the Date of Grant (as hereinafter defined); and

WHEREAS, concurrently herewith, the Grantee and the Company are entering into a
Financial Agreement dated the date hereof (the “Agreement”) whereby the Grantee
agrees to provide to the Company and its subsidiaries the aforementioned
services in accordance with the terms and provisions, and subject to the
conditions, set forth above; and

WHEREAS, as partial consideration for the Grantee’s provision of services under
the Consulting Agreement, the Company desires to grant to the Grantee, and the
Grantee desires to acquire from the Company, an option to purchase 8% of the
Value of Capital Raised in shares of Common Stock and shares, upon and subject
to the terms and conditions hereinafter set forth.

NOW THEREFORE, in consideration of the agreements set forth herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

Grant of Option. The Company hereby grants to the Grantee a Warrant (the
“Option”) to 8% of the Value of Capital of Common Stock directly from the
issuer. Such shares, including any shares issued pursuant to Section 5 hereof,
are referred to as the “Option Shares”) as follows (the “Exercise Price”) of
$2.00 per share with each option exercisable for five (5) years from the date
this agreement is executed.

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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1. Term of Option. The Option is granted as of the date first above written
(sometimes hereinafter referred to as the “Date of Grant”), and will terminate
and expire, to the extent not previously exercised in accordance with the terms
of this Agreement, on the third anniversary of the Date of Grant.

 

2. Option Exercisable in Whole or in Part. The Option may be exercised as to all
or part of the shares of Common Stock as to which it is exercisable, but not for
a fractional share.

 

3. Exercise of Option.

(a) The Grantee may exercise the Option with respect to all or any part of the
number of Option Shares by giving the Company written notice of intent to
exercise. The notice of exercise shall specify the number of Option Shares as to
which the Option is to be exercised and the date of exercise thereof, which date
shall be at least one business day after the giving of such notice.

(b) On the exercise date specified in the Grantee’s notice, the Company shall
cause to be delivered to the Grantee evidence of ownership of the Option Shares
then being purchased upon full payment for such Option Shares as provided in
Section 3(e) below and shall promptly record such Option Shares on its official
records as having been issued to the Grantee. Pursuant to Section 9 hereof, the
Company may require before issuing such evidence of ownership that, at the time
of exercise, the Grantee deliver an investment representation.

(c) In the event that the Grantee exercises the Option for a number of Option
Shares less than the total number of Option Shares that the Grantee has a right
to purchase under this Agreement, then the Company shall, if so requested by the
Grantee, issue to the Grantee an Option identical in form to this Option but for
a number of Option Shares that shall be equivalent to the total number of Option
Shares covered by this Agreement less the number of Option Shares so purchased.

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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(d) If the Grantee fails to pay for any of the Option Shares specified in any
notice of exercise or fails to accept delivery thereof, such Option Shares shall
not be issued by the Company and shall remain subject to subsequent exercises by
the Grantee pursuant to the terms hereof. The date specified in the Grantee’s
notice as the date of exercise shall be deemed the date of exercise of the
Option, provided that payment (in accordance with Section 4 below) for the
Option Shares to be purchased upon such exercise shall have been received by
such date.

(e) Full payment by the Grantee of the Exercise Price for the number of Option
Shares purchased shall be made on or before the exercise date specified in the
notice of exercise, by delivery of, at the option of the Grantee, cash or a
full-recourse promissory note (the “Note”) in an amount equal to the Exercise
Price for such Option Shares. The Note shall have a maturity date (the “Maturity
Date”) of the three-year anniversary of the execution and delivery thereof.
During the term of the Note, interest (which shall accrue at a rate of 8% per
annum) shall be payable in arrears, on the last day of March, November,
September and December or, if such day is not a business day, on the next
succeeding business day. Principal and all accrued interest shall be paid on the
Maturity Date.

 

4. Payments; Cashless Exercise.

(a) Payment may be made either in (i) cash or by certified or official bank
check or checks payable to the order of the Company equal to the applicable
aggregate Exercise Price, (ii) by delivery of the Note, or (iii) by a
combination of any of the foregoing methods for the number of Common Shares
specified in such form, as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the Grantee
per the terms of this Agreement) and the Grantee shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.

(b) In the circumstances set forth herein, if the Fair Market Value (as
hereinafter defined) of one share of Common Stock is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of exercising the
Option for cash the Grantee may elect to receive shares equal to the value (as
determined below) of the Option (or the portion thereof being cancelled) by
surrender of the Option at the principal office of the Company in which event
the Company shall issue to the Grantee a number of

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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shares of Common Stock calculated, as of the date of exercise, using the
following formula:

X=Y (A-B)

A

Where:

X= the number of shares of Common Stock to be issued to the Grantee

Y= the number of shares of Common Stock purchasable under the Option or, if only
a portion of the Option is being exercised, the portion of the Option being
exercised (at the date of such calculation)

A= the Fair Market Value of one share of the Company’s Common Stock (at the date
of such calculation)

B= the Exercise Price (as adjusted to the date of such calculation)

“Fair Market Value” of a share of Common Stock as of a particular date (the
“Determination Date”) shall mean the Fair Market Value of a share of the
Company’s Common Stock. Fair Market Value of a share of Common Stock as of a
Determination Date shall mean:

(i) if the Company’s Common Stock is traded on an exchange or is quoted on the
National Association of Securities Dealers, Inc. Automated Quotation (“NASDAQ”)
Global Market or the NASDAQ Capital Market, then the closing or last sale price,
respectively, reported for the last business day immediately preceding the
Determination Date;

(ii) if the Company’s Common Stock is not traded on an exchange or on the NASDAQ
Global Market or the NASDAQ Capital Market but is traded in the over-the-counter
market, then the closing bid price reported for the last business day
immediately preceding the Determination Date;

(iii) except as provided in clause (d) below, if the Company’s Common Stock is
not publicly traded, then as the Grantee and the Company agree or in the absence
of agreement by arbitration in accordance with the rules then standing of the
American Arbitration Association, before a single arbitrator to be chosen from a
panel of persons qualified by education and training to pass on the matter to be
decided; or

 

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(iv) if the Determination Date is the date of a liquidation, dissolution or
winding up, or any event deemed to be a liquidation, dissolution or winding up
pursuant to the Company’s charter, then all amounts to be payable per share to
holders of the Common Stock pursuant to the charter in the event of such
liquidation, dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the charter, assuming
for the purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Options held by the Grantee are outstanding
at the Determination Date.

 

5. Adjustment; Recapitalization, etc.

(a) If the Company shall (i) declare a dividend on its outstanding capital stock
in shares of its capital stock, (ii) subdivide its outstanding capital stock
into a greater number of shares, (iii) combine its outstanding capital stock
into a smaller number of shares or (iv) issue any shares of its capital stock by
reclassification thereof (including any such reclassification in connection with
a consolidation or merger in which it is the continuing corporation), then in
each such case the total number of shares of Common Stock that may be issued
under this Agreement (and the Exercise Price) shall be proportionately adjusted
by the Company. Such adjustment shall be made successively whenever such events
shall occur. The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.

(b) If the Company merges or consolidates with one or more companies, then from
and after the effective date of such merger or consolidation, upon exercise of
the Option theretofore granted, (i) the Grantee shall be entitled to purchase
under the Option, in lieu of the number of shares of Common Stock as to which
the Option shall then be exercisable but on the same terms and conditions of
exercise set forth in the Option, the number of shares of Common Stock and/or
other securities or property (including cash) to which the Grantee would have
been entitled pursuant to the terms of the agreement of merger or

 

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consolidation if, immediately prior to such merger or consolidation, the Grantee
had been the holder of record of the total number of shares of Common Stock
receivable upon exercise of the Option (whether or not then exercisable) and
(ii) the Exercise Price shall be proportionately adjusted by the Company (to
reflect any change in the number of securities into which the Option is
converted), without a change to the aggregate Exercise Price payable for all of
the Option Shares.

(c) All calculations under this Section 5 shall be made to the nearest cent or
to the nearest one-hundredth of a share, as the case may be. The number of
shares of capital stock outstanding shall be deemed to include the aggregate
maximum number of shares issuable upon the exercise of options, rights or
warrants and upon the conversion or exchange of convertible or exchangeable
securities.

(d) Whenever there shall be an adjustment as provided in this Section 5, then
the Company shall within 10 days thereafter cause written notice thereof to be
sent by registered mail, postage prepaid, to the Grantee, which notice shall be
accompanied by an officer’s certificate setting forth the number of Option
Shares issuable and the Exercise Price thereof after such adjustment and setting
forth a brief statement of the facts requiring such adjustment and the
computation thereof.

(e) The Company shall not be required to issue fractions of shares of capital
stock of the Company upon the exercise of this Option. If any fraction of a
shares of capital stock would be issuable on the exercise of this Option (or
specified portions thereof), the Company shall purchase such fraction for an
amount in cash equal to the same fraction of the Current Market Price of such
capital stock on the date of exercise of this Option.

6. Report or Certificate as to Adjustments. In each case of any adjustment or
readjustment in the Option Shares issuable upon the exercise of the Option, the
Company at its expense will promptly deliver a certificate of its Chief
Financial Officer showing in reasonable detail the computation of such
adjustment or readjustment in accordance with the terms of this Agreement.

7. Notices of Corporate Action. In the event of:

(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of

 

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determining the holders thereof who are entitled to receive any dividend or
other distribution, or any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any other right, or

(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, any consolidation or
merger involving the Company and any other Person or any transfer of all or
substantially all the assets of the Company to any other Person, or

(c) any voluntary or involuntary dissolution, liquidation or winding-up of the
Company, or

(d) any plan or proposal by the Company to register any class of its shares of
Common Stock with the Commission, then the Company shall deliver to the Grantee
a notice specifying (i) the date or expected date on which any such record is to
be taken for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right, or (ii) the date or
expected date on which any such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place and the time, if any such time is to be fixed, as of
which the Grantee shall be entitled to exchange the Option Shares for the
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall be furnished at least
30 days prior to the date therein specified.

 

8. Registration Rights.

8.1 Piggyback Registration. If the Company at any time proposes to register any
of its securities under the Securities Act for sale to the public, whether for
its own account or for the account of other security holders or both (except
with respect to registration statements on Forms S-4, S-8 or another form not
available for registering the Registrable Stock, as hereinafter defined, for
sale to the public), each such time it will give written notice to all holders
of outstanding Registrable Stock of its intention so to do. Upon the written
request of any such holder, received by the Company within 30 days after the
giving of any such notice by the Company, to register any of its Registrable
Stock, the Company will cause the Registrable Stock as to which registration
shall have been so requested to be included in the securities to

 

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be covered by the registration statement proposed to be filed by the Company,
all to the extent requisite to permit the sale or other disposition by the
holder (in accordance with its written request) of such Registrable Stock so
registered. In the event that any registration pursuant to this Section 8.1
shall be, in whole or in part, an underwritten public offering of Common Stock
by the Company, the number of shares of Registrable Stock to be included in such
an underwriting shall be reduced (pro rata among the requesting holders and any
other holders of Common Stock who are registering such Common Stock pursuant to
registration rights granted prior to the date hereof, based upon the number of
shares each requesting holder and each such other holder has proposed to include
in such registration) if and to the extent that the managing underwriter shall
be of the opinion that such inclusion would adversely affect the marketing of
the securities to be sold by the Company therein; provided, however, that the
Company shall cause all of the Registrable Stock of any requesting holder to be
registered before causing any Common Stock not subject to registration rights
granted prior to the date hereof to be registered. Notwithstanding the foregoing
provisions, the Company may withdraw any registration statement referred to in
this Section 8.1 without thereby incurring any liability to the holders of
Registrable Stock. The Company shall be obligated to register Registrable Stock
under this Section 8.1 an unlimited number of times; provided, however, that
such obligation shall be deemed satisfied only when a registration statement
covering all shares of Registrable Stock specified in written requests received
as aforesaid, for sale in accordance with the method of disposition specified by
the requesting holders, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, all such shares
shall have been sold pursuant thereto. For purposes of this Agreement,
“Registrable Stock” shall mean all of the Option Shares, and any and all other
shares of Common Stock held by or issuable to Grantee including, without
limitation, any Option Shares issuable (but not yet issued) upon exercise of
this Option, excluding Option Shares that (i) have been registered under the
Securities Act pursuant to an effective registration statement filed thereunder
and disposed of in accordance with the registration statement covering them,
(ii) have been publicly sold pursuant to Rule 144 under the Securities Act, or
(iii) are otherwise publicly tradable, without registration, pursuant to any
other applicable exemption from registration under the Securities Act.

8.2 Expenses. All expenses incurred by the Company’s in complying with
Section 8.1, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, fees and expenses (including counsel fees) incurred
in

 

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connection with complying with state securities or “blue sky” laws, fees of the
securities exchange upon which the Common Stock is then listed, transfer taxes,
fees of transfer agents and registrars, costs of any insurance which might be
obtained, and the reasonable fees and disbursements of one counsel to the
sellers of Registrable Stock, but excluding any Selling Expenses (as defined
below), are called “Registration Expenses.” All underwriting discounts and
selling commissions applicable to the sale of Registrable Stock are called
“Selling Expenses.”

The Company shall pay all Registration Expenses in connection with each
registration statement under Section 8.1. All Selling Expenses in connection
with each registration statement under Section 8.1 shall be borne by the
participating sellers in proportion to the number of shares sold by each, or by
such participating sellers, other than the Company (except to the extent the
Company shall be a seller), as they may agree.

 

8.3 Indemnification and Contribution.

(a) In the event of a registration of any of the Registrable Stock under the
Securities Act pursuant to Section 8.1, the Company will indemnify and hold
harmless each seller of such Registrable Stock thereunder, its officers and
directors, each underwriter of such Registrable Stock thereunder and each other
person, if any, who controls such seller or underwriter within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such seller, officer, director, underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
Registrable Stock was registered under the Securities Act pursuant to
Section 8.1, any preliminary prospectus or final prospectus contained therein,
or any amendment or supplement thereof, (ii) any blue sky application or other
document executed by the Company specifically for that purpose or based upon
written information furnished by the Company filed in any state or other
jurisdiction in order to qualify any or all of the Registrable Stock under the
securities laws thereof (any such application, document or information herein
called a “Blue Sky Application”), (iii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, (iv) any violation by the Company or its
agents of any rule or regulation

 

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promulgated under the Securities Act applicable to the Company or its agents and
relating to action or inaction required of the Company in connection with such
registration, or (v) any failure to register or qualify the Registrable Stock in
any state where the Company or its agents has affirmatively undertaken or agreed
in writing that the Company (the undertaking of any underwriter chosen by the
Company being attributed to the Company) will undertake such registration or
qualification on the seller’s behalf (provided that in such instance the Company
shall not be so liable if it has undertaken its best efforts to so register or
qualify the Registrable Stock) and will reimburse each such seller, and such
officer and director, each such underwriter and each such controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by any seller
of Registered Stock, any such underwriter or any such controlling person in
writing specifically for use in such registration statement or prospectus.

(b) In the event of a registration of any of the Registrable Stock under the
Securities Act pursuant to Section 8.1, each seller of such Registrable Stock
thereunder, severally and not jointly, will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of the
Securities Act, each officer of the Company who signs the registration
statement, each director of the Company, each other seller of Registrable Stock,
each underwriter and each person who controls any underwriter within the meaning
of the Securities Act, against all losses, claims, damages or liabilities, joint
or several, to which the Company or such officer, director, other seller,
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration statement
under which such Registrable Stock was registered under the Securities Act
pursuant to Section 8.1, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or any Blue Sky
Application or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse the Company and
each such officer, director, other seller, underwriter and controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss,

 

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claim, damage, liability or action; provided, however, that such seller will be
liable hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement or prospectus; and provided, further, however, that the
liability of each seller hereunder shall be limited to the proportion of any
such loss, claim, damage, liability or expense which is equal to the proportion
that the public offering price of the shares sold by such seller under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not in any event to exceed the proceeds received
by such seller from the sale of Registrable Stock covered by such registration
statement. Not in limitation of the foregoing, it is understood and agreed that
the indemnification obligations of any seller hereunder pursuant to any
underwriting agreement entered into in connection herewith shall be limited to
the obligations contained in this paragraph (b).

(c) Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 8.3 and shall only relieve
it from any liability which it may have to such indemnified party under this
Section 8.3 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided,
however, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed

 

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to conflict with the interests of the indemnifying party, the indemnified party
shall have the right to select a separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred.

(d) In order to provide for just and equitable contribution to joint liability
under the Securities Act in any case in which either (i) any holder of
Registrable Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 8.3 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 8.3 provides
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this
Section 8.3; then, and in each such case, the Company and such holder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportions so that such
holder is responsible for the portion represented by the percentage that the
public offering price of its Registrable Stock offered by the registration
statement bears to the public offering price of all securities offered by such
registration statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the public offering price of all
such Registrable Stock offered by it pursuant to such registration statement;
and (B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.

(e) The indemnities provided in this Section 8.3 shall survive the transfer of
any Registrable Stock by such holder.

9. Requirements of Law. The Company shall not be required to sell or issue any
Option Shares upon the exercise of the Option if the issuance of such Option
Shares shall constitute a violation by the Grantee or the Company of any
provision of any law, statute, or regulation of any governmental authority
whether it be Federal or State. Unless a registration statement is in effect
under the Securities Act with

 

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respect to the Option Shares covered by this Agreement, the Company shall not be
required to issue Option Shares upon exercise of the Option unless (i) the
Company has received evidence reasonably satisfactory to it to the effect that
the Grantee is acquiring such Option Shares for investment and not with a view
to the distribution thereof; or (ii) an opinion of Troutman Sanders LLP or such
other counsel reasonably acceptable to the Company has been received by the
Company, in a form and substance reasonably acceptable to the Company, to the
effect that a registration statement under the Securities Act is not required
for the issuance of the Option Shares. In the event the Option Shares issuable
upon exercise of the Option are not registered under the Securities Act, the
Company may imprint on any evidence of ownership of the Option Shares the
following legend or any other legend that counsel for the Company considers
necessary or advisable to comply with the Securities Act:

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
ACT.”

Except as otherwise provided in Section 8 hereof: (i) the Company may, but in no
event shall be obligated to, register any securities issuable upon the exercise
of the Option pursuant to the Securities Act or any state securities laws and,
in the event any shares are so registered, the Company may remove any legend on
certificates representing such shares; and (ii) the Company shall not be
obligated to take any affirmative action in order to cause the exercise of the
Option or the issuance of Option Shares pursuant thereto to comply with any law
or regulation of governmental authority.

10. Representations and Warranties of the Company. Company represents and
warrants as follows:

(a) The Company is a [corporation] duly organized, validly existing and in good
standing under the laws of the State of Delaware;

(b) Upon the delivery and payment for the Option Shares, as provided in this
Agreement, the Option Shares will be duly authorized, validly issued and
non-assessable, and none of the Option Shares will be issued in violation of the
preemptive rights of any member of the Company, and the Company has reserved
sufficient Option Shares for issuance hereunder; and

 

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(c) This Agreement has been duly authorized, executed and delivered by the
Company.

The foregoing representations and warranties shall survive and remain in full
force and effect after the date hereof and shall not affect the validity or
enforceability of any representations, warranties and agreements made by the
Company herein.

11. Reservation of Stock, etc. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of the Options,
the number of Option Shares from time to time issuable upon the exercise of the
Option. All such securities shall be duly authorized and, when issued upon such
exercise or purchase, as the case may be, shall be validly issued and, in the
case of shares, fully paid and non-assessable with no liability on the part of
the holders thereof.

12. Rights as Stockholder. The Grantee shall not have any rights of a
stockholder of the Company with respect to Option Shares subject to this
Agreement, until, after proper exercise of the Option, such Option Shares have
been recorded on the Company’s official records as having been issued or
transferred to the party exercising the Option. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
shares are recorded as issued or transferred (to the party exercising the
Option) in the Company’s official records, except as provided in Section 5.

13. Certain Definitions. As used herein, unless the context otherwise requires
the following terms have the following respective meanings: (i) “Commission”
shall mean the Securities and Exchange Commission or any other Federal agency at
the time administering the Securities Act; (ii) “Exchange Act” shall mean the
Securities Exchange Act of 1934, or any similar Federal statute, and the rules
and regulations of the Commission there under, all as the same shall be in
effect at the time; (iii) “Person” shall mean a corporation, an association, a
partnership, an organization or business, an individual, a government or
political subdivision thereof or a governmental agency; (iv) “Securities Act”
shall mean the Securities Act of 1933, or any similar Federal statute on the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time; and (v) the term “affiliate” shall have the meaning set
forth in Rule 12b-2 of the General Rules and Regulations promulgated under the
Exchange Act, as amended.

 

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14. Miscellaneous.

(a) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Arizona without regard to principles
of conflicts or choice of law (or any other law that would make any substantive
laws of any state other than the State of Arizona (applicable hereto).

(b) Waiver of Jury Trial and Setoff; Consent to Jurisdiction; Etc.

(i) In any litigation in any court with respect to, in connection with, or
arising out of this Agreement or any instrument or document delivered pursuant
to this Agreement, or the validity, protection, interpretation, collection or
enforcement hereof or thereof, or any other claim or dispute howsoever arising,
between the Company and the Grantee, the Company, to the fullest extent it may
legally do so,

(i) waives the right to interpose any setoff, recoupment, counterclaim or
cross-claim in connection with any such litigation, irrespective of the nature
of such setoff, recoupment, counterclaim or cross-claim, unless such setoff,
recoupment, counterclaim or cross-claim could not, by reason of any applicable
federal or state procedural laws, be interposed, pleaded or alleged in any other
action and (ii) WAIVES TRIAL BY JURY IN CONNECTION WITH ANY SUCH LITIGATION AND
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. THE COMPANY AGREES THAT THIS SECTION 14(b) IS A
SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGE THAT THE GRANTEE
WOULD NOT ENTER THIS AGREEMENT OR THE TRANSACTIONS OF WHICH THIS AGREEMENT IS A
PART IF THIS SECTION 14(b) WERE NOT PART OF THIS AGREEMENT.

(ii) The Company hereby irrevocably consents to the exclusive jurisdiction of
any State or Federal Court located within the County of Maricopa, State of
Arizona, in connection with any action or proceeding

 

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Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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arising out of or relating to this Agreement or any document or instrument
delivered pursuant to this Agreement or otherwise. In any such litigation, the
Company waives, to the fullest extent it may effectively do so, personal service
of any summons, complaint or other process and agrees that the service thereof
may be made by certified or registered mail directed to the Company at its
address for notice determined in accordance with Section 14(e) hereof. The
Company hereby waives, to the fullest extent it may effectively do so, the
defenses of forum non conveniens and improper venue.

(c) Expenses. The Company agrees to pay or reimburse within 30 days of demand
therefore by the Grantee any and all reasonable out-of-pocket costs and expenses
incurred by the Grantee, whether directly or indirectly, in connection with the
enforcement and adjudication of this Agreement, the Option or rights created
under any documents executed in connection herewith. The Grantee shall endeavor
to provide reasonable documentation in connection with any demand for payment
under this Section.

(d) Admissibility of the Agreement. The Company agrees that any copy of this
Agreement signed by the Company and transmitted by tele-copier for delivery to
the Grantee shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence.

(e) Address for Notices. Any notice or other communication under the provisions
of this Agreement shall be given in writing and delivered in person, by
reputable overnight courier or delivery service, by facsimile machine (receipt
confirmed) or by registered or certified mail, return receipt requested,
directed to its addresses set forth below (or to any new address of which either
party hereto shall have informed the other by the giving of notice in the manner
provided herein):

 

In the case of the Grantee:    Alternative Investment Store, LLC    Division of
Benjamin & Jerold Brokerage I, LLC    Attention: Terry Dolan    80 Broad Street,
5th Floor, #526    New York, New York 85203

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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In the case of the Company:    CannaPharmaRX, Inc.    Attention: Gary Herick   
One Collins Drive,    Salem Business Center,    Carneys Point, NJ 08069

(f) Amendments and Modification. No provision hereof shall be modified, altered,
waived or limited except by written instrument expressly referring to this
Agreement and to such provision, and executed by the parties hereto.

(g) Counterparts. This Agreement may be executed by the parties hereto
individually or in any combination, in one or more counterparts, each of which
shall be an original and all of which shall together constitute one and the same
agreement.

(h) Captions. The captions of the various sections and paragraphs of this
Agreement have been inserted only for the purposes of convenience; such captions
are not a part of this Agreement and shall not be deemed in any manner to
modify, explain, enlarge or restrict any of the provisions of this Agreement.

(i) Severability. In the event that any term or provision of this Agreement
shall be finally determined to be superseded, invalid, illegal or otherwise
unenforceable pursuant to applicable law by an authority having jurisdiction and
venue, that determination shall not impair or otherwise affect the validity,
legality or enforceability (i) by or before that authority of the remaining
terms and provisions of this Agreement, which shall be enforced as if the
unenforceable term or provision were deleted, or (ii) by or before any other
authority of any of the terms and provisions of this Agreement.

(j) Entire Agreement. This Agreement contains the entire agreement of the
parties and supersedes all other agreements and understandings, oral or written,
with respect to the matters contained herein. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by all
parties.

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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(k) Successors and Assignments. This Agreement shall be binding upon and inure
to the benefit of the respective heirs, representatives, successors and assigns
of the parties hereto, provided that this Agreement may not be assigned by the
Company without the prior written consent of the other party hereto and may be
assigned by the Grantee to an affiliate of the Grantee without the consent of
Acquisition Sub.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date
first above written. THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION THAT
MAY BE ENFORCED BY THE PARTIES.

WITNESS OUR SIGNATURES, this the 19 day of December, 2014.

 

By:  

/s/ Gary Herick

    By:  

/s/ Gerald Crocker

Name:   Gary Herick     Name:   Gerald Crocker Company:   CannaPharmaRX, Inc.  
  Company:   CannaPharmaRX, Inc. Title:   CFO     Title:   CEO Date:  
12-21-2014     Date:   12/18/14

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com

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&         By:  

/s/ Troy R. Vanderburg

    By:  

/s/ Terence P. Dolan

Name:   Troy R. Vanderburg     Name:   Terence P. Dolan Company:   Alternative
Investment Store – Division of Benjamin & Jerold Brokerage I, LLC. Title:   CEO-
Alternative Investment Store     Title:   CEO- Benjamin & Jerold Brokerage I,
LLC. Date:  

12/19/2014

    Date:  

12-19-14

 

Alternative Investment Store – Division of Benjamin & 
Jerold Brokerage I LLC, Member FINRA, SIPC, NYSE, ARCA, & BATS.

80 Broad St., 6th Floor New York, NY 10004

      www.AlternativeInvestmentStore.com