Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of November 25,
2019, by and between Quanta, Inc., a Nevada corporation, with headquarters
located at 3606 W Magnolia Blvd, Burbank CA, 91505 (the “Company”), and the
purchasers listed on the signature page hereto (each a “Purchaser” and
collectively the “Purchasers”).

 

WHEREAS:

 

A. The Company and Purchasers are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the rules
and regulations as promulgated by the United States Securities and Exchange
Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933
Act”);

 

B. Purchasers desire to purchase and the Company desires to issue and sell, upon
the terms and conditions set forth in this Agreement up to 5,000,000 shares of
the common stock $0.001 par value per share, of the Company (the “Common
Stock”), upon the terms and subject to the limitations and conditions set forth
herein;

 

C. Each Purchaser wishes to purchase, upon the terms and conditions stated in
this Agreement, such number of shares of Common Stock as is set forth
immediately below its name on the signature pages hereto; and

 

NOW THEREFORE, the Company and the Purchasers severally (and not jointly) hereby
agree as follows:

 

1. PURCHASE AND SALE OF COMMON STOCK.

 

a. Purchase of Common Stock. On the Closing Date (as defined below), the Company
shall issue and sell to the Purchasers and the Purchasers agree to purchase from
the Company the number of shares of Common Stock as is set forth immediately
below the Purchaser’s name on the signature page hereto.

 

b. Form of Payment. On the Closing Date (as defined below), (i) each Purchaser
shall pay a purchase price equal to ten cents ($0.10) per share for the Common
Stock to be issued and sold to it at the Closing (as defined below) (the
“Purchase Price”) by wire transfer of immediately available funds to the
Company, in accordance with the Company’s written wiring instructions, against
delivery of the number of shares of Common Stock as is set forth immediately
below the Purchaser’s name on the signature pages hereto, and (ii) the Company
shall deliver such shares of Common Stock, to each Purchaser, against delivery
of such Purchase Price.

 

 

 

 

c. Closing Date. Subject to the satisfaction (or written waiver) of the
conditions thereto set forth in Section 7 and Section 8 below, the date and time
of the issuance and sale of the Common Stock pursuant to this Agreement (the
“Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about December
6, 2019, or such other mutually agreed upon time. The closing of the
transactions contemplated by this Agreement (the “Closing”) shall occur on the
Closing Date at such location as may be agreed to by the parties.

 

2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser represents
and warrants to the Company that:

 

a. Investment Purpose. As of the date hereof, Purchaser is purchasing the Common
Stock for its own account and not with a present view towards the public sale or
distribution thereof, except pursuant to sales registered or exempted from
registration under the 1933 Act; provided, however, that by making the
representations herein, the Purchaser does not agree to hold any of the Common
Stock for any minimum or other specific term and reserves the right to dispose
of the Common Stock at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.

 

b. Accredited Investor Status. Purchaser is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

 

c. Reliance on Exemptions. Purchaser understands that the Common Stock is being
offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and Purchaser’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of Purchaser to acquire the
Common Stock.

 

d. Information. Purchaser and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Common Stock which have been
requested by the Purchaser or its advisors. Purchaser and its advisors, if any,
have been afforded the opportunity to ask questions of the Company.
Notwithstanding the foregoing, the Company has not disclosed to the Purchaser
any material nonpublic information and will not disclose such information unless
such information is disclosed to the public prior to or promptly following such
disclosure to the Purchaser. Neither such inquiries nor any other due diligence
investigation conducted by Purchaser or any of its advisors or representatives
shall modify, amend or affect Purchaser’s right to rely on the Company’s
representations and warranties contained in Section 3 below. Purchaser
understands that its investment in the Common Stock involves a significant
degree of risk. Purchaser is not aware of any facts that may constitute a breach
of any of the Company’s representations and warranties made herein.

 

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e. Governmental Review. Purchaser understands that no United States federal or
state agency or any other government or governmental agency has passed upon or
made any recommendation or endorsement of the Common Stock.

 

f. Transfer or Re-sale. Purchaser understands that (i) the sale or re-sale of
the Common Stock has not been and is not being registered under the 1933 Act or
any applicable state securities laws, and the Common Stock may not be
transferred unless (a) the Common Stock are sold pursuant to an effective
registration statement under the 1933 Act, (b) Purchaser shall have delivered to
the Company, at the cost of the Company, an opinion of counsel that shall be in
form, substance and scope customary for opinions of counsel in comparable
transactions to the effect that the Common Stock to be sold or transferred may
be sold or transferred pursuant to an exemption from such registration, which
opinion shall be accepted by the Company, (c) the Common Stock are sold or
transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933
Act (or a successor rule) (“Rule 144”)) of the Purchaser who agrees to sell or
otherwise transfer the Common Stock only in accordance with this Section 2(f)
and who is an Accredited Investor, (d) the Common Stock are sold pursuant to
Rule 144, or (e) the Common Stock are sold pursuant to Regulation S under the
1933 Act (or a successor rule) (“Regulation S”), and the Purchaser shall have
delivered to the Company, at the cost of the Company an opinion of counsel that
shall be in form, substance and scope customary for opinions of counsel in
corporate transactions, which opinion shall be accepted by the Company; (ii) any
sale of such Common Stock made in reliance on Rule 144 may be made only in
accordance with the terms of said Rule and further, if said Rule is not
applicable, any re-sale of such Common Stock under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder. Notwithstanding the foregoing or anything else contained herein
to the contrary, the Common Stock may be pledged as collateral in connection
with a bona fide margin account or other lending arrangement. In the event that
the Company does not accept the opinion of counsel provided by the Purchaser
with respect to the transfer of Common Stock pursuant to an exemption from
registration, such as Rule 144 or Regulation S, within three (3) business days
of delivery of the opinion to the Company, the Company shall pay to the
Purchaser liquidated damages of three and one half percent (3.5%) of the current
market value of the Common Stock per day in cash (“Standard Liquidated Damages
Amount”).

 

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g. Legends. The Purchaser understands that until such time as the Common Stock
has been registered or may be sold pursuant to Rule 144 or Regulation S without
restriction, the Common Stock may bear a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of the
certificates for such Common Stock):

 

“THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A
GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.”

 

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped, if, unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective registration statement
filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or
Regulation S without any restriction as to the number of securities as of a
particular date that can then be immediately sold, or (b) such holder provides
the Company with an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public
sale or transfer of such Security may be made without registration under the
1933 Act, which opinion shall be accepted by the Company so that the sale or
transfer is effected. The Purchaser agrees to sell all Common Stock, including
those represented by a certificate(s) from which the legend has been removed, in
compliance with applicable prospectus delivery requirements, if any. In the
event that the Company does not accept the opinion of counsel provided by the
Purchaser with respect to the transfer of Common Stock pursuant to an exemption
from registration, such as Rule 144 or Regulation S.

 

h. Authorization; Enforcement. This Agreement has been duly and validly
authorized. This Agreement has been duly executed and delivered on behalf of the
Purchaser, and this Agreement constitutes a valid and binding agreement of the
Purchaser enforceable in accordance with its terms.

 

i. Residency. The Purchaser is a resident of the jurisdiction as set forth in
the signature page of this Agreement.

 

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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to the Purchasers that:

 

a. Organization and Qualification. The Company and each of its Subsidiaries (as
defined below), if any, is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated,
with full power and authority (corporate and other) to own, lease, use and
operate its properties and to carry on its business as and where now owned,
leased, used, operated and conducted. The Company and each of its Subsidiaries
is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which its ownership or use of property or the
nature of the business conducted by it makes such qualification necessary except
where the failure to be so qualified or in good standing would not have a
Material Adverse Effect. “Material Adverse Effect” means any material adverse
effect on the business, operations, assets, financial condition or prospects of
the Company or its Subsidiaries, if any, taken as a whole, or on the
transactions contemplated hereby or by the agreements or instruments to be
entered into in connection herewith. “Subsidiaries” means any corporation or
other organization, whether incorporated or unincorporated, in which the Company
owns, directly or indirectly, any equity or other ownership interest.

 

b. Authorization; Enforcement. (i) The Company has all requisite corporate power
and authority to enter into and perform this Agreement, and to consummate the
transactions contemplated hereby and thereby and to issue the Common Stock, in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby (including without limitation, that the issuance
of the Common Stock has been duly authorized by the Company’s Board of Directors
and no further consent or authorization of the Company, its Board of Directors,
or its shareholders is required), (iii) this Agreement has been duly executed
and delivered by the Company by its authorized representative, and such
authorized representative is the true and official representative with authority
to sign this Agreement and the other documents executed in connection herewith
and bind the Company accordingly, and (iv) this Agreement constitutes a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms. The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than: (i) the filing of Form D with the Commission, and (ii) such filings as are
required to be made under applicable state securities laws (collectively, the
“Required Approvals”).

 

c. Capitalization. As of the Closing Date, the authorized capital stock of the
Company consists of: (i) 100,000,000 shares of Common Stock, of which 44,646,255
shares are issued and outstanding; (ii) 0 shares of preferred stock, of which no
shares are issued and outstanding. Except as disclosed in the Public Documents
or Exhibit 3(c) hereto, no shares are reserved for issuance pursuant to the
Company’s stock option plans, no shares are reserved for issuance pursuant to
securities exercisable for, or convertible into, or exchangeable for shares of
common stock. All of such outstanding shares of capital stock are, or upon
issuance will be, duly authorized, validly issued, fully paid and
non-assessable. No shares of capital stock of the Company are subject to
preemptive rights or any other similar rights of the shareholders of the Company
or any liens or encumbrances imposed through the actions or failure to act of
the Company. Except as disclosed in the Public Documents, as of the effective
date of this Agreement, (i) there are no outstanding options, warrants, scrip,
rights to subscribe for, puts, calls, rights of first refusal, agreements,
understandings, claims or other commitments or rights of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of the Company or any of its Subsidiaries, or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries, (ii) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
its or their securities under the 1933 Act and (iii) there are no anti-dilution
or price adjustment provisions contained in any security issued by the Company
(or in any agreement providing rights to security holders) that will be
triggered by the issuance of the Common Stock. The Company has filed in its
Public Documents true and correct copies of the Company’s Certificate of
Incorporation as in effect on the date hereof (“Certificate of Incorporation”),
the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the
terms of all securities convertible into or exercisable for common stock of the
Company and the material rights of the holders thereof in respect thereto. The
Company shall provide the Purchaser with a written update of this representation
signed by the Company’s Chief Executive on behalf of the Company as of the
Closing Date.

 

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d. Issuance of Shares. The issuance of the Common Stock is duly authorized and,
upon issuance in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable and free from all preemptive or similar
rights, taxes, liens, charges and other encumbrances with respect to the issue
thereof and shall not be subject to preemptive rights or other similar rights of
shareholders of the Company and will not impose personal liability upon the
holder thereof.

 

e. Acknowledgment of Dilution. The Company understands and acknowledges the
dilutive effect of the issuance of the Common Stock.

 

f. No Conflicts. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
hereby and thereby will not (i) conflict with or result in a violation of any
provision of the Certificate of Incorporation or By-laws, or (ii) violate or
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which with notice or lapse of time or both could become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture, patent, patent
license or instrument to which the Company or any of its Subsidiaries is a
party, or (iii) result in a violation of any state law, rule, regulation, order,
judgment or decree (including state securities laws and regulations and
regulations of any self-regulatory organizations to which the Company or its
securities are subject) applicable to the Company or any of its Subsidiaries or
by which any property or asset of the Company or any of its Subsidiaries is
bound or affected (except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect). Neither the
Company nor any of its Subsidiaries is in violation of its Certificate of
Incorporation, By-laws or other organizational documents and neither the Company
nor any of its Subsidiaries is in default (and no event has occurred which with
notice or lapse of time or both could put the Company or any of its Subsidiaries
in default) under, and neither the Company nor any of its Subsidiaries has taken
any action or failed to take any action that would give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a
party or by which any property or assets of the Company or any of its
Subsidiaries is bound or affected, except for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses
of the Company and its Subsidiaries, if any, are not being conducted, and shall
not be conducted so long as the Purchaser owns any of the Common Stock, in
violation of any law, ordinance or regulation of any governmental entity. Except
as specifically contemplated by this Agreement and as required under the 1933
Act and any applicable state securities laws, the Company is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court, governmental agency, regulatory agency,
self-regulatory organization or stock market or any third party in order for it
to execute, deliver or perform any of its obligations under this Agreement in
accordance with the terms hereof or thereof or to issue and sell the Common
Stock in accordance with the terms hereof. All consents, authorizations, orders,
filings and registrations which the Company is required to obtain pursuant to
the preceding sentence have been obtained or effected on or prior to the date
hereof. The Company is not in violation of the listing requirements of the
Over-the-Counter Bulletin Board (the “OTCBB”), the OTCQB or any similar
quotation system, and does not reasonably anticipate that the Common Stock will
be delisted by the OTCBB, the OTCQB or any similar quotation system, in the
foreseeable future nor are the Company’s securities “chilled” by DTC. The
Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.

 

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g. Public Documents; Financial Statements. The Company has timely filed all
quarterly and annual reports required to be filed by it (all of the foregoing
filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits to such
documents) incorporated by reference therein, being hereinafter referred to
herein as the “Public Documents”). The Company has delivered to the Purchaser
true and complete copies of the Public Documents, except for such exhibits and
incorporated documents, and except as such Documents are publicly available. As
of their respective dates, none of the Public Documents, at the time they were
filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. None of the statements made in any such Public Documents is, or
has been, required to be amended or updated under applicable law (except for
such statements as have been amended or updated in subsequent filings prior the
date hereof). The financial statements fairly present in all material respects
the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except as set forth
in the financial statements of the Company, the Company has no liabilities,
contingent or otherwise, other than (i) liabilities incurred in the ordinary
course of business, and (ii) obligations under contracts and commitments
incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected in such financial statements,
which, individually or in the aggregate, are not material to the financial
condition or operating results of the Company.

 

h. Absence of Certain Changes. Since June 30, 2019 there has been no material
adverse change and no material adverse development in the assets, liabilities,
business, properties, operations, financial condition, results of operations, or
prospects of the Company or any of its Subsidiaries.

 

i. Absence of Litigation. There is no action, suit, claim, proceeding, inquiry
or investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened against or affecting the Company or any
of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect. Schedule 3(i) contains a complete
list and summary description of any pending or, to the knowledge of the Company,
threatened proceeding against or affecting the Company or any of its
Subsidiaries, without regard to whether it would have a Material Adverse Effect.
The Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.

 

j. Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or
possesses the requisite licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and copyrights
(“Intellectual Property”) necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future). Except
as disclosed in the Public Documents, there is no claim or action by any person
pertaining to, or proceeding pending, or to the Company’s knowledge threatened,
which challenges the right of the Company or of a Subsidiary with respect to any
Intellectual Property necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future); to the
best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and
intended products, services and processes do not infringe on any Intellectual
Property or other rights held by any person; and the Company is unaware of any
facts or circumstances which might give rise to any of the foregoing. The
Company and each of its Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of their Intellectual Property.

 

k. No Materially Adverse Contracts, Etc. Neither the Company nor any of its
Subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which in the judgment of the
Company’s officers has or is expected in the future to have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is a party to any
contract or agreement which in the judgment of the Company’s officers has or is
expected to have a Material Adverse Effect.

 

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l. Tax Status. The Company and each of its Subsidiaries has made or filed all
federal, state and foreign income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim. The Company has not executed a
waiver with respect to the statute of limitations relating to the assessment or
collection of any foreign, federal, state or local tax. None of the Company’s
tax returns is presently being audited by any taxing authority.

 

m. Certain Transactions. Except for arm’s length transactions pursuant to which
the Company or any of its Subsidiaries makes payments in the ordinary course of
business upon terms no less favorable than the Company or any of its
Subsidiaries could obtain from third parties and other than the grant of stock
options disclosed on Schedule 3(c), none of the officers, directors, or
employees of the Company is presently a party to any transaction with the
Company or any of its Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.

 

n. Disclosure. All information relating to or concerning the Company or any of
its Subsidiaries set forth in this Agreement and provided to the Purchaser
pursuant to Section 2(d) hereof and otherwise in connection with the
transactions contemplated hereby is true and correct in all material respects
and the Company has not omitted to state any material fact necessary in order to
make the statements made herein or therein, in light of the circumstances under
which they were made, not misleading. No event or circumstance has occurred or
exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, prospects, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.

 

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o. Acknowledgment Regarding Purchase of Common Stock. The Company acknowledges
and agrees that the Purchasers are acting solely in the capacity of arm’s length
purchasers with respect to this Agreement and the transactions contemplated
hereby. The Company further acknowledges that the Purchaser is not acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement and the transactions contemplated hereby and any
statement made by the Purchaser or any of its respective representatives or
agents in connection with this Agreement and the transactions contemplated
hereby is not advice or a recommendation and is merely incidental to the
Purchaser’ purchase of the Common Stock. The Company further represents to the
Purchaser that the Company’s decision to enter into this Agreement has been
based solely on the independent evaluation of the Company and its
representatives.

 

p. No Integrated Offering. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has directly or indirectly made any
offers or sales in any security or solicited any offers to buy any security
under circumstances that would require registration under the 1933 Act of the
issuance of the Common Stock to the Purchaser. The issuance of the Common Stock
to the Purchaser will not be integrated with any other issuance of the Company’s
securities (past, current or future) for purposes of any shareholder approval
provisions applicable to the Company or its securities.

 

q. No Brokers. The Company has taken no action which would give rise to any
claim by any person for brokerage commissions, transaction fees or similar
payments relating to this Agreement or the transactions contemplated hereby.

 

r. Permits; Compliance. The Company and each of its Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the “Company Permits”), and there is
no action pending or, to the knowledge of the Company, threatened regarding
suspension or cancellation of any of the Company Permits. Neither the Company
nor any of its Subsidiaries is in conflict with, or in default or violation of,
any of the Company Permits, except for any such conflicts, defaults or
violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Since June 30, 2019, neither the
Company nor any of its Subsidiaries has received any notification with respect
to possible conflicts, defaults or violations of applicable laws, except for
notices relating to possible conflicts, defaults or violations, which conflicts,
defaults or violations would not have a Material Adverse Effect.

 

s. Environmental Matters.

 

(i) There are, to the Company’s knowledge, with respect to the Company or any of
its Subsidiaries or any predecessor of the Company, no past or present
violations of Environmental Laws (as defined below), releases of any material
into the environment, actions, activities, circumstances, conditions, events,
incidents, or contractual obligations which may give rise to any common law
environmental liability or any liability under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 or similar federal, state,
local or foreign laws and neither the Company nor any of its Subsidiaries has
received any notice with respect to any of the foregoing, nor is any action
pending or, to the Company’s knowledge, threatened in connection with any of the
foregoing. The term “Environmental Laws” means all federal, state, local or
foreign laws relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants contaminants, or toxic or hazardous substances or wastes
(collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.

 

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(ii) Other than those that are or were stored, used or disposed of in compliance
with applicable law, no Hazardous Materials are contained on or about any real
property currently owned, leased or used by the Company or any of its
Subsidiaries, and no Hazardous Materials were released on or about any real
property previously owned, leased or used by the Company or any of its
Subsidiaries during the period the property was owned, leased or used by the
Company or any of its Subsidiaries, except in the normal course of the Company’s
or any of its Subsidiaries’ business.

 

(iii) There are no underground storage tanks on or under any real property
owned, leased or used by the Company or any of its Subsidiaries that are not in
compliance with applicable law.

 

t. Title to Property. Except as disclosed in the Public Documents the Company
and its Subsidiaries have good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by them
which is material to the business of the Company and its Subsidiaries, in each
case free and clear of all liens, encumbrances and defects or such as would not
have a Material Adverse Effect. Any real property and facilities held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as would not have a
Material Adverse Effect.

 

u. Internal Accounting Controls. Except as disclosed in the Public Documents the
Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient, in the judgment of the Company’s board of directors, to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

 

10

 

 

v. Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries,
nor any director, officer, agent, employee or other person acting on behalf of
the Company or any Subsidiary has, in the course of his actions for, or on
behalf of, the Company, used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended, or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.

 

w. No Investment Company. The Company is not, and upon the issuance and sale of
the Common Stock contemplated by this Agreement will not be an “investment
company” required to be registered under the Investment Company Act of 1940 (an
“Investment Company”). The Company is not controlled by an Investment Company.

 

x. Insurance. The Company and each of its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its Subsidiaries are engaged. Neither the
Company nor any such Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.
Upon written request the Company will provide to the Purchaser true and correct
copies of all policies relating to directors’ and officers’ liability coverage,
errors and omissions coverage, and commercial general liability coverage.

 

y. Bad Actor. No officer or director of the Company would be disqualified under
Rule 506(d) of the Securities Act as amended on the basis of being a “bad actor”
as that term is established in the September 19, 2013 Small Entity Compliance
Guide published by the SEC.

 

z. Shell Status. The Company represents that it is not a “shell” issuer and has
never been a “shell” issuer. Further, even if the Company is ever deemed to have
been a “shell” issuer as of the merger that occurred on June 6, 2018 (the
“Merger”), it is no longer a “shell” issuer. Additionally, the Form 10 type
information that would have been required if the Company was a “shell” issuer
prior to the Merger was filed in the form 8-K filed with the Commission on
December 21, 2018. Further, the Company will instruct its counsel to either (i)
write a Rule 144 opinion to allow for salability of the Common Stock or (ii)
accept such opinion from Holder’s counsel.

 

11

 

 

aa. No-Off Balance Sheet Arrangements. There is no transaction, arrangement, or
other relationship between the Company or any of its Subsidiaries and an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company and is not so disclosed or that otherwise could be
reasonably likely to have a Material Adverse Effect.

 

bb. Manipulation of Price. The Company has not, and to its knowledge no one
acting on its behalf has: (i) taken, directly or indirectly, any action designed
to cause or to result, or that could reasonably be expected to cause or result,
in the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of any of the Common Stock, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the
Common Stock, or (iii) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.

 

cc. Sarbanes-Oxley Act. The Company and each Subsidiary is in material
compliance with all SEC reporting company OTC Market OTCQB applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date
hereof, and all applicable rules and regulations promulgated by the SEC
thereunder that are effective as of the date hereof that are applicable to SEC
reporting OTC Markets OTCQB companies.

 

dd. Employee Relations. Neither the Company nor any of its Subsidiaries is a
party to any collective bargaining agreement or employs any member of a union.
The Company believes that its and its Subsidiaries’ relations with their
respective employees are good. No executive officer (as defined in Rule 501(f)
promulgated under the 1933 Act) or other key employee of the Company or any of
its Subsidiaries has notified the Company or any such Subsidiary that such
officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Subsidiary. To
the knowledge of the Company, no executive officer or other key employee of the
Company or any of its Subsidiaries is, or is now expected to be, in violation of
any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment
of each such executive officer or other key employee (as the case may be) does
not subject the Company or any of its Subsidiaries to any liability with respect
to any of the foregoing matters. The Company and its Subsidiaries are in
compliance with all federal, state, local and foreign laws and regulations
respecting labor, employment and employment practices and benefits, terms and
conditions of employment and wages and hours, except where failure to be in
compliance would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

 

4. COVENANTS.

 

a. Best Efforts. The parties shall use their commercially reasonable best
efforts to satisfy timely each of the conditions described in Section 5 and 6 of
this Agreement.

 

b. Form D; Blue Sky Laws. The Company agrees to file a Form D with respect to
the Common Stock as required under Regulation D and to provide a copy thereof to
the Purchaser promptly after such filing. The Company shall, on or before the
Closing Date, take such action as the Company shall reasonably determine is
necessary to qualify the Common Stock for sale to the Purchaser at the
applicable closing pursuant to this Agreement under applicable securities or
“blue sky” laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken
to the Purchaser on or prior to the Closing Date.

 

12

 

 

c. Use of Proceeds. The Company shall use the proceeds from the sale of the
Common Stock for working capital and other general corporate purposes and shall
not, directly or indirectly, use such proceeds for any loan to or investment in
any other corporation, partnership, enterprise or other person (except in
connection with its currently existing direct or indirect Subsidiaries).

 

d. Right of First Refusal. Unless it shall have first delivered to the
Purchaser, at least seventy two (72) hours prior to the closing of such Future
Offering (as defined herein), written notice describing the proposed Future
Offering, including the terms and conditions thereof, and providing the
Purchasers an option during the seventy two (72) hour period following delivery
of such notice to purchase the securities being offered in the Future Offering
on the same terms as contemplated by such Future Offering (the limitations
referred to in this sentence and the preceding sentence are collectively
referred to as the “Right of First Refusal”) (and subject to the exceptions
described below), the Company will not conduct any equity financing (including
debt with an equity component) (“Future Offerings”) during the period beginning
on the Closing Date and ending twelve (12) months following the Closing Date. In
the event the terms and conditions of a proposed Future Offering are amended in
any respect after delivery of the notice to the Purchasers concerning the
proposed Future Offering, the Company shall deliver a new notice to the
Purchasers describing the amended terms and conditions of the proposed Future
Offering, and the Purchasers thereafter shall have an option during the seventy
two (72) hour period following delivery of such new notice to purchase their pro
rata share of the securities being offered on the same terms as contemplated by
such proposed Future Offering, as amended. The foregoing sentence shall apply to
successive amendments to the terms and conditions of any proposed Future
Offering. The Right of First Refusal shall not apply to any transaction
involving (i) issuances of securities in a firm commitment underwritten public
offering (excluding a continuous offering pursuant to Rule 415 under the 1933
Act), (ii) issuances to employees, officers, directors, contractors, consultants
or other advisors approved by the Board, (iii) issuances to strategic partners
or other parties in connection with a commercial relationship, or providing the
Company with equipment leases, real property leases or similar transactions
approved by the Board (iv) issuances of securities as consideration for a
merger, consolidation or purchase of assets, or in connection with any strategic
partnership or joint venture (the primary purpose of which is not to raise
equity capital), or in connection with the disposition or acquisition of a
business, product or license by the Company. The Right of First Refusal also
shall not apply to the issuance of securities upon exercise or conversion of the
Company’s options, warrants or other convertible securities outstanding as of
the date hereof or to the grant of additional options or warrants, or the
issuance of additional securities, under any Company stock option or restricted
stock plan approved by the shareholders of the Company.

 

13

 

 

e. Financial Information. Following such time and the Company has begun making
public filings with the SEC, the Company agrees to send or make available the
following reports to the Purchaser until the Purchaser transfers, assigns, or
sells all of the Securities: (i) within ten (10) days after the filing with the
SEC, a copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10-Q
and any Current Reports on Form 8-K; (ii) within one (1) day after release,
copies of all press releases issued by the Company or any of its Subsidiaries;
and (iii) contemporaneously with the making available or giving to the
shareholders of the Company, copies of any notices or other information the
Company makes available or gives to such shareholders. For the avoidance of
doubt, filing the documents required in (i) above via EDGAR or releasing any
documents set forth in (ii) above via a recognized wire service shall satisfy
the delivery requirements of this Section 4(e).

 

f. Listing. The Company shall promptly secure the listing of the Common Stock
upon each national securities exchange or automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance) and, so long as the Purchaser owns any of the Common Stock, shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all the Common Stock. The Company will obtain and, so long as the
Purchaser owns any of the maintain the listing and trading of its Common Stock
on the OTCBB, OTCQB, OTC Pink or any equivalent replacement exchange, the Nasdaq
National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the
New York Stock Exchange (“NYSE”), or the NYSE MKT and will comply in all
respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and
such exchanges, as applicable. The Company shall promptly provide to the
Purchaser copies of any material notices it receives from the OTCBB, OTCQB and
any other exchanges or quotation systems on which the Common Stock is then
listed regarding the continued eligibility of the Common Stock for listing on
such exchanges and quotation systems. The Company shall pay any and all fees and
expenses in connection with satisfying its obligation under this Section 4(f).

 

g. Corporate Existence. The Company shall maintain its corporate existence and
shall not sell all or substantially all of the Company’s assets, except in the
event of a merger or consolidation or sale of all or substantially all of the
Company’s assets, where the surviving or successor entity in such transaction
(i) assumes the Company’s obligations hereunder and under the agreements and
instruments entered into in connection herewith and (ii) is a publicly traded
corporation whose Common Stock is listed for trading on the OTCBB, OTCQB, OTC
Pink, Nasdaq, NasdaqSmallCap, NYSE or AMEX.

 

14

 

 

h. No Integration. The Company shall not make any offers or sales of any
security under circumstances that would require the Common Stock to be
integrated with any other offering of securities by the Company for the purpose
of any stockholder approval provision applicable to the Company or its
securities.

 

i. Failure to Comply with the 1934 Act. The Company will make any and all
filings necessary or advisable in order to comply with the Exchange Act of 1934
(the “1934 Act”), including the timely filing of quarterly and annual reporting
requirements of the 1934 Act; and the Company shall continue to be subject to
the reporting requirements of the 1934 Act.

 

j. Legal Counsel Opinions. Upon the request of the Purchaser from to time to
time, the Company shall be responsible (at its cost) for promptly (within ten
(10) business days from the Purchaser’s request) supplying to the Company’s
transfer agent and the Purchaser a customary legal opinion letter of its counsel
(the “Legal Counsel Opinion”) to the effect that the sale of the Common Stock by
the Purchaser or its affiliates, successors and assigns is exempt from the
registration requirements of the 1933 Act pursuant to Rule 144 (provided the
requirements of Rule 144 are satisfied and provided the Common Stock not then
registered under the 1933 Act for resale pursuant to an effective registration
statement). Should the Company’s legal counsel fail for any reason to issue the
Legal Counsel Opinion, the Purchaser may (at the Company’s cost) secure another
legal counsel to issue the Legal Counsel Opinion, and the Company will instruct
its transfer agent to accept such opinion.

 

k. Par Value. If the closing bid price at any time falls below $0.0001 for five
(5) consecutive days, the Company shall cause the par value of its common stock
to be reduced to $0.00001 or less.

 

l. Registration Statement. The Company shall file and caused to be declared
effective a resale registration statement, including any amendment or supplement
thereto, on Form S-1 or similar form, to allow the resale by Investors of the
Common Stock, and shall maintain the effectiveness of such registration
statement for a minimum period of twelve (12) months following the initial
effective date, pursuant to the terms set forth on in the Registration Rights
Agreement (together with this Agreement, the “Transaction Documents”) of even
date between the parties, attached hereto as Exhibit A.

 

m. Adjustment Due to Dilutive Issuance. If, at any time prior to the effective
date of a resale registration statement registering the Common Stock, the
Company issues or sells any shares of common stock, or securities convertible or
exercisable into shares of common stock, for consideration per share (before
deduction of reasonable expenses or commissions or underwriting discounts or
allowances in connection therewith) less than ten cents ($0.10)(a “Dilutive
Issuance”), then immediately upon the Dilutive Issuance, the Purchase Price
stated in Section 1(b) above will be reduced to such lesser amount of
consideration per share received by the Company in such Dilutive Issuance
(“Dilutive Issuance Price”), and Company shall immediately issue to each
Purchaser, pro rata according to the amount of Common Stock such Purchaser
purchased pursuant to this Agreement, additional shares of Common Stock equal to
the gross dollar amount paid by Purchaser for the Common Stock divided by the
Dilutive Issuance Price, less the initial amount of Common Stock purchased by
Purchaser (“Dilutive Issuance Stock”). [Example: Purchaser purchases $100,000
worth of shares of Common Stock at $0.10 per share, or 1,000,000 shares. Company
conducts a Dilutive Issuance equal to $0.06 per share. Company would immediately
issue to Purchaser [($100,000 / $0.06) – 1,000,000 = 666,667] shares of Dilutive
Issuance Stock. Company agrees to register any Dilutive Issuance Stock together
with the Common Stock in Company’s resale S-1 registration statement.

 

15

 

 

n. At any time commencing on the Closing Date and ending at such time that all
of the Common Stock has been sold by the Purchasers, if the Company shall fail
for any reason to satisfy the current public information requirement under Rule
144(c) (a “Public Information Failure”), then, in addition to such Purchaser’s
other available remedies, the Company shall pay to a Purchaser, in cash, as
partial liquidated damages and not as a penalty, by reason of any such delay in
or reduction of its ability to sell the Securities, an amount in cash equal to
two percent (2.0%) of the aggregate principal amount of Notes and accrued
interest held by such Purchaser on the day of a Public Information Failure and
on every thirtieth (30th) day (pro-rated for periods totaling less than thirty
days) thereafter until the earlier of (a) the date such Public Information
Failure is cured and (b) such time that such public information is no longer
required for the Purchasers to transfer the Underlying Shares pursuant to Rule
144. The payments to which a Purchaser shall be entitled pursuant to this
Section 4.3(b) are referred to herein as “Public Information Failure Payments.”
Public Information Failure Payments shall be paid on the earlier of (i) the last
day of the calendar month during which such Public Information Failure Payments
are incurred and (ii) the third (3rd) Business Day after the event or failure
giving rise to the Public Information Failure Payments is cured. In the event
the Company fails to make Public Information Failure Payments in a timely
manner, such Public Information Failure Payments shall bear interest at the rate
of 1.5% per month (prorated for partial months) until paid in full. Nothing
herein shall limit such Purchaser’s right to pursue actual damages for the
Public Information Failure, and such Purchaser shall have the right to pursue
all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief.

 

o. Independent Nature of Purchasers’ Obligations and Rights. The obligations of
each Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto
or thereto, shall he deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to he joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in its review and negotiation of the Transaction
Documents. 

 

16

 

 

5. CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of
the Company hereunder to issue and sell the Common Stock to the Purchasers at
the Closing is subject to the satisfaction, at or before the Closing Date of
each of the following conditions thereto, provided that these conditions are for
the Company’s sole benefit and may be waived by the Company at any time in its
sole discretion:

 

a. Each Purchaser shall have executed this Agreement and delivered the same to
the Company.

 

b. Each Purchaser shall have delivered the Purchase Price in accordance with
Section 1(b) above corresponding to the number of shares of Common Stock
purchased.

 

c. The representations and warranties of each Purchaser shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date), and the Purchaser shall have performed, satisfied
and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Purchaser at or prior to the Closing Date.

 

d. No litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.

 

6. CONDITIONS PRECEDENT TO THE PURCHASERS’ OBLIGATION TO PURCHASE. The
obligation of the Purchasers hereunder to purchase the Common Stock at the
Closing is subject to the satisfaction, at or before the Closing Date of each of
the following conditions, provided that these conditions are for the Purchasers’
sole benefit and may be waived by the Purchaser at any time in its sole
discretion:

 

a. The Company shall have executed this Agreement and delivered the same to the
Purchaser.

 

17

 

 

b. The Board of Directors of the Company shall have approved by Written Consent
(the “Consent”) the issuance of the Common Stock and transactions contemplated
by this Agreement and the Company shall have delivered such fully executed
Consent to Purchasers.

 

c. The Company shall have delivered to Purchasers the Common Stock, duly issued,
in the amounts designated to each Purchaser as set forth in the signature page.

 

d. The representations and warranties of the Company shall be true and correct
in all material respects as of the date when made and as of the Closing Date as
though made at such time (except for representations and warranties that speak
as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the Closing Date. Purchasers shall have received a
certificate or certificates, executed by the chief executive officer of the
Company, dated as of the Closing Date, to the foregoing effect and as to such
other matters as may be reasonably requested by Purchasers including, but not
limited to certificates with respect to the Company’s Certificate of
Incorporation, By-laws and Board of Directors’ resolutions relating to the
transactions contemplated hereby.

 

e. No litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.

 

f. No event shall have occurred which could reasonably be expected to have a
Material Adverse Effect on the Company.

 

g. The Common Stock shall have been authorized for quotation on the OTCBB,
OTCQB, OTC Pink or any similar quotation system and trading in the Common Stock
on the OTCBB, OTCQB or any similar quotation system shall not have been
suspended by the SEC or the OTCBB, OTCQB, OTC Pink or any similar quotation
system.

 

18

 

 

7. GOVERNING LAW; MISCELLANEOUS.

 

a. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement, or any other
agreement, certificate, instrument or document contemplated hereby shall be
brought exclusively in the state courts of New York or in the federal courts
located in the State and County of New York. The parties to this Agreement
hereby irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER
TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY
OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
The prevailing party shall be entitled to recover from the other party its
reasonable attorney’s fees and costs. In the event that any provision of this
Agreement or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to
process being served in any suit, action or proceeding in connection with this
Agreement or any other Transaction Document by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any other manner permitted by law.

 

b. Counterparts; Signatures by Facsimile. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.

 

c. Construction; Headings. This Agreement shall be deemed to be jointly drafted
by the Company and the Purchasers and shall not be construed against any person
as the drafter hereof. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.

 

d. Severability. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provision hereof.

 

e. Entire Agreement; Amendments. This Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor the Purchaser makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an instrument in writing
signed by the majority in interest of the Purchaser.

 

19

 

 

f. Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, email, or facsimile, addressed as set
forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by email or facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

 

If to the Company, to:

 

Quanta, Inc.

3606 W Magnolia Blvd

Burbank CA, 91505

Email:

Attn: Blake Gillette

 

If to Purchaser, to:

 

[as listed on the signature page]

 

Each party shall provide notice to the other party of any change in address.

 

g. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and assigns. Neither the Company nor
the Purchaser shall assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other. Notwithstanding the foregoing,
subject to Section 2(f), the Purchaser may assign its rights hereunder to any
person that purchases the Common Stock in a private transaction from the
Purchaser or to any of its “affiliates,” as that term is defined under the 1934
Act, without the consent of the Company.

 

h. Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not
for the benefit of, nor may any provision hereof be enforced by, any other
person.

 

i. Survival. The representations and warranties of the Company and the
agreements and covenants set forth in this Agreement shall survive the closing
hereunder not withstanding any due diligence investigation conducted by or on
behalf of the Purchaser. The Company agrees to indemnify and hold harmless the
Purchaser and all their officers, directors, employees and agents for loss or
damage arising as a result of or related to any breach or alleged breach by the
Company of any of its representations, warranties and covenants set forth in
this Agreement or any of its covenants and obligations under this Agreement,
including advancement of expenses as they are incurred.

 

20

 

 

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

 

k. No Strict Construction. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

l. Remedies. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Purchaser by vitiating the intent
and purpose of the transaction contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Agreement will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Agreement, that the Purchaser
shall be entitled, in addition to all other available remedies at law or in
equity, and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Agreement and
to enforce specifically the terms and provisions hereof, without the necessity
of showing economic loss and without any bond or other security being required.

 

m. Securities Laws Disclosure; Publicity. The Company shall by 9:30 a.m. (New
York City time) on the second (2nd) Trading Day immediately following the date
hereof, issue a press release or Current Report on Form 8-K disclosing the
material terms of the transactions contemplated hereby. The Company represents
to the Purchasers that, as of the issuance of such press release or Form 8-K, it
shall have publicly disclosed all material, non-public information delivered to
any of the Purchasers by the Company or any of its Subsidiaries, or any of their
respective officers, directors, employees, or agents in connection with the
transactions contemplated by the Transaction Documents. The Company, and the
Purchaser shall have the right to review a reasonable period of time before
issuance of any press releases, SEC, OTCQB or FINRA filings, or any other public
statements with respect to the transactions contemplated hereby; provided,
however, that the Company shall be entitled, without the prior approval of the
Purchaser, to make any press release or SEC, OTCQB (or other applicable trading
market) or FINRA filings with respect to such transactions as is required by
applicable law and regulations (although the Purchaser shall be consulted by the
Company in connection with any such press release prior to its release and shall
be provided with a copy thereof and be given an opportunity to comment thereon).

 

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

 

quanta, inc.         By:   Name: Eric Rice   Title: Chief Executive Officer  

 

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[PURCHASER SIGNATURE PAGE TO QUANTA, INC.

SECURITIES PURCHASE AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

Name of Purchaser:

 

Signature of Authorized Signatory of Purchaser:

 

Name of Authorized Signatory:

 

Title of Authorized Signatory:

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

Address for Delivery of Securities to Purchaser (if not same as address for
notice):

 

______________________________________________________________________________

 

______________________________________________________________________________

 

______________________________________________________________________________

 

 

Subscription Amount: $

 

Common Stock:

 

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