Securities Purchase Agreement

 

This Securities Purchase Agreement (this “Agreement”), dated as of July 1, 2014,
is entered into by and between OSL Holdings Inc., a Nevada corporation
(“Company”), and Typenex Co-Investment, LLC, a Utah limited liability company,
its successors and/or assigns (“Investor”).

 

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

 

B. Investor desires to purchase and Company desires to issue and sell, upon the
terms and conditions set forth in this Agreement (i) a Secured Convertible
Promissory Note, in the form attached hereto as Exhibit A, in the original
principal amount of $535,000.00 (the “Note”), convertible into shares of common
stock, $0.001 par value per share, of Company (the “Common Stock”), upon the
terms and subject to the limitations and conditions set forth in such Note, and
(ii) a series of seven (7) Warrants to Purchase Common Stock, in the form
attached hereto as Exhibit B (the “Warrants”).

 

C. This Agreement, the Note, the Warrants, the Security Agreement (as defined
below), the Pledge Agreement (as defined below), the Secured Investor Notes (as
defined below), the Investor Notes (as defined below), and all other
certificates, documents, agreements, resolutions and instruments delivered to
any party under or in connection with this Agreement, as the same may be amended
from time to time, are collectively referred to herein as the “Transaction
Documents”.

 

D. For purposes of this Agreement: “Conversion Shares” means all shares of
Common Stock issuable upon conversion of all or any portion of the Note;
“Warrant Shares” means all shares of Common Stock issuable upon the exercise of
or pursuant to the Warrants; and “Securities” means the Note, the Conversion
Shares, the Warrants and the Warrant Shares.

 

NOW, THEREFORE, Company and Investor hereby agree as follows:

 

1. Purchase and Sale of Securities.

 

1.1. Purchase of Securities. Company shall issue and sell to Investor and
Investor agrees to purchase from Company the Note and the Warrants. In
consideration thereof, Investor shall pay (i) the amount designated as the
initial cash purchase price on Investor’s signature page to this Agreement (the
“Initial Cash Purchase Price”), and (ii) issue to Company the Secured Investor
Notes and the Investor Notes (the sum of the initial principal amount of the
Secured Investor Notes and the Investor Notes, together with the Initial Cash
Purchase Price, the “Purchase Price”). Subject to Section 1.5, the Secured
Investor Notes shall be secured by the Membership Interest Pledge Agreement
substantially in the form attached hereto as Exhibit C, as the same may be
amended from time to time (the “Pledge Agreement”). Initially, only the Secured
Investor Notes will be secured by the Pledge Agreement pursuant to the terms and
conditions of the Pledge Agreement, the Secured Investor Notes and this
Agreement, but the Investor Notes may become secured subsequent to the Closing
(as defined below) by such collateral and at such time as determined by Investor
in its sole discretion. The Purchase Price, the Warrants and the OID (as defined
herein) are allocated to the Tranches (as defined in the Note) of the Note as
set forth in the table attached hereto as Exhibit D.

 

1.2. Form of Payment. On the Closing Date, (i) Investor shall pay the Purchase
Price to Company by delivering the following at the Closing: (A) the Initial
Cash Purchase Price, which shall be delivered by wire transfer of immediately
available funds to Company, in accordance with Company’s written wiring
instructions; (B) Secured Investor Note #1 in the principal amount of $62,500.00
duly executed and substantially in the form attached hereto as Exhibit E
(“Secured Investor Note #1”); (C) Secured Investor Note #2 in the principal
amount of $62,500.00 duly executed and substantially in the form attached hereto
as Exhibit E (“Secured Investor Note #2”, and together with Secured Investor
Note #1, the “Secured Investor Notes”); (D) Investor Note #3 in the principal
amount of $62,500.00 duly executed and substantially in the form attached hereto
as Exhibit F (“Investor Note #3”); (E) Investor Note #4 in the principal amount
of $62,500.00 duly executed and substantially in the form attached hereto as
Exhibit F (“Investor Note #4”); (F) Investor Note #5 in the principal amount of
$62,500.00 duly executed and substantially in the form attached hereto as
Exhibit F (“Investor Note #5”); and (G) Investor Note #6 in the principal amount
of $62,500.00 duly executed and substantially in the form attached hereto as
Exhibit F (“Investor Note #6”, and together with Investor Note #3, Investor Note
#4, and Investor Note #5, the “Investor Notes”); and (ii) Company shall deliver
the duly executed Note and Warrants on behalf of Company, to Investor, against
delivery of the Purchase Price.

 

1.3. Closing Date. Subject to the satisfaction (or written waiver) of the
conditions set forth in Section 5 and Section 6 below, the date and time of the
issuance and sale of the Securities pursuant to this Agreement (the “Closing
Date”) shall be 5:00 p.m., Eastern Time on or about July 1, 2014, 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 the offices of
Investor unless otherwise agreed upon by the parties.

 

 

 

 

1.4. Collateral for the Note. The Note shall be secured by the collateral set
forth in that certain Security Agreement attached hereto as Exhibit G listing
all of the Secured Investor Notes and the Investor Notes as security for
Company’s obligations under the Transaction Documents (the “Security
Agreement”).

 

1.5. Collateral for Secured Investor Notes. At the Closing, Investor shall
execute the Pledge Agreement, thereby granting to Company a security interest in
the collateral described therein (the “Collateral”). Investor also agrees to
file a UCC Financing Statement (Form UCC1) with the Utah Department of Commerce
in the manner set forth in the Pledge Agreement in order to perfect Company’s
security interest in the Collateral. Notwithstanding anything to the contrary
herein or in any other Transaction Document, Investor may, in Investor’s sole
discretion, add additional collateral to the Collateral covered by the Pledge
Agreement, and may substitute Collateral as Investor deems fit, provided that
the net fair market value of the substituted Collateral may not be less than the
aggregate principal balance of the Secured Investor Notes as of the date of any
such substitution. In the event of a substitution of Collateral, Investor shall
timely execute any and all amendments and documents necessary or advisable in
order to properly release the original collateral and grant a security interest
upon the substitute collateral in favor of Company, including without limitation
the filing of an applicable UCC Financing Statement Amendment (Form UCC3) with
the Utah Department of Commerce. Company agrees to sign the documents and take
such other measures requested by Investor in order to accomplish the intent of
the Transaction Documents, including without limitation, execution of a Form
UCC3 (or equivalent) termination statement against the Collateral within five
(5) Trading Days after written request from Investor. Company acknowledges and
agrees that the Collateral may be encumbered by other monetary liens in priority
and/or subordinate positions. The intent of the parties is that the net fair
market value of the Collateral (less any other prior liens or encumbrances) will
be equal to or greater than the aggregate outstanding balance of the Secured
Investor Notes. To the extent the fair market value of the Collateral (less any
other liens or encumbrances) is less than the total outstanding balance of all
the Secured Investor Notes, then the Collateral will be deemed to only secure
those Secured Investor Notes with an aggregate outstanding balance that is less
than or equal to such net fair market value of the Collateral, applied in
numerical order of the Secured Investor Notes. By way of example only, if the
fair market value of the Collateral is determined by appraisal to be $200,000
and the Collateral is encumbered by $100,000 of prior liens, then the net fair
market value for purposes of this section is $100,000 ($200,000 - $100,000).
Accordingly, the Collateral will be deemed to secure only Secured Investor Note
#1, while Secured Investor Note #2 shall be deemed unsecured. If the Collateral
is subsequently appraised for $400,000 with all prior liens removed, then the
Collateral will automatically be deemed to secure Secured Investor Note #1 and
Secured Investor Note #2.

 

1.6. Original Issue Discount; Transaction Expenses. The Note carries an original
issue discount of $30,000.00 (the “OID”). In addition, Company agrees to pay
$5,000.00 to Investor to cover Investor’s legal fees, accounting costs, due
diligence, monitoring and other transaction costs incurred in connection with
the purchase and sale of the Securities (the “Transaction Expense Amount”), all
of which amount is included in the initial principal balance of this Note. The
Purchase Price, therefore, shall be $500,000.00, computed as follows:
$535,000.00 original principal balance, less the OID, less the Transaction
Expense Amount. The Initial Cash Purchase Price shall be the Purchase Price less
the sum of the initial principal amounts of the Secured Investor Notes and the
Investor Notes. The OID and the Transaction Expense Amount allocated to the
Purchase Price are set forth on Exhibit D.

 

2. Investor’s Representations and Warranties. Investor represents and warrants
to Company that: (i) this Agreement has been duly and validly authorized; (ii)
this Agreement constitutes a valid and binding agreement of Investor enforceable
in accordance with its terms; (iii) Investor is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D of the 1933 Act, and (iv) this
Agreement, the Pledge Agreement, the Secured Investor Notes and the Investor
Notes have been duly executed and delivered on behalf of Investor.

 

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3. Representations and Warranties of Company. Company represents and warrants to
Investor that: (i) Company is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted; (ii) Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary;
(iii) Company has registered its Common Stock under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”), and is obligated
to file reports pursuant to Section 13 or Section 15(d) of the 1934 Act; (iv)
each of the Transaction Documents and the transactions contemplated hereby and
thereby, have been duly and validly authorized by Company; (v) this Agreement,
the Note, the Security Agreement, the Warrants, and the other Transaction
Documents have been duly executed and delivered by Company and constitute the
valid and binding obligations of Company enforceable in accordance with their
terms, subject as to enforceability only to general principles of equity and to
bankruptcy, insolvency, moratorium, and other similar laws affecting the
enforcement of creditors’ rights generally; (vi) the execution and delivery of
the Transaction Documents by Company, the issuance of Securities in accordance
with the terms hereof, and the consummation by Company of the other transactions
contemplated by the Transaction Documents do not and will not conflict with or
result in a breach by Company of any of the terms or provisions of, or
constitute a default under (a) Company’s formation documents or bylaws, each as
currently in effect, (b) any indenture, mortgage, deed of trust, or other
material agreement or instrument to which Company is a party or by which it or
any of its properties or assets are bound, including any listing agreement for
the Common Stock, or (c) to Company’s knowledge, any existing applicable law,
rule, or regulation or any applicable decree, judgment, or order of any court,
United States federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over Company or any of Company’s
properties or assets; (vii) no further authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory organization, or
stock exchange or market or the stockholders or any lender of Company is
required to be obtained by Company for the issuance of the Securities to
Investor; (viii) none of Company’s filings with the SEC contained, at the time
they were filed, any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading; (ix) Company has filed all reports, schedules, forms, statements and
other documents required to be filed by Company with the SEC under the 1934 Act
on a timely basis or has received a valid extension of such time of filing and
has filed any such report, schedule, form, statement or other document prior to
the expiration of any such extension; (x) Company is not, nor has it ever been,
a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under
the 1933 Act; (xi) Company has taken no action which would give rise to any
claim by any person or entity for a brokerage commission, placement agent or
finder’s fees or similar payments by Investor relating to the Note or the
transactions contemplated hereby; (xii) except for such fees arising as a result
of any agreement or arrangement entered into by Investor without the knowledge
of Company (an “Investor’s Fee”), Investor shall have no obligation with respect
to such fees or with respect to any claims made by or on behalf of other persons
for fees of a type contemplated in this subsection that may be due in connection
with the transactions contemplated hereby and Company shall indemnify and hold
harmless each of Investor, Investor’s employees, officers, directors,
stockholders, managers, agents, and partners, and their respective affiliates,
from and against all claims, losses, damages, costs (including the costs of
preparation and attorneys’ fees) and expenses suffered in respect of any such
claimed or existing fees (other than an Investor’s Fee, if any), and (xiii) when
issued, each of the Securities (including, without limitation, the Conversion
Shares and the Warrant Shares), will be validly issued, fully paid for and
non-assessable, free and clear of all liens, claims, charges and encumbrances.

 

4. Company Covenants. Until all of Company’s obligations hereunder are paid and
performed in full, or within the timeframes otherwise specifically set forth
below, Company shall comply with the following covenants: (i) from the date
hereof until the date that is six (6) months after all the Conversion Shares and
the Warrant Shares either have been sold by Investor, or may permanently be sold
by Investor without any restrictions pursuant to Rule 144, Company shall timely
make all filings required to be made by it under the 1933 Act, the 1934 Act,
Rule 144 or any United States securities laws and regulations thereof applicable
to Company or by the rules and regulations of its principal trading market, and
such filings shall conform to the requirements of applicable laws, regulations
and government agencies, and, unless such filings are publicly available on the
SEC’s EDGAR system (via the SEC’s web site at no additional charge), Company
shall provide a copy thereof to Investor promptly after such filings; (ii) so
long as Investor beneficially owns any of the Securities and for at least twenty
(20) Trading Days thereafter, Company shall file all reports required to be
filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and shall
take all reasonable action under its control to ensure that adequate current
public information with respect to Company, as required in accordance with Rule
144, is publicly available, and shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination; (iii) the Common Stock
shall be listed or quoted for trading on any of (a) the NYSE Amex, (b) the New
York Stock Exchange, (c) the Nasdaq Global Market, (d) the Nasdaq Capital
Market, (e) the OTC Bulletin Board, (f) the OTCQX, or (g) the OTCQB; (iv) when
issued, each of the Securities (including, without limitation, the Conversion
Shares and the Warrant Shares), will be validly issued, fully paid for and
non-assessable, free and clear of all liens, claims, charges and encumbrances,
(iv) Company shall use the net proceeds received hereunder for working capital
and general corporate purposes only; provided, however, Company will not use
such proceeds to pay fees payable (A) to any broker or finder relating to the
offer and sale of the Securities unless such broker, finder, or other party is a
registered investment adviser or registered broker-dealer and such fees are paid
in full compliance with all applicable laws and regulations, or (B) to any other
party relating to any financing transaction effected prior to the date hereof;
and (v) from and after the date hereof and until all of Company’s obligations
hereunder and the Note are paid and performed in full, Company shall not
transfer, assign, sell, pledge, hypothecate or otherwise alienate or encumber
the Secured Investor Notes or the Investor Notes in any way without the prior
written consent of Investor.

 

5. Conditions to Company’s Obligation to Sell. The obligation of Company
hereunder to issue and sell the Securities to Investor at the Closing is subject
to the satisfaction, at or before the Closing Date, of each of the following
conditions:

 

5.1. Investor shall have executed this Agreement, the Pledge Agreement, the
Secured Investor Notes, and the Investor Notes, and delivered the same to
Company.

 

5.2. Investor shall have delivered the Initial Cash Purchase Price in accordance
with Section 1.2 above.

 

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6. Conditions to Investor’s Obligation to Purchase. The obligation of Investor
hereunder to purchase the Securities 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 Investor’s sole benefit and
may be waived by Investor at any time in its sole discretion:

 

6.1. Company shall have executed this Agreement and delivered the same to
Investor.

 

6.2. Company shall have delivered to Investor the duly executed Note and
Warrants in accordance with Section 1.2 above.

 

6.3. Company shall have executed and delivered to Investor the Pledge Agreement.

 

6.4. The Irrevocable Letter of Instructions to Transfer Agent shall have been
delivered to and acknowledged in writing by Company’s transfer agent (the
“Transfer Agent”) substantially in the form attached hereto as Exhibit H.

 

6.5. Company shall have delivered to Investor a fully executed Secretary’s
Certificate evidencing Company’s approval of the Transaction Documents
substantially in the form attached hereto as Exhibit I.

 

6.6. Company shall have delivered to Investor a fully executed Share Issuance
resolution to be delivered to the Transfer Agent substantially in the form
attached hereto as Exhibit J.

 

6.7. Company shall have delivered to Investor fully executed copies of the
Security Agreement and all other Transaction Documents required to be executed
by Company herein or therein.

 

7. Reservation of Shares. At all times during which the Note is convertible or
the Warrants are exercisable, Company will reserve from its authorized and
unissued Common Stock to provide for the issuance of Common Stock upon the full
conversion of the Note and full exercise of the Warrants. Company will at all
times reserve at least three times the higher of (i) the Outstanding Balance (as
defined in and determined pursuant to the Note) divided by the Lender Conversion
Price (as defined in and determined pursuant to the Note), and (ii) the
Outstanding Balance divided by the Market Price (as defined in and determined
pursuant to the Note) (the “Share Reserve”), but in any event not less than
21,250,000 shares of Common Stock shall be reserved at all times for such
purpose (the “Transfer Agent Reserve”). Company further agrees that it will
cause the Transfer Agent to immediately add shares of Common Stock to the
Transfer Agent Reserve in increments of 1,000,000 shares as and when requested
by Investor in writing from time to time, provided that such incremental
increases do not cause the Transfer Agent Reserve to exceed the Share Reserve.
In furtherance thereof, from and after the date hereof and until such time that
the Note has been paid in full and the Warrants exercised in full, Company shall
require the Transfer Agent to reserve for the purpose of issuance of Conversion
Shares under the Note and Warrant Shares under the Warrants, a number of shares
of Common Stock equal to the Transfer Agent Reserve. Company shall further
require the Transfer Agent to hold such shares of Common Stock exclusively for
the benefit of Investor and to issue such shares to Investor promptly upon
Investor’s delivery of a conversion notice under the Note or a Notice of
Exercise under the Warrants. Finally, Company shall require the Transfer Agent
to issue shares of Common Stock pursuant to the Note and the Warrants to
Investor out of its authorized and unissued shares, and not the Transfer Agent
Reserve, to the extent shares of Common Stock have been authorized, but not
issued, and are not included in the Transfer Agent Reserve. The Transfer Agent
shall only issue shares out of the Transfer Agent Reserve to the extent there
are no other authorized shares available for issuance and then only with
Investor’s written consent.

 

8. Buyer’s Right of First Refusal to New Issuances. Beginning on the date hereof
and continuing until the date that is one (1) year from the date hereof, Company
shall not enter into any transaction pursuant to Section 3(a)(9) or Section
3(a)(10) of the 1933 Act (a “Variable Security Issuance”), without first
offering Investor a right of first refusal with respect to the same pursuant to
this Section 8.

 

8.1. Notice of Proposed Issuance. Prior to Company undertaking or effectuating
any Variable Security Issuance, Company shall deliver to Investor a written
notice (the “ROFR Issuance Notice”) stating: (a) Company’s bona fide desire to
undertake or effectuate the Variable Security Issuance; (b) the name, address
and phone number of each proposed creditor, recipient, purchaser or other
transferee (“Proposed Transferee”); (c) details regarding Company securities to
be issued, sold or otherwise transferred (including the aggregate number of
shares of Common Stock proposed to be issued to each Proposed Transferee, as
applicable) (the “Offered Securities”); (d) the bona fide cash price or, in
reasonable detail, other consideration for which Company proposes to issue, sell
or otherwise transfer the Offered Securities (the “Offered Price”); and (e)
notice of Investor’s right to exercise its Right of First Refusal (defined
below) with respect to the Offered Securities. Investor shall have a period of
fifteen (15) Trading Days (the “Response Period”) after the date on which the
ROFR Issuance Notice is, pursuant to this subsection, deemed to have been
delivered to Investor, to notify Company whether Investor elects to exercise its
Right of First Refusal with respect to the applicable Offered Securities. If
Investor fails to notify Company of its desire to exercise its Right of First
Refusal with respect to the applicable Offered Securities prior to the
conclusion of the Response Period, Investor shall be deemed not to have
exercised its Right of First Refusal in such specific circumstance. If Investor
elects not to exercise its Right of First Refusal or is deemed to have elected
to not exercise its Right of First Refusal, Company and the proposed parties
shall have a period of sixty (60) calendar days to consummate the proposed
Variable Security Issuance on the terms set forth in the ROFR Issuance Notice.
In such case, if the Right of Frist Refusal Issuance is not consummated within
such period or if the terms of the applicable Variable Security Issuance are
changed prior to the consummation of the Variable Security Issuance, Company
shall again submit the Variable Security Issuance to Investor so that Buyer may
once again exercise its Right of First Refusal in accordance with the terms of
this Section 8 prior to effectuating such Variable Security Issuance.

 

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8.2. Exercising the Right of First Refusal. Investor shall have the right to
purchase all or any part of the Offered Securities on the terms and conditions
set forth in this Section 8 (the “Right of First Refusal”). In order to exercise
its Rights of First Refusal hereunder, Investor must deliver written notice to
Company within the Response Period stating Investor’s intent to exercise its
right hereunder and the Offered Securities it desires to purchase pursuant to
such right (“Election to Purchase”).

 

8.3. Purchase Price. The purchase price for the Offered Securities to be
purchased by Investor under its Right of First Refusal (the “Right of First
Refusal Purchase Price”) will be the Offered Price, and will be payable as set
forth in Section 8.4 below. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration will be
determined by Investor in its sole discretion, which determination will be
binding upon Company, absent fraud or error.

 

8.4. Closing; Payment. Subject to compliance with applicable state and federal
securities laws, Investor and Company shall effect the purchase of all or any
portion of the Offered Securities, including the payment of the Right of First
Refusal Purchase Price therefor, within ten (10) Trading Days after the delivery
of the Election to Purchase (the “Right of First Refusal Closing”). Payment of
the Right of First Refusal Purchase Price will be made, at the option of
Investor in writing, (a) in cash (by cashiers or bank certified check), (b) by
wire transfer, (c) by offset of all or a portion of any outstanding indebtedness
owed by Company to Investor, or (d) by any combination of the foregoing.
Investor may elect to transfer the Right of First Refusal Purchase Price into an
escrow account pending issuance of such purchased securities. The date that the
Right of First Refusal Purchase Price is delivered to Company, or the escrow
agent, as applicable, or the date that Investor elects to offset the Right of
First Refusal Purchase Price by outstanding indebtedness, shall be considered
the date of the Right of First Refusal Closing. To the extent the Offered
Securities purchased by Investor hereunder constitute shares of Common Stock,
Company shall deliver to Investor such purchased Common Stock in the same manner
as Conversion Shares, and should Company fail to so deliver such shares of
Common Stock at or before the Right of First Refusal Closing as required
hereunder, Company shall be subject to the penalties for non-delivery of Lender
Conversion Shares (as defined in the Note).

 

9. Miscellaneous. The provisions set forth in this Section 9 shall apply to this
Agreement, as well as all other Transaction Documents as if these terms were
fully set forth therein.

 

9.1. Cross Default. Any Event of Default (as defined in the Note) by Company
under the Note shall be deemed a default under this Agreement, and any default
by Company under this Agreement will be deemed an Event of Default under the
Note.

 

9.2. Governing Law; Venue. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Utah for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each party consents to and expressly agrees that
venue for Arbitration (as defined in Exhibit K) of any dispute arising out of or
relating to any Transaction Document or the relationship of the parties or their
affiliates shall be in Salt Lake County or Utah County, Utah; provided, however,
that notwithstanding anything herein to the contrary, enforcement of Investor’s
rights under the Security Agreement will occur in accordance with the Uniform
Commercial Code of the applicable state(s) under the Security Agreement and
enforcement of Company’s rights over the Collateral will occur in accordance
with the laws of the state in which the Collateral is located). Without
modifying the parties obligations to resolve disputes hereunder pursuant to the
Arbitration Provisions (as defined below), for any litigation arising in
connection with any of the Transaction Documents, each party hereto hereby (a)
consents to and expressly submits to the exclusive personal jurisdiction of any
state or federal court sitting in Salt Lake County, Utah, (b) expressly submits
to the venue of any such court for the purposes hereof, and (c) waives any claim
of improper venue and any claim or objection that such courts are an
inconvenient forum or any other claim or objection to the bringing of any such
proceeding in such jurisdictions or to any claim that such venue of the suit,
action or proceeding is improper.

 

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9.3. Arbitration of Claims. The parties shall submit all Claims (as defined in
Exhibit K) arising under this Agreement or any other Transaction Document or
other agreements between the parties and their affiliates to binding arbitration
pursuant to the arbitration provisions set forth in Exhibit K attached hereto
(the “Arbitration Provisions”). The parties hereby acknowledge and agree that
the Arbitration Provisions are unconditionally binding on the parties hereto and
are severable from all other provisions of this Agreement. Any capitalized term
not defined in the Arbitration Provisions shall have the meaning set forth in
this Agreement. By executing this Agreement, Company represents, warrants and
covenants that Company has reviewed the Arbitration Provisions carefully,
consulted with legal counsel about such provisions (or waived its right to do
so), understands that the Arbitration Provisions are intended to allow for the
expeditious and efficient resolution of any dispute hereunder, agrees to the
terms and limitations set forth in the Arbitration Provisions, and that Company
will not take a position contrary to the foregoing representations. Company
acknowledges and agrees that Investor may rely upon the foregoing
representations and covenants of Company regarding the Arbitration Provisions.

 

9.4. Counterparts. Each Transaction Document may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. The parties hereto confirm that any
electronic copy of another party’s executed counterpart of a Transaction
Document (or such party’s signature page thereof) will be deemed to be an
executed original thereof.

 

9.5. Headings. The headings of this Agreement are for convenience of reference
only and shall not form part of, or affect the interpretation of, this
Agreement.

 

9.6. 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 to 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.

 

9.7. Entire Agreement; Amendments. This Agreement and the instruments and
exhibits 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 Company nor Investor 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 parties hereto.

 

9.8. Notices. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of: (a) the date delivered, if delivered by personal
delivery as against written receipt therefor or by email to an executive
officer, or by facsimile (with successful transmission confirmation), (b) the
earlier of the date delivered or the third Trading Day after deposit, postage
prepaid, in the United States Postal Service by certified mail, or (c) the
earlier of the date delivered or the third Trading Day after mailing by express
courier, with delivery costs and fees prepaid, in each case, addressed to each
of the other parties thereunto entitled at the following addresses (or at such
other addresses as such party may designate by five (5) calendar days’ advance
written notice similarly given to each of the other parties hereto):

 

If to Company:

 

OSL Holdings Inc.

Attn: Robert H Rothenberg, Jr.

1669 Edgewood Road, Suite 214

Yardley, Pennsylvania 19067

 

With a copy to (which copy shall not constitute notice):

 

Legal & Compliance, LLC

Attn: Laura Anthony

330 Clematis Street, Suite 217

West Palm Beach, Florida 33401

 

If to Investor:

 

Typenex Co-Investment, LLC

Attn: John Fife

303 East Wacker Drive, Suite 1200

Chicago, Illinois 60601

 

With a copy to (which copy shall not constitute notice):

 

Hansen Black Anderson Ashcraft PLLC

Attn: Jonathan K. Hansen

2940 West Maple Loop, Suite 103

Lehi, Utah 84043

 

6

 

 

9.9. Successors and Assigns. This Agreement or any of the severable rights and
obligations inuring to the benefit of or to be performed by Investor hereunder
may be assigned by Investor to a third party, including its financing sources,
in whole or in part, without the need to obtain Company’s consent thereto.
Company may not assign its rights or obligations under this Agreement or
delegate its duties hereunder without the prior written consent of Investor.

 

9.10. Survival. The representations and warranties of Company and the agreements
and covenants set forth in this Agreement shall survive the Closing hereunder
notwithstanding any due diligence investigation conducted by or on behalf of
Investor. Company agrees to indemnify and hold harmless Investor and all its
officers, directors, employees, attorneys, and agents for loss or damage arising
as a result of or related to any breach or alleged breach by 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.

 

9.11. Publicity. Company and Investor shall have the right to review a
reasonable period of time before issuance of any press releases by the other
party with respect to the transactions contemplated hereby.

 

9.12. 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.

 

9.13. Investor’s Rights and Remedies Cumulative; Liquidated Damages. All rights,
remedies, and powers conferred in this Agreement and the Transaction Documents
are cumulative and not exclusive of any other rights or remedies, and shall be
in addition to every other right, power, and remedy that Investor may have,
whether specifically granted in this Agreement or any other Transaction
Document, or existing at law, in equity, or by statute, and any and all such
rights and remedies may be exercised from time to time and as often and in such
order as Investor may deem expedient. The parties acknowledge and agree that
upon Company’s failure to comply with the provisions of the Transaction
Documents, Investor’s damages would be uncertain and difficult (if not
impossible) to accurately estimate because of the parties’ inability to predict
future interest rates and future share prices, Investor’s increased risk, and
the uncertainty of the availability of a suitable substitute investment
opportunity for Investor, among other reasons. Accordingly, any fees, charges,
and default interest due under the Note, the Warrants, and the other Transaction
Documents are intended by the parties to be, and shall be deemed, liquidated
damages (under Company’s and Investor’s expectations that any such liquidated
damages will tack back to the Closing Date for purposes of determining the
holding period under Rule 144). The parties agree that such liquidated damages
are a reasonable estimate of Investor’s actual damages and not a penalty, and
shall not be deemed in any way to limit any other right or remedy Investor may
have hereunder, at law or in equity. The parties acknowledge and agree that
under the circumstances existing at the time this Agreement is entered into,
such liquidated damages are fair and reasonable and are not penalties. All fees,
charges, and default interest provided for in the Transaction Documents are
agreed to by the parties to be based upon the obligations and the risks assumed
by the parties as of the Closing Date and are consistent with investments of
this type. The liquidated damages provisions of the Transaction Documents shall
not limit or preclude a party from pursuing any other remedy available at law or
in equity; provided, however, that the liquidated damages provided for in the
Transaction Documents are intended to be in lieu of actual damages.

 

9.14. Ownership Limitation. Notwithstanding anything to the contrary contained
in this Agreement or the other Transaction Documents, if at any time Investor
shall or would be issued shares of Common Stock under any of the Transaction
Documents, but such issuance would cause Investor (together with its affiliates)
to beneficially own a number of shares exceeding the Maximum Percentage (as
defined in the Note), then Company must not issue to Investor the shares that
would cause Investor to exceed the Maximum Percentage. The shares of Common
Stock issuable to Investor that would cause the Maximum Percentage to be
exceeded are referred to herein as the “Ownership Limitation Shares”. Company
will reserve the Ownership Limitation Shares for the exclusive benefit of
Investor. From time to time, Investor may notify Company in writing of the
number of the Ownership Limitation Shares that may be issued to Investor without
causing Investor to exceed the Maximum Percentage. Upon receipt of such notice,
Company shall be unconditionally obligated to immediately issue such designated
shares to Investor, with a corresponding reduction in the number of the
Ownership Limitation Shares. For purposes of this Section, beneficial ownership
of Common Stock will be determined under Section 13(d) of the 1934 Act.

 

7

 

 

9.15. Attorneys’ Fees and Cost of Collection. In the event of any arbitration or
action at law or in equity to enforce or interpret the terms of this Agreement
or any of the other Transaction Documents, the parties agree that the party who
is awarded the most money shall be deemed the prevailing party for all purposes
and shall therefore be entitled to an additional award of the full amount of the
attorneys’ fees, deposition costs, and expenses paid by such prevailing party in
connection with arbitration or litigation without reduction or apportionment
based upon the individual claims or defenses giving rise to the fees and
expenses. Nothing herein shall restrict or impair an arbitrator’s or a court’s
power to award fees and expenses for frivolous or bad faith pleading. If (a) the
Note or a Warrant is placed in the hands of an attorney for collection or
enforcement prior to commencing arbitration or legal proceedings, or is
collected or enforced through any arbitration or legal proceeding, or Investor
otherwise takes action to collect amounts due under the Note or to enforce the
provisions of the Note or any Warrant; or (b) there occurs any bankruptcy,
reorganization, receivership of Company or other proceedings affecting Company’s
creditors’ rights and involving a claim under the Note or any Warrant; then
Company shall pay the costs incurred by Investor for such collection,
enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’
fees, expenses, deposition costs, and disbursements.

 

9.16. Waiver. No waiver of any provision of this Agreement shall be effective
unless it is in the form of a writing signed by the party granting the waiver.
No waiver of any provision or consent to any prohibited action shall constitute
a waiver of any other provision or consent to any other prohibited action,
whether or not similar. No waiver or consent shall constitute a continuing
waiver or consent or commit a party to provide a waiver or consent in the future
except to the extent specifically set forth in writing.

 

9.17. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY
AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY
AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY
APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO
ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY.

 

9.18. Time of the Essence. Time is expressly made of the essence with respect to
each and every provision of this Agreement and the other Transaction Documents.

 

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8

 

 

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

 

SUBSCRIPTION AMOUNT:

 

Principal Amount of Note:  $535,000.00         Initial Cash Purchase Price: 
$125,000.00 

 

  INVESTOR:         Typenex Co-Investment, LLC         By: Red Cliffs
Investments, Inc., its Manager

 

    By: /s/ John M. Fife       John M. Fife, President

 

  COMPANY:         OSL Holdings Inc.         By: /s/ Robert Rothenberg   Name:
Robert Rothenberg   Title: CEO

 

ATTACHED EXHIBITS:

 

Exhibit A Note Exhibit B Warrants Exhibit C Membership Interest Pledge Agreement
Exhibit D Allocation of Purchase Price Exhibit E Form of Secured Investor Note
Exhibit F Form of Investor Note Exhibit G Security Agreement Exhibit H
Irrevocable Transfer Agent Instructions Exhibit I Secretary’s Certificate
Exhibit J Share Issuance Resolution Exhibit K Arbitration Provisions

 

 

 

 

Exhibit K

 

ARBITRATION PROVISIONS

 

1. Dispute Resolution. For purposes of this Exhibit K, the term “Claims” means
any disputes, claims, demands, causes of action, liabilities, damages, losses,
or controversies whatsoever arising from related to or connected with the
transactions contemplated in the Transaction Documents and any communications
between the parties related thereto, including without limitation any claims of
mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure
of consideration, promissory estoppel, unconscionability, failure of condition
precedent, rescission, and any statutory claims, tort claims, contract claims,
or claims to void, invalidate or terminate the Agreement or any of the other
Transaction Documents. The term “Claims” specifically excludes enforcement of
Investor’s rights and remedies against the personal property described in the
Security Agreement under the applicable provisions of the Uniform Commercial
Code. The parties hereby agree that the arbitration provisions set forth in this
Exhibit K (“Arbitration Provisions”) are binding on the parties hereto and are
severable from all other provisions in the Transaction Documents. As a result,
any attempt to rescind the Agreement or declare the Agreement or any other
Transaction Document invalid or unenforceable for any reason is subject to these
Arbitration Provisions. These Arbitration Provisions shall also survive any
termination or expiration of the Agreement.

 

2. Arbitration. Except as otherwise provided herein, all Claims must be
submitted to arbitration (“Arbitration”) to be conducted in Salt Lake County,
Utah or Utah County, Utah and pursuant to the terms set forth in these
Arbitration Provisions. The parties agree that the award of the arbitrator shall
be final and binding upon the parties; shall be the sole and exclusive remedy
between them regarding any Claims, counterclaims, issues, or accountings
presented or pleaded to the arbitrator; and shall promptly be payable in United
States dollars free of any tax, deduction or offset (with respect to monetary
awards). Any costs or fees, including without limitation attorneys’ fees,
incident to enforcing the arbitrator’s award shall, to the maximum extent
permitted by law, be charged against the party resisting such enforcement. The
award shall include Default Interest (as defined in the Note) both before and
after the award. Judgment upon the award of the arbitrator will be entered and
enforced by a state court sitting in Salt Lake County, Utah. The parties hereby
incorporate herein the provisions and procedures set forth in the Utah Uniform
Arbitration Act, U.C.A. § 78B-11-101 et seq. (as amended or superseded from time
to time, the “Arbitration Act”). Pursuant to Section 78B-11-105 of the
Arbitration Act, in the event of conflict between the terms of these Arbitration
Provisions and the provisions of the Arbitration Act, the terms of these
Arbitration Provisions shall control.

 

3. Arbitration Proceedings. Arbitration between the parties will be subject to
the following procedures:

 

3.1 Pursuant to Section 110 of the Arbitration Act, the parties agree that a
party may initiate Arbitration by giving written notice to the other party
(“Arbitration Notice”) in the same manner that notice is permitted under Section
9.8 of the Agreement; provided, however, that the Arbitration Notice may not be
given by email or fax. Arbitration will be deemed initiated as of the date that
the Arbitration Notice is deemed delivered under Section 9.8 of the Agreement
(the “Service Date”). After the Service Date, information may be delivered, and
notices may be given, by email or fax pursuant to Section 9.8 of the Agreement
or any other method permitted thereunder. The Arbitration Notice must describe
the nature of the controversy, the remedies sought, and the election to commence
Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded
consistent with the Utah Rules of Civil Procedure.

 

3.2 Within ten (10) calendar days after the Service Date, Investor shall select
and submit to Company the names of three arbitrators that are designated as
“neutrals” or qualified arbitrators by Utah ADR Services
(http://www.utahadrservices.com) (such three designated persons hereunder are
referred to herein as the “Proposed Arbitrators”). For the avoidance of doubt,
each Proposed Arbitrator must be qualified as a “neutral” with Utah ADR
Services. Within ten (10) calendar days after Investor has submitted to Company
the names of the Proposed Arbitrators, Company must select, by written notice to
Investor, one (1) of the Proposed Arbitrators to act as the arbitrator for the
parties under these Arbitration Provisions. If Company fails to select one of
the Proposed Arbitrators in writing within such 10-day period, then Investor may
select the arbitrator from the Proposed Arbitrators by providing written notice
of such selection to Company. If Investor fails to identify the Proposed
Arbitrators within the time period required above, then Company may at any time
prior to Investor designating the Proposed Arbitrators, select the names of
three arbitrators that are designated as “neutrals” or qualified arbitrators by
Utah ADR Service by written notice to Investor. Investor may then, within ten
(10) calendar days after Company has submitted notice of its selected
arbitrators to Investor, select, by written notice to Company, one (1) of the
selected arbitrators to act as the arbitrator for the parties under these
Arbitration Provisions. If Investor fails to select in writing and within such
10-day period one of the three arbitrators selected by Company, then Company may
select the arbitrator from its three previously selected arbitrators by
providing written notice of such selection to Investor. Subject to Paragraph
3.12 below, the cost of the arbitrator must be paid equally by both parties;
provided, however, that if one party refuses or fails to pay its portion of the
arbitrator fee, then the other party can advance such unpaid amount (subject to
the accrual of Default Interest thereupon), with such amount added to or
subtracted from, as applicable, the award granted by the arbitrator. If Utah ADR
Services ceases to exist or to provide a list of neutrals, then the arbitrator
shall be selected under the then prevailing rules of the American Arbitration
Association. The date that the selected arbitrator agrees in writing to serve as
the arbitrator hereunder is referred to herein as the “Arbitration Commencement
Date”.

 

Arbitration Provisions, Page 1

 

 

 

 

3.3 An answer and any counterclaims to the Arbitration Notice, which must be
pleaded consistent with the Utah Rules of Civil Procedure, shall be required to
be delivered to the other party within twenty (20) calendar days after the
Service Date. Upon request, the arbitrator is hereby instructed to render a
default award, consistent with the relief requested in the Arbitration Notice,
against a party that fails to submit an answer within such time period.

 

3.4 The party that delivers the Arbitration Notice to the other party shall have
the option to also commence legal proceedings with any state court sitting in
Salt Lake County, Utah (“Litigation Proceedings”), subject to the following: (i)
the complaint in the Litigation Proceedings is to be substantially similar to
the claims set forth in the Arbitration Notice, provided that an additional
cause of action to compel arbitration will also be included therein, (ii) so
long as the other party files an answer to the complaint in the Litigation
Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings
will be stayed pending an award of the arbitrator hereunder, (iii) if the other
party fails to file an answer in the Litigation Proceedings or an answer in the
Arbitration Proceedings, then the party initiating Arbitration shall be entitled
to a default judgment consistent with the relief requested, to be entered in the
Litigation Proceedings, and (iv) any legal or procedural issue arising under the
Arbitration Act that requires a decision of a court of competent jurisdiction
may be determined in the Litigation Proceedings. Any award of the arbitrator may
be entered in such Litigation Proceedings pursuant to the Arbitration Act.

 

3.5 Pursuant to Section 118(8) of the Arbitration Act, the parties agree that
discovery shall be conducted in accordance with the Utah Rules of Civil
Procedure; provided, however, that incorporation of such rules will in no event
supersede the Arbitration Provisions set forth herein, including without
limitation the time limitation set forth in Paragraph 3.9 below, and the
following:

 

(a) Discovery will only be allowed if the likely benefits of the proposed
discovery outweigh the burden or expense, and the discovery sought is likely to
reveal information that will satisfy a specific element of a claim or defense
already pleaded in the Arbitration. The party seeking discovery shall always
have the burden of showing that all of the standards and limitations set forth
in these Arbitration Provisions are satisfied. The scope of discovery in the
Arbitration proceedings shall also be limited as follows:

 

(i) To facts directly connected with the transactions contemplated by the
Agreement.

 

(ii) To facts and information that cannot be obtained from another source that
is more convenient, less burdensome or less expensive.

 

(c) No party shall be allowed (a) more than fifteen (15) interrogatories
(including discrete subparts), (b) more than fifteen (15) requests for admission
(including discrete subparts), (c) more than ten (10) document requests
(including discrete subparts), or (d) more than three depositions (excluding
expert depositions) for a maximum of seven (7) hours per deposition.

 

3.6 Any party submitting any written discovery requests, including
interrogatories, requests for production, subpoenas to a party or a third party,
or requests for admissions, must prepay the estimated attorneys’ fees and costs,
as determined by the arbitrator, before the responding party has any obligation
to produce or respond.

 

(a) All discovery requests must be submitted in writing to the arbitrator and
the other party before issuing or serving such discovery requests. The party
issuing the written discovery requests must include with such discovery requests
a detailed explanation of how the proposed discovery requests satisfy the
requirements of these Arbitration Provisions and the Utah Rules of Civil
Procedure. Any party will then be allowed, within ten (10) calendar days of
receiving the proposed discovery requests, to submit to the arbitrator an
estimate of the attorneys’ fees and costs associated with responding to such
written discovery requests and a written challenge to each applicable discovery
request. After receipt of an estimate of attorneys’ fees and costs and/or
challenge(s) to one or more discovery requests, the arbitrator will make a
finding as to the likely attorneys’ fees and costs associated with responding to
the discovery requests and issue an order that (A) requires the requesting party
to prepay the attorneys’ fees and costs associated with responding to the
discovery requests, and (B) requires the responding party to respond to the
discovery requests as limited by the arbitrator within a certain period of time
after receiving payment from the requesting party. If a party entitled to submit
an estimate of attorneys’ fees and costs and/or a challenge to discovery
requests fails to do so within such 10-day period, the arbitrator will make a
finding that (A) there are no attorneys’ fees or costs associated with
responding to such discovery requests, and (B) the responding party must respond
to such discovery requests (as may be limited by the arbitrator) within a
certain period of time as determined by the arbitrator.

 

(b) In order to allow a written discovery request, the arbitrator must find that
the discovery request satisfies the standards set forth in these Arbitration
Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly
enforce these standards. If a discovery request does not satisfy any of the
standards set forth in these Arbitration Provisions or the Utah Rules of Civil
Procedure, the arbitrator may modify such discovery request to satisfy the
applicable standards, or strike such discovery request in whole or in part.

 

Arbitration Provisions, Page 2

 

 

 

 

(c) Discovery deadlines will be set forth in a scheduling order issued by the
arbitrator. The parties hereby authorize and direct the arbitrator to take such
actions and make such rulings as may be necessary to carry out the parties’
intent for the arbitration proceedings to be efficient and expeditious.

 

3.7 Each party may submit expert reports (and rebuttals thereto), provided that
such reports must be submitted by the deadlines established by the arbitrator.
Expert reports must contain the following: (a) a complete statement of all
opinions the expert will offer at trial and the basis and reasons for them; (b)
the expert’s name and qualifications, including a list of all publications
within the preceding 10 years, and a list of any other cases in which the expert
has testified at trial or in a deposition or prepared a report within the
preceding 10 years; and (c) the compensation to be paid for the expert’s study
and testimony. The parties are entitled to depose any other party’s expert
witness one time for no more than 4 hours. An expert may not testify in a
party’s case-in-chief concerning any matter not fairly disclosed in the expert
report.

 

3.8 All information disclosed by either party during the Arbitration process
(including without limitation information disclosed during the discovery
process) shall be considered confidential in nature. Each party agrees not to
disclose any confidential information received from the other party during the
discovery process unless (i) prior to or after the time of disclosure such
information becomes public knowledge or part of the public domain, not as a
result of any inaction or action of the receiving party, (ii) such information
is required by a court order, subpoena or similar legal duress to be disclosed
if such receiving party has notified the other party thereof in writing and
given it a reasonable opportunity to obtain a protective order from a court of
competent jurisdiction prior to disclosure; or (iii) disclosed to the receiving
party’s agents, representatives and legal counsel on a need to know basis who
each agree in writing not to disclose such information to any third party.
Pursuant to Section 118(5) of the Arbitration Act, the arbitrator is hereby
authorized and directed to issue a protective order to prevent the disclosure of
privileged information and confidential information upon the written request of
either party.

 

3.9 The parties hereby authorize and direct the arbitrator to take such actions
and make such rulings as may be necessary to carry out the parties’ intent for
the arbitration proceedings to be efficient and expeditious. Pursuant to Section
120 of the Arbitration Act, the parties hereby agree that an award of the
arbitrator must be made within 150 days after the Arbitration Commencement Date.
The arbitrator is hereby authorized and directed to hold a scheduling conference
within ten (10) calendar days after the Arbitration Commencement Date in order
to establish a scheduling order with various binding deadlines for discovery,
expert testimony, and the submission of documents by the parties to enable the
arbitrator to render a decision prior to the end of such 150-day period. The
Utah Rules of Evidence will apply to any final hearing before the arbitrator.

 

3.10 The arbitrator shall have the right to award or include in the arbitrator’s
award any relief which the arbitrator deems proper under the circumstances,
including, without limitation, specific performance and injunctive relief,
provided that the arbitrator may not award exemplary or punitive damages.

 

3.11 If any part of these Arbitration Provisions is found to violate applicable
law or to be illegal, then such provision shall be modified to the minimum
extent necessary to make such provision enforceable under applicable law.

 

3.12 The arbitrator is hereby directed to require the losing party to (i) pay
the full amount of the costs and fees of the arbitrator, and (ii) reimburse the
prevailing party the reasonable attorneys’ fees, arbitrator costs, deposition
costs, and other discovery costs incurred by the prevailing party.

 

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Arbitration Provisions, Page 3