ISSUANCE AGREEMENT

 

ISSUANCE AGREEMENT (the “Agreement”) dated as of May 2, 2017, is entered into by
and among Paradox Capital Partners LLC (“Paradox”), Quest Document Solutions LLC
(“Quest”), and Orbital Tracking Corp. (the “Company” and, collectively with
Paradox and Quest, the “Parties”).

 

WHEREAS, the Company and Paradox entered into a settlement agreement and release
dated January 28, 2015 (the “Paradox Settlement Agreement”), pursuant to which,
among other things, the Company agreed that, if it issued securities in a
financing in which the Company receives aggregate gross proceeds of at least
$100,000 (a “Qualified Financing”), Paradox would be entitled to receive, in
addition to 943,500 common stock equivalents issued under the Paradox Settlement
Agreement, such securities that are offered or provided upon the same terms and
conditions to the investors in the Qualified Financing as if it had invested
$47,175 in the Qualified Financing (the “Paradox Anti-Dilution Securities”);

 

WHEREAS, the Company and Quest entered into a settlement agreement and release
dated January 28, 2015 (the “Quest Settlement Agreement” and, together with the
Paradox Settlement Agreement, the “Settlement Agreements”), pursuant to which,
among other things, the Company agreed that, if it issued securities in a
Qualified Financing, Quest would be entitled to receive, in addition to the
730,930 common stock equivalents issued under the Quest Settlement Agreement,
such securities that are offered or provided upon the same terms and conditions
to the investors in the Qualified Financing as if it had invested $36,546.27 in
the Qualified Financing (the “Quest Anti-Dilution Securities” and, together with
the Paradox Anti-Dilution Securities, the “Anti-Dilution Securities”);

 

WHEREAS, Paradox and Quest are affiliated entities under common control;

 

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

 

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

 

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

 

  1. Payment by the Company. The Company will issue to Paradox upon closing of
its offering of Series J Preferred Stock, shares of its newly designated Series
K Preferred Stock that shall be convertible into an aggregate of 6,697,680
shares of common stock (the “Settlement Securities”).         2. Waiver and
Release by Paradox and Quest. Paradox and Quest each hereby waive the further
issuance of any Anti-Dilution Securities under the Agreements. In addition to,
and not in limitation of the foregoing sentence, each of Paradox and Quest, on
behalf of themselves, their predecessors, successors, direct and indirect parent
companies, direct and indirect subsidiary companies, companies under common
control with any of the foregoing, affiliates and assigns, and its and their
past, present, and future officers, directors, shareholders, interest holders,
members, partners, attorneys, agents, employees, managers, representatives,
assigns, and successors in interest, and all persons acting by, through, under,
or in concert with them, and each of them, hereby release and discharge the
Company, together with their predecessors, successors, direct and indirect
parent companies, direct and indirect subsidiary companies, companies under
common control with any of the foregoing, affiliates and assigns and its and
their past, present, and future officers, directors, shareholders, interest
holders, members, partners, attorneys, agents, employees, managers,
representatives, assigns and successors in interest, and all persons acting by,
through, under or in concert with them, and each of them, from all known and
unknown charges, complaints, claims, grievances, liabilities, obligations,
promises, agreements, controversies, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts, penalties, fees, wages, medical costs,
pain and suffering, mental anguish, emotional distress, expenses (including
attorneys’ fees and costs actually incurred), and punitive damages, of any
nature whatsoever, known or unknown, which Paradox or Quest has, or may have
had, against the Company, whether or not apparent or yet to be discovered, or
which may hereafter develop, for any acts or omissions related to or arising
from the Settlement Agreements, including the issuance of any securities in
connection with the 2016 Financing.

 

 1 

 

 

  3. Release by Company. The Company, on behalf of itself, its predecessors,
successors, direct and indirect parent companies, direct and indirect subsidiary
companies, companies under common control with any of the foregoing, affiliates
and assigns, and its and their past, present, and future officers, directors,
shareholders, interest holders, members, partners, attorneys, agents, employees,
managers, representatives, assigns, and successors in interest, and all persons
acting by, through, under, or in concert with them, and each of them, hereby
release and discharge Paradox and Quest, together with their predecessors,
successors, direct and indirect parent companies, direct and indirect subsidiary
companies, companies under common control with any of the foregoing, affiliates
and assigns and its and their past, present, and future officers, directors,
shareholders, interest holders, members, partners, attorneys, agents, employees,
managers, representatives, assigns and successors in interest, and all persons
acting by, through, under or in concert with them, and each of them, from all
known and unknown charges, complaints, claims, grievances, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts, penalties, fees, wages,
medical costs, pain and suffering, mental anguish, emotional distress, expenses
(including attorneys’ fees and costs actually incurred), and punitive damages,
of any nature whatsoever, known or unknown, which he Company and such persons
has, or may have had, against Paradox, Quest and such persons, whether or not
apparent or yet to be discovered, or which may hereafter develop, for any acts
or omissions related to or arising from the Settlement Agreements.         4.
Accredited Investor Representation. Paradox and Quest represent and warrants
that they are “accredited investors,” as such term is defined in Rule 501 of
Regulation D promulgated under the Securities Act, and it is able to bear the
economic risk of an investment in the Company’s securities.         5. Rule 144
Acknowledgments. Pursuant to Rule 144 promulgated by the Securities and Exchange
Commission (the “Commission”) pursuant to the Securities Act and the rules and
regulations promulgated thereunder as such Rule 144 may be amended from time to
time, or any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule 144, the holding period of the
Settlement Securities tacks back to January 28, 2015, the date of the Settlement
Agreements. The Company agrees not to take a position contrary to this
paragraph.         6. Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of Paradox contained herein, the offer and
issuance by the Company of the Settlement Securities is exempt from registration
under the Securities Act. The offer and issuance of the Settlement Securities is
exempt from registration under the Securities Act pursuant to the exemption
provided by Section 3(a)(9) thereof. The Company covenants and represents to
Paradox that neither the Company nor any of its subsidiaries has received,
anticipates receiving, has any agreement to receive or has been given any
promise to receive any consideration from Paradox, Quest or any other party in
connection with the transactions contemplated by this Agreement.

 

 2 

 

 

  7. Agreement is Legally Binding. The Parties intend this Agreement to be
legally binding upon and shall inure to the benefit of each of them and their
respective successors, assigns, executors, administrators, heirs and estates.
Moreover, the persons and entities referred to in paragraphs 2 and 3 above, but
not a Party, are third-party beneficiaries of this Agreement.         8. Entire
Agreement. The recitals set forth at the beginning of this Agreement are
incorporated by reference and made a part of this Agreement. This Agreement
constitutes the entire agreement and understanding of the Parties and supersedes
all prior negotiations and/or agreements, proposed or otherwise, written or
oral, concerning the subject matter hereof. Furthermore, no modification of this
Agreement shall be binding unless in writing and signed by each of the parties
hereto.         9. New or Different Facts: No Effect. Except as provided herein,
this Agreement shall be, and remain, in effect despite any alleged breach of
this Agreement or the discovery or existence of any new or additional fact, or
any fact different from that which either Party now knows or believes to be
true. Notwithstanding the foregoing, nothing in this Agreement shall be
construed as, or constitute, a release of any Party’s rights to enforce the
terms of this Agreement.         10. Interpretation. Should any provision of
this Agreement be declared or be determined by any court to be illegal or
invalid, the validity of the remaining parts, terms or provisions shall not be
affected thereby and said illegal or invalid part, term or provision shall be
deemed not to be a part of this Agreement. The headings within this Agreement
are purely for convenience and are not to be used as an aid in interpretation.
Moreover, this Agreement shall not be construed against Party as the author or
drafter of the Agreement.         11. Governing Law and Choice of Forum. This
Agreement, the construction, interpretation, and enforcement hereof, and the
rights of the Parties with respect to all matters arising hereunder or related
hereto shall be determined under, governed by, and construed in accordance with
the laws of the State of New York, without regard to the principles of conflicts
of laws. Any action to enforce this Agreement shall be brought only in the
Borough of Manhattan, New York, New York.         12. Waiver and Reliance on
Representations. The Company has obtained independent legal counsel regarding
the advisability of entry into this Agreement and the matters herein,
acknowledges and agrees that it has been informed that Harvey Kesner, the
control person of Paradox and Quest, is associated with counsel to the Company
and hereby waives any and all conflicts, including the appearance of conflict,
that could exist or arise with respect thereto. The Parties represent and
acknowledge that in executing this Agreement they did not rely, and have not
relied, upon any representation or statement, whether oral or written, made by
the other Party or by that other Party’s agents, representatives or attorneys
with regard to the subject matter, basis or effect of this Agreement or
otherwise.         13. Counterparts. This Agreement may be executed by the
Parties in counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.         14.
Authority to Execute Agreement. By signing below, each Party warrants and
represents that the person signing this Agreement on its behalf has authority to
bind that Party and that the Party’s execution of this Agreement is not in
violation of any By-law, covenants and/or other restrictions placed upon them by
their respective entities.

 

[SIGNATURE PAGE FOLLOWS]

 

 3 

 

 

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

 

ORBITAL TRACKING CORP.         By: /s/ David Phipps                 Name: David
Phipps   Title:  Chief Executive Officer         PARADOX CAPITAL PARTNERS LLC  
      By: /s/ Harvey Kesner   Name: Harvey Kesner   Title:           QUEST
DOCUMENT SOLUTIONS LLC         By: /s/ Harvey Kesner   Name: Harvey Kesner  
Title:    

 

 4