Exhibit 10.20

 

PURCHASE AGREEMENT

 

PURCHASE AGREEMENT (the “Agreement”), dated as of September 21, 2020, by and
between SUNHYDROGEN, INC., a Nevada corporation (the “Company”), and GHS
Investments, LLC, a Nevada limited liability company (the “Investor”).

 

WHEREAS:

 

Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to the Investor, and the Investor wishes to buy from the Company,
up to Four Million Dollars ($4,000,000) of the Company’s registered common
stock, $0.001 par value per share (the “Common Stock”). The shares of Common
Stock to be purchased hereunder are referred to herein as the “Purchase Shares.”

 

NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Investor hereby
agree as follows:

 

1. CERTAIN DEFINITIONS.

 

For purposes of this Agreement, the following terms shall have the following
meanings:

 

(a) “Available Amount” means, initially, Four Million Dollars ($4,000,000) in
the aggregate, which amount shall be reduced by the Purchase Amount each time
the Investor purchases shares of Common Stock pursuant to Section 2 hereof.

 

(b) “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors.

 

(c) “Base Prospectus” means the Company’s final base prospectus, dated July 8,
2020, a preliminary form of which is included in the Registration Statement,
including the documents incorporated by reference therein.

 

(d) “Business Day” means any day on which the Principal Market is open for
trading, including any day on which the Principal Market is open for trading for
a period of time less than the customary time.

   

(e) “Custodian” means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.

 

(f) “DTC” means The Depository Trust Company, or any successor performing
substantially the same function for the Company.

 

(g) “DWAC Shares” means shares of Common Stock that are (i) issued in electronic
form, (ii) freely tradable and transferable and without restriction on resale
and (iii) timely credited by the Company to the Investor’s or its designee’s
specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast
Automated Securities Transfer (FAST) Program, or any similar program hereafter
adopted by DTC performing substantially the same function.

 

(h) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

  

 

 

 

(i) “Initial Prospectus Supplement” means the prospectus supplement of the
Company relating to the Purchase Shares, including the accompanying Base
Prospectus, to be prepared and filed by the Company with the SEC pursuant to
Rule 424(b)(5) under the Securities Act and in accordance with Section 5(a)
hereof, together with all documents and information incorporated therein by
reference.

  

(j) “Material Adverse Effect” means any material adverse effect on (i) the
enforceability of any Transaction Document, (ii) the results of operations,
assets, business or financial condition of the Company, other than any material
adverse effect that resulted exclusively from (A) any change in the United
States or foreign economies or securities or financial markets in general that
does not have a disproportionate effect on the Company taken as a whole, (B) any
change that generally affects the industry in which the Company operates that
does not have a disproportionate effect on the Company, (C) any change arising
in connection with earthquakes, hostilities, acts of war, sabotage or terrorism
or military actions or any escalation or material worsening of any such
hostilities, acts of war, sabotage or terrorism or military actions existing as
of the date hereof, (D) any action taken by the Investor, its affiliates or its
or their successors and assigns with respect to the transactions contemplated by
this Agreement, (E) the effect of any change in applicable laws or accounting
rules that does not have a disproportionate effect on the Company, or (F) any
change resulting from compliance with terms of this Agreement or the
consummation of the transactions contemplated by this Agreement, or (iii) the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document to be performed as of the date of
determination.

 

(k) “Maturity Date” means the six month anniversary of the date of this
Agreement or March 20, 2021.

  

(l) “Person” means an individual or entity including but not limited to any
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.

 

(m) “Principal Market” means the OTC Pink (or any nationally recognized
successor thereto); provided, however, that in the event the Company’s Common
Stock is ever listed or traded on The Nasdaq Capital Market, The Nasdaq Global
Market, The Nasdaq Global Select Market, the New York Stock Exchange, the NYSE
American, or the OTCQX or OTCQB operated by the OTC Markets Group, Inc. (or any
nationally recognized successor to any of the foregoing), then the “Principal
Market” shall mean such other market or exchange on which the Company’s Common
Stock is then listed or traded

 

(n) “Prospectus” means the Base Prospectus, as supplemented from time to time by
any Prospectus Supplement (including the Initial Prospectus Supplement),
including the documents and information incorporated by reference therein.

 

(o) “Prospectus Supplement” means any prospectus supplement to the Base
Prospectus (including the Initial Prospectus Supplement) filed with the SEC
pursuant to Rule 424(b) under the Securities Act in connection with the
transactions contemplated by this Agreement, including the documents and
information incorporated by reference therein.

 

(p) “Purchase Amount” means, with respect to any Purchase, the portion of the
Available Amount to be purchased by the Investor pursuant to Section 2 hereof.

 

(q) “Purchase Date” means, with respect to a Purchase made pursuant to Section
2(a) hereof, the Business Day on which the Investor receives a valid Purchase
Notice in accordance with this Agreement.

 

(r) “Purchase Notice” means, with respect to a Purchase pursuant to Section 2(a)
hereof, an irrevocable written notice from the Company to the Investor,
substantially in the form of Exhibit A hereto, directing the Investor to buy a
specified amount of Purchase Shares (subject to the Purchase Share limitations
contained in Section 2(a) hereof) at the applicable Purchase Price for such
Purchase in accordance with this Agreement. Purchase Notices shall be delivered
between 4PM through 11:59PM (Eastern Time). If the Investor deems that the
Purchase Notice is not compliant according to the terms of this Agreement, then
the Investor shall notify the Company with details of the non-compliance before
9:30AM (Eastern Time) on the next Business Day, and the Purchase Notice shall be
null and void. Otherwise, the Purchase Notice shall be deemed valid by 9:31AM
(Eastern Time).

 

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(s) “Purchase Price” means, with respect to a Purchase made pursuant to Section
2(a) hereof, 90% of the lowest end-of-day VWAP during the Valuation Period.

  

(t) “Registration Statement” means the Company’s registration statement on Form
S-3 (File No. 333-239632), including the documents incorporated by reference
therein.

   

(u) “SEC” means the U.S. Securities and Exchange Commission.

 

(v) “Securities Act” means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

 

(w) “Settlement Date” means the date on which the Company delivers the Purchase
Shares against the payment of the Purchase Price by the Investor, which date
will be one Business Day following the Valuation Period. If the Company fails to
deliver the Purchase Shares on the Settlement Date, then the Purchase Notice is
automatically null and void.

 

(x) “Transaction Documents” means, collectively, this Agreement and the
schedules and exhibits hereto, and each of the other agreements, documents,
certificates and instruments entered into or furnished by the parties hereto in
connection with the transactions contemplated hereby and thereby.

 

(y) “Transfer Agent” means Worldwide Stock Transfer, LLC, or such other Person
who is then serving as the transfer agent for the Company in respect of the
Common Stock.

 

(z) “Valuation Period” means the five (5) consecutive Business Days immediately
preceding the Purchase Date, including the Purchase Date.

 

(aa) “VWAP” means the volume weighted average price of the Common Stock on the
Principal Market, as reported on the Principal Market.

 

2. PURCHASE OF COMMON STOCK.

 

Subject to the terms and conditions set forth in this Agreement, the Company has
the right to sell to the Investor, and the Investor has the obligation to
purchase from the Company, Purchase Shares as follows:

  

(a) Sales of Common Stock. Subject to the satisfaction of all of the conditions
set forth in Sections 6 and 7 hereof (the “Commencement” and the date of
satisfaction of such conditions the “Commencement Date”), at any time commencing
on the Commencement Date and thereafter, the Company shall have the right, but
not the obligation, to direct the Investor, by its delivery to the Investor of a
Purchase Notice from time to time, to purchase a minimum of $10,000 and up to a
maximum of $400,000 of Purchase Shares (the number of Purchase Shares being
determined in accordance with Section 2(b) hereunder) for each Purchase Notice
(subject to the Available Amount, and provided that, the Purchase Amount for any
Purchase will not exceed two times the average of the daily trading dollar
volume of the Common Stock during the 10 Business Days preceding the Purchase
Date), at the Purchase Price on the Purchase Date (each, a “Purchase”). Each
Purchase Notice will set forth the Purchase Price and number of Purchase Shares,
in accordance with the terms of this Agreement. If the Company delivers any
Purchase Notice for a Purchase Amount in excess of the limitations contained
herein, such Purchase Notice shall be void ab initio to the extent of the amount
by which the amount of Purchase Shares set forth in such Purchase Notice exceeds
the amount of Purchase Shares which the Company is permitted to include in such
Purchase Notice in accordance herewith, and the Investor shall have no
obligation to purchase such excess Purchase Shares in respect of such Purchase
Notice; provided, however, that the Investor shall remain obligated to purchase
the amount of Purchase Shares which the Company is permitted to include in such
Purchase Notice. The Company may not deliver more than one Purchase Notice to
the Investor every ten Business Days unless, from time to time, the Company and
the Investor mutually agree to different timing of the delivery Purchase
Notices.

   

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(b) Settlement for Purchase Shares. On each Settlement Date, for each Purchase
hereunder, the Company shall deliver a number of Purchase Shares equal to 112.5%
of the aggregate Purchase Amount for such Purchase divided by the Purchase Price
per share for such Purchase, against payment by the Investor to the Company of
the Purchase Amount with respect to such Purchase (less documented deposit and
clearing fees, if any), as full payment for such Purchase Shares via wire
transfer of immediately available funds. The Company shall not issue any
fraction of a share of Common Stock upon the any Purchase. If any issuance
hereunder would result in the issuance of a fraction of a share of Common Stock,
the Company shall round such fraction of a share of Common Stock up or down to
the nearest whole share. All Purchase Shares issued hereunder will be DWAC
Shares. All payments made under this Agreement shall be made in lawful money of
the United States of America by wire transfer of immediately available funds to
such account as the Company may from time to time designate by written notice in
accordance with the provisions of this Agreement. Whenever any amount expressed
to be due by the terms of this Agreement is due on any day that is not a
Business Day, the same shall instead be due on the next succeeding day that is a
Business Day.

 

(c) Beneficial Ownership Limitation. Notwithstanding anything to the contrary
contained in this Agreement, the Company shall not issue or sell, and the
Investor shall not purchase or acquire, any shares of Common Stock under this
Agreement which, when aggregated with all other shares of Common Stock then
beneficially owned by the Investor and its affiliates (as calculated pursuant to
Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would
result in the beneficial ownership by the Investor and its affiliates of more
than 4.99% of the then issued and outstanding shares of Common Stock (the
“Beneficial Ownership Limitation”). Upon the written or oral request of the
Investor, the Company shall promptly (but not later than one Business Day)
confirm orally or in writing to the Investor the number of shares of Common
Stock then outstanding. The Investor and the Company shall each cooperate in
good faith in the determinations required hereby and the application hereof. The
Investor’s written certification to the Company of the applicability of the
Beneficial Ownership Limitation, and the resulting effect thereof hereunder at
any time, shall be conclusive with respect to the applicability thereof and such
result absent manifest error.

  

3. INVESTOR’S REPRESENTATIONS AND WARRANTIES.

 

The Investor represents and warrants to the Company as of the date hereof and as
of the Commencement Date that:

 

(a) Organization, Authority. Investor is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, with the requisite power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder and thereunder.

 

(b) Investment Purpose. The Investor is acquiring the Purchase Shares as
principal for its own account for investment only and not with a view to or for
distributing or reselling such Purchase Shares or any part thereof in violation
of the Securities Act or any applicable state securities law, has no present
intention of distributing any of such Purchase Shares in violation of the
Securities Act or any applicable state securities law and has no direct or
indirect arrangement or understandings with any other Persons to distribute or
regarding the distribution of such Purchase Shares in violation of the
Securities Act or any applicable state securities law (this representation and
warranty not limiting the Investor’s right to sell the Purchase Shares at any
time pursuant to the Registration Statement described herein or otherwise in
compliance with applicable federal and state securities laws). The Investor is
acquiring the Purchase Shares hereunder in the ordinary course of its business.

 

(c) Accredited Investor Status. The Investor is an “accredited investor” as that
term is defined in Rule 501(a)(3) of Regulation D promulgated under the
Securities Act.

 

(d) Information. The Investor understands that its investment in the Company and
the Purchase Shares involves a high degree of risk including without limitation
the risks set forth in the Registration Statement. The Investor (i) is able to
bear the economic risk of an investment in the Purchase Shares including a total
loss thereof, (ii) has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the proposed
investment in the Purchase Shares, (iii) has had an opportunity to ask questions
of and receive answers from the officers of the Company concerning the financial
condition and business of the Company and others matters related to an
investment in the Purchase Shares, and (iv) has had the opportunity to review
the Registration Statement. Neither such inquiries nor any other due diligence
investigations conducted by the Investor or its representatives shall modify,
amend or affect the Investor’s right to rely on the Company’s representations
and warranties contained in Section 4 below. The Investor has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the Purchase
Shares. The Investor acknowledges and agrees that the Company neither makes nor
has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 4 hereof.

 

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(e) Validity; Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Investor and is a valid and binding
agreement of the Investor enforceable against the Investor in accordance with
its terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

 

(f) No Short Selling. The Investor represents and warrants to the Company that
at no time prior to the date of this Agreement has any of the Investor, its
agents, representatives or affiliates engaged in or effected, in any manner
whatsoever, directly or indirectly, any (i) “short sale” (as such term is
defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock
or (ii) hedging transaction, which establishes a net short position with respect
to the Common Stock.

 

4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to the Investor as of the date hereof and as
of the Commencement Date, that:

 

(a) Organization, Good Standing. The Company is a corporation, validly existing
and in good standing under the laws of Nevada.

 

(b) Authority. The Company has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder. The execution
and delivery of this Agreement by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company.

 

(c) No Conflicts. The execution, delivery and performance by the Company of this
Agreement, the issuance and sale of the Purchase Shares and the consummation by
it of the transactions contemplated hereby party do not and will not conflict
with or violate any provision of the Company’s articles of incorporation or
other organizational or charter documents. The Purchase Shares, upon issuance in
accordance with this Agreement, will be duly issued, fully paid, and
nonassessable.

 

(d) Validity, Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Company and is a valid and binding
agreement of the Company enforceable against the Investor in accordance with its
terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

  

(e)  Registration Statement. The Company has prepared and filed the Registration
Statement with the SEC in accordance with the Securities Act. The Registration
Statement was declared effective by order of the SEC on July 8, 2020. The
Registration Statement is effective pursuant to the Securities Act and available
for the issuance of the Purchase Shares thereunder. No stop order suspending the
effectiveness of the Registration Statement has been issued by the SEC, and no
proceeding for that purpose or pursuant to Section 8A of the Securities Act
against the Company or related to the offering of the Purchase Shares has been
initiated or, to the knowledge of the Company, threatened by the SEC. The “Plan
of Distribution” section of the Prospectus permits the issuance of the Purchase
Shares under the terms of this Agreement. At the time the Registration Statement
and any amendments thereto became effective, at the date of this Agreement and
at each deemed effective date thereof pursuant to Rule 430B(f)(2) of the
Securities Act, the Registration Statement and any amendments thereto complied
and will comply in all material respects with the requirements of the Securities
Act and did not and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; and the Base Prospectus and any
Prospectus Supplement thereto, at the time such Base Prospectus or such
Prospectus Supplement thereto was filed and on the Commencement Date, complied
and will comply in all material respects with the requirements of the Securities
Act and did not and will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided that this representation and warranty does not apply to statements in
or omissions from any Prospectus Supplement made in reliance upon and in
conformity with information relating to the Investor furnished to the Company in
writing by or on behalf of the Investor expressly for use therein. The Company
meets all of the requirements for the use of a registration statement on Form
S-3 pursuant to the Securities Act for the offering and sale of the Purchase
Shares contemplated by this Agreement in reliance on General Instruction I.B.1.,
and the SEC has not notified the Company of any objection to the use of the form
of the Registration Statement pursuant to Rule 401(g)(1) of the Securities Act.
The Company hereby confirms that the issuance of the Purchase Shares to the
Investor pursuant to this Agreement would not result in non-compliance with the
Securities Act or any of the General Instructions to Form S-3. The Registration
Statement, as of its effective date, meets the requirements set forth in Rule
415(a)(1)(x) pursuant to the Securities Act.

 

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5. COVENANTS.

 

(a) Filing of Current Report and Initial Prospectus Supplement. The Company
agrees that it shall, within the time required under the Exchange Act, file with
the SEC a Current Report on Form 8-K relating to the transactions contemplated
by, and describing the material terms and conditions of, the Transaction
Documents (the “Current Report”). The Company further agrees that it shall,
within the time required under Rule 424(b) under the Securities Act, file with
the SEC the Initial Prospectus Supplement pursuant to Rule 424(b) under the
Securities Act specifically relating to the transactions contemplated by, and
describing the material terms and conditions of, the Transaction Documents,
containing information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430B under the Securities Act, and
disclosing all information relating to the transactions contemplated hereby
required to be disclosed in the Registration Statement and the Prospectus as of
the date of the Initial Prospectus Supplement, including, without limitation,
information required to be disclosed in the section captioned “Plan of
Distribution” in the Prospectus. The Investor acknowledges that it will be
identified in the Initial Prospectus Supplement as an underwriter within the
meaning of Section 2(a)(11) of the Securities Act. The Investor shall furnish to
the Company such information regarding itself, the Purchase Shares held by it
and the intended method of distribution thereof, including any arrangement
between the Investor and any other Person relating to the sale or distribution
of the Purchase Shares, as shall be reasonably requested by the Company in
connection with the preparation and filing of the Current Report and the Initial
Prospectus Supplement, and shall otherwise cooperate with the Company as
reasonably requested by the Company in connection with the preparation and
filing of the Current Report and the Initial Prospectus Supplement with the SEC.

  

(b) Listing/DTC. The Company shall use commercially reasonable efforts to
maintain the listing of the Common Stock on the Principal Market and to comply
in all respects with the Company’s reporting, filing and other obligations under
the bylaws or rules and regulations of the Principal Market. The Company shall
not take any action that would reasonably be expected to result in the delisting
or suspension of the Common Stock on the Principal Market. The Company shall
promptly, and in no event later than the following Business Day, provide to the
Investor copies of any notices it receives from any Person regarding the
continued eligibility of the Common Stock for listing on the Principal Market;
provided, however, that the Company shall not be required to provide the
Investor copies of any such notice that the Company reasonably believes
constitutes material non-public information and the Company would not be
required to publicly disclose such notice in any report or statement filed with
the SEC and under the Exchange Act or the Securities Act. The Company shall pay
all fees and expenses in connection with satisfying its obligations under this
Section 5(c). The Company shall take all action necessary to ensure that its
Common Stock can be transferred electronically as DWAC Shares.

 

(c) Prohibition of Short Sales and Hedging Transactions. The Investor agrees
that beginning on the date of this Agreement and ending on the date of
termination of this Agreement as provided in Section 9, the Investor and its
agents, representatives and affiliates shall not in any manner whatsoever enter
into or effect, directly or indirectly, any (i) “short sale” (as such term is
defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock
or (ii) hedging transaction, which establishes a net short position with respect
to the Common Stock.

    

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(d) Purchase Records. The Investor and the Company shall each maintain records
showing the remaining Available Amount at any given time and the dates and
Purchase Amounts for each Regular Purchase, Accelerated Purchase and Additional
Accelerated Purchase or shall use such other method, reasonably satisfactory to
the Investor and the Company.

  

(e) Use of Proceeds. The Company will use the net proceeds from the offering for
any corporate purpose at the sole discretion of the Company.

  

6. CONDITIONS TO THE COMPANY’S RIGHT TO COMMENCE SALES OF SHARES OF COMMON
STOCK.

 

The right of the Company hereunder to commence sales of Purchase Shares is
subject to the satisfaction of each of the following conditions:

 

(a) The Investor shall have executed each of the Transaction Documents and
delivered the same to the Company; and

 

(b) No stop order with respect to the Registration Statement shall be pending or
threatened by the SEC.

 

7. CONDITIONS TO THE INVESTOR’S OBLIGATION TO PURCHASE SHARES OF COMMON STOCK.

 

The obligation of the Investor to buy Purchase Shares under this Agreement is
subject to the satisfaction of each of the following conditions on or prior to
the Commencement Date and, once such conditions have been initially satisfied,
there shall not be any ongoing obligation to satisfy such conditions after the
Commencement has occurred:

 

(a) The Company shall have executed each of the Transaction Documents and
delivered the same to the Investor;

  

(b) The Common Stock shall be listed on the Principal Market, trading in the
Common Stock shall not have been within the last 365 days suspended by the SEC
or the Principal Market and such suspension has not subsequently been cured;

 

(c) The representations and warranties of the Company shall be true and correct
in all material respects (except to the extent that any of such representations
and warranties is already qualified as to materiality in Section 4 above, in
which case, such representations and warranties shall be true and correct
without further qualification) as of the date hereof and as of the Commencement
Date as though made at that time (except for representations and warranties that
speak as of a specific date, which shall be true and correct as of such date)
and the Company shall have performed, satisfied and complied with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Commencement Date.
The Investor shall have received a certificate, executed by the chief executive
officer of the Company, dated as of the Commencement Date, to the foregoing
effect in the form attached hereto as Exhibit B;

 

(d) The Registration Statement shall continue to be effective and no stop order
with respect to the Registration Statement shall be pending or threatened by the
SEC. The Company shall have a maximum dollar amount certain of Common Stock
registered under the Registration Statement which is sufficient to issue to the
Investor not less than the full Available Amount worth of Purchase Shares. The
Current Report and the Initial Prospectus Supplement each shall have been filed
with the SEC, as required pursuant to Section 5(a). The Prospectus shall be
current and available for issuances and sales of all of the Purchase Shares by
the Company to the Investor. Any other Prospectus Supplements required to have
been filed by the Company with the SEC under the Securities Act at or prior to
the Commencement Date shall have been filed with the SEC within the applicable
time periods prescribed for such filings under the Securities Act;

 

(e) The Company will have delivered to the Transfer Agent irrevocable
instructions, in a form reasonably acceptable to the Investor, to issue Purchase
Shares in accordance with this Agreement; and

 

(f) No Event of Default has occurred and is continuing.

    

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8. EVENTS OF DEFAULT.

 

An “Event of Default” shall be deemed to have occurred at any time as any of the
following events occurs:

 

(a) the effectiveness of the Registration Statement lapses for any reason
(including, without limitation, the issuance of a stop order or similar order)
or such Registration Statement (or the prospectus forming a part thereof) is
unavailable to the Investor for resale of any or all of the Purchase Shares to
be issued to the Investor under the Transaction Documents;

 

(b) the suspension of the Common Stock from trading on the Principal Market for
a period of two (2) Business Days, provided that the Company may not direct the
Investor to purchase any shares of Common Stock during any such suspension;

 

(c) the delisting of the Common Stock from the OTC Pink provided, however, that
the Common Stock is not immediately thereafter trading on The NASDAQ Capital
Market, The NASDAQ Global Market, The NASDAQ Global Select Market, the New York
Stock Exchange, the NYSE American, or the OTCQB or the OTCQX operated by the OTC
Markets Group, Inc. (or any nationally recognized successor to any of the
foregoing);

 

(d) the failure for any reason by the Transfer Agent to issue Purchase Shares to
the Investor within three (3) Business Days after the applicable date on which
the Investor is entitled to receive such Purchase Shares;

 

(e) the Company breaches any representation, warranty, covenant or other term or
condition under any Transaction Document if such breach could have a Material
Adverse Effect and except, in the case of a breach of a covenant which is
reasonably curable, only if such breach continues for a period of at least five
(5) Business Days;

 

(f) if any Person or entity commences a proceeding against the Company pursuant
to or within the meaning of any Bankruptcy Law;

 

(g) if the Company, pursuant to or within the meaning of any Bankruptcy Law, (i)
commences a voluntary case, (ii) consents to the entry of an order for relief
against it in an involuntary case, (iii) consents to the appointment of a
Custodian of it or for all or substantially all of its property, or (iv) makes a
general assignment for the benefit of its creditors or is generally unable to
pay its debts as the same become due;

 

(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (i) is for relief against the Company in an involuntary
case, (ii) appoints a Custodian of the Company or for all or substantially all
of its property, or (iii) orders the liquidation of the Company; or

 

(i) if at any time the Company is not eligible to transfer its Common Stock
electronically as DWAC Shares.

 

So long as an Event of Default has occurred and is continuing, the Company shall
not deliver to the Investor any Purchase Notice.

 

9. TERMINATION

 

This Agreement may be terminated only as follows:

 

(a) If pursuant to or within the meaning of any Bankruptcy Law, the Company
commences a voluntary case or any Person commences a proceeding against the
Company, a Custodian is appointed for the Company or for all or substantially
all of its property, or the Company makes a general assignment for the benefit
of its creditors (any of which would be an Event of Default as described in
Sections 9(f), 9(g) and 9(h) hereof), this Agreement shall automatically
terminate without any liability or payment to the Company (except as set forth
below) without further action or notice by any Person.

 

(b) At any time after the Commencement Date, the Company shall have the option
to terminate this Agreement for any reason or for no reason by delivering notice
(a “Company Termination Notice”) to the Investor electing to terminate this
Agreement without any liability whatsoever of any party to any other party under
this Agreement (except as set forth below). The Company Termination Notice will
be effective upon delivery by the Company.

 

8

 

 

(c) This Agreement shall automatically terminate on the date that the Company
sells and the Investor purchases the full Available Amount as provided herein,
without any action or notice on the part of any party and without any liability
whatsoever of any party to any other party under this Agreement (except as set
forth below).

 

(d) If, for any reason or for no reason, the full Available Amount has not been
purchased in accordance with Section 2 of this Agreement by the Maturity Date,
this Agreement shall automatically terminate on the Maturity Date, without any
action or notice on the part of any party and without any liability whatsoever
of any party to any other party under this Agreement (except as set forth
below).

  

Except as set forth in Sections 9(a) (in respect of an Event of Default under
Sections 8(f), 8(g) and 8(h)), 9(c) and 9(d), any termination of this Agreement
pursuant to this Section 9 shall be effected by written notice from the Company
to the Investor, or the Investor to the Company, as the case may be, setting
forth the basis for the termination hereof. The representations and warranties
and covenants of the Company and the Investor contained in Sections 3, 4, and 5,
hereof, and the agreements and covenants set forth in Sections 8, 9 and 10 shall
survive the execution and delivery of this Agreement and any termination of this
Agreement. No termination of this Agreement shall (i) affect the Company’s or
the Investor’s rights or obligations under (A) this Agreement with respect to
any pending Purchases, and the Company and the Investor shall complete their
respective obligations with respect to any pending Purchases under this
Agreement or (ii) be deemed to release the Company or the Investor from any
liability for intentional misrepresentation or willful breach of any of the
Transaction Documents.

 

10. MISCELLANEOUS.

 

(a) Governing Law; Jurisdiction; Jury Trial. The corporate laws of the State of
Nevada shall govern all issues concerning the relative rights of the Company and
its stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the other Transaction
Documents shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New
York. Each party hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the State of New York, County of New York,
for the adjudication of any dispute hereunder or under the other Transaction
Documents or in connection herewith or therewith, or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such 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 manner permitted by law.

 

(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature or signature
delivered by e-mail in a “.pdf” format data file shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original signature.

 

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

 

(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

  

9

 

 

(e) Entire Agreement. The Transaction Documents supersede all other prior oral
or written agreements between the Investor, the Company, their affiliates and
Persons acting on their behalf with respect to the subject matter thereof, and
this Agreement, the other Transaction Documents 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 Investor makes any representation,
warranty, covenant or undertaking with respect to such matters.

 

(f) Notices. Any notices, consents or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered: (i) upon receipt when delivered personally; (ii)
upon receipt when sent by facsimile or email (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses for such communications shall be:

 

If to the Company:

 

SunHydrogen, Inc. 10 E. Yanonali, Suite 36

Santa Barbara, CA 93101

  Telephone: 805-966-6566   E-mail:

tyoung@sunhydrogen.com

  Attention: Timothy Young

 

With a copy to (which shall not constitute notice or service of process):

 

Sichenzia Ross Ference LLP

1185 Avenue of the Americas, 37th Floor

New York, New York 10036

  Telephone: (212) 930-9700   E-mail: gsichenzia@srf.law   Attention: Gregory
Sichenzia

 

If to the Investor:

 

GHS Investments, LLC

420 Jericho Turnpike, Suite 102,

Jericho, NY 11753

  Telephone:           E-mail:     Attention: Sarfraz Hajee

 

or at such other address, email address and/or facsimile number and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party one (1) Business Day prior to the effectiveness
of such change. Written confirmation of receipt (A) given by the recipient of
such notice, consent or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine or email account containing the
time, date, and recipient facsimile number or email address, as applicable, or
(C) provided by a nationally recognized overnight delivery service, shall be
rebuttable evidence of personal service, receipt by facsimile or email or
receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

 

(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investor, including by merger or
consolidation. The Investor may not assign its rights or obligations under this
Agreement.

 

10

 

 

(h) No 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.

  

(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 consummate and make effective, as soon
as reasonably possible, the Commencement, and 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) Enforcement Costs. In the event of a dispute arising out of or relating to
this Agreement, if a court of competent jurisdiction determines in a final,
non-appealable order that a party has breached this Agreement, then, in addition
to any other available remedies, the non-breaching party shall be entitled to,
and the breaching party shall be liable for, the reasonable legal fees and
expenses incurred by the non-breaching party in connection with the dispute,
including any appeals in connection therewith.

 

(m) Amendment and Waiver; Failure or Indulgence Not Waiver. No provision of this
Agreement (i) may be amended other than by a written instrument signed by both
parties hereto and (ii) may be waived other than in a written instrument signed
by the party against whom enforcement of such waiver is sought. No failure or
delay in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.

 

11

 

 

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

 

  THE COMPANY:         SUNHYDROGEN, INC.         By: /s/ Timothy Young   Name:
Timothy Young   Title: Chief Executive Officer         INVESTOR:       GHS
INVESTMENTS, LLC         By: /s/ Sarfraz Hajee   Name: Sarfraz Hajee   Title:
Member

 

 

 

 

EXHIBIT A

 

FORM OF PURCHASE NOTICE

 

 

 

 

EXHIBIT B

 

FORM OF OFFICER’S CERTIFICATE