SECURITIES
PURCHASE AGREEMENT


 


This
SECURITIES PURCHASE
AGREEMENT (the
“Agreement”), dated
as of
June 5,
2014, by
and between
CO-SIGNER, INC.,
a Nevada
corporation, with
headquarters located
at 8275
South Eastern
Avenue -
Suite 200-661, Las
Vegas, NV
89123 (the “Company”),
and KBM WORLDWIDE,
INC.,
a New
York corporation,
with its address
at 80 Cuttermill
Road, Suite 410, Great Neck,
NY 11021 (the “Buyer”).


 


WHEREAS:


 


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


 


B.                    
Buyer desires
to purchase
and the Company
desires to
issue and
sell, upon
the terms
and conditions
set forth
in this Agreement
an 8% convertible
note of
the Company,
in the form
attached hereto
as Exhibit
A, in the
aggregate principal
amount of $32,500.00
(together with any note(s) issued
in replacement thereof
or as a dividend thereon
or otherwise with respect thereto
in accordance
with the
terms thereof,
the “Note”),
convertible into
shares of
common stock, $0.001 par
value per share, of the Company
(the “Common Stock”), upon
the terms and subject
to the limitations and conditions
set forth in such Note.


 


C.                    
The Buyer
wishes to
purchase, upon
the terms and
conditions stated
in this
Agreement, such
principal amount
of Note
as is
set forth
immediately below its
name on
the signature pages hereto;
and


 


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


 


1.                     
Purchase and Sale of
Note.


 


a.                      
Purchase of
Note.
On the
Closing Date
(as defined
below), the
Company shall
issue and
sell to
the Buyer
and the Buyer
agrees to purchase
from the
Company such
principal amount
of Note as
is set
forth immediately
below the Buyer’s name
on the signature pages hereto.


 


b.                     
Form of
Payment.
On the Closing
Date (as
defined below),
(i) the
Buyer shall pay
the purchase
price for the
Note to be
issued and
sold to it
at the
Closing (as defined
below) (the “Purchase Price”)
by wire transfer of immediately
available funds to the Company,
in accordance with
the Company’s
written wiring
instructions, against
delivery of the Note in the principal
amount equal to the Purchase
Price as is set forth
immediately below the Buyer’s name
on the signature pages hereto,
and (ii) the Company shall deliver
such duly executed Note on behalf
of the Company, to the Buyer,
against delivery of such Purchase
Price.


 


c.                      
Closing Date.
Subject to
the satisfaction
(or written
waiver) of
the conditions
thereto set
forth in Section
6 and
Section 7
below, the
date and
time of
the issuance
and sale
of the Note
pursuant to this
Agreement (the
“Closing Date”) shall be
12:00 noon, Eastern
Standard Time
on or about June 9,
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 such location as may be
agreed to by the parties.


 


2.                     
Buyer’s  Representations
 and 
Warranties.The
 Buyer 
represents  and
warrants to the Company that:


 


a.                      
Investment Purpose.
As of
the date hereof,
the Buyer
is purchasing
the Note
and the
shares of
Common Stock
issuable upon
conversion of
or otherwise
pursuant to
the Note
(including, without
limitation, such
additional shares
of Common Stock,
if any,
as are
issuable (i)
on account
of interest
on the Note,
(ii) as a result
of the
events described
in Sections 1.3 and 1.4(g)
of the Note or (iii) in payment
of the Standard Liquidated Damages
Amount (as
defined in
Section 2(f)
below) pursuant to
this Agreement,
such shares
of Common Stock being
collectively referred to herein
as the “Conversion
Shares” and, collectively with
the Note, the “Securities”)
for its own account and
not with a present view towards
the public sale or distribution
thereof, except
pursuant to
sales registered
or exempted from
registration under the 1933 Act;
provided, however, that by making the representations
herein, the Buyer does
not agree to hold any of the Securities
for any minimum or other specific
term and reserves
the right to dispose of the Securities
at any time in accordance with
or pursuant to a registration statement
or an exemption under the
1933 Act.


 


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


 


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


 



    	 



    	 



    

 





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


 


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


 


f.                      
Transfer or
Re-sale.
The
Buyer
understands
that
(i)
the
sale
or
re- sale
of the Securities
has not been
and is not
being registered
under the 1933
Act or
any applicable
state securities laws, and
the Securities
may not be transferred
unless (a) the Securities are
sold pursuant
to an effective
registration statement
under the 1933 Act, (b)
the Buyer shall
have delivered to the Company,
at the cost of
the Buyer, an opinion of counsel
that shall be in form,
substance and scope customary for
opinions of counsel in comparable transactions
to the effect that the Securities
to be sold or transferred may be sold or transferred
pursuant to an exemption from
such registration, which
opinion shall be accepted by
the Company, (c) the Securities
are sold or transferred to
an “affiliate”
(as defined in Rule
144 promulgated
under the 1933 Act (or a successor
rule) (“Rule 144”))
of the Buyer who agrees
to sell or otherwise transfer
the Securities
only in accordance
with this Section 2(f)
and who is an
Accredited Investor, (d) the
Securities are sold pursuant
to Rule 144, or (e) the Securities are
sold pursuant to Regulation S
under the 1933 Act (or
a successor rule) (“Regulation
S”), and the Buyer shall
have delivered to the Company,
at the cost of the Buyer,
an opinion of counsel that shall
be in form, substance and
scope customary for opinions of counsel
in corporate transactions, which
opinion shall be accepted by
the Company; (ii) any
sale of such Securities made
in reliance on Rule 144
may be made
only in accordance with
the terms
of said Rule
and further,
if said Rule
is not applicable, any re-sale
of such Securities under circumstances
in which the seller (or
the person through whom
the sale is made) may be
deemed to be an
underwriter (as that term is defined
in the 1933 Act)
may require compliance
with some other
exemption under
the 1933 Act or
the rules and
regulations of the
SEC thereunder;
and (iii)
neither the Company
nor any other person
is under
any obligation to
register such
Securities under
the 1933 Act
or any state securities laws or
to comply with the terms and
conditions of any exemption thereunder (in each
case). Notwithstanding the foregoing or anything
else contained herein to the contrary,
the Securities may
be pledged as collateral
in connection with a bona fide
margin account or other
lending arrangement.


 


g.                     
Legends. The
Buyer understands that
the Note
and, until such time as
the Conversion
Shares have
been registered
under the 1933
Act may
be sold
pursuant to
Rule 144
or Regulation
S without
any restriction
as to
the number
of securities
as of
a particular
date that
can then
be immediately sold, the
Conversion Shares
may bear a restrictive
legend in substantially the following
form (and
a stop-transfer order may be
placed against transfer
of the certificates
for such Securities):


 


“NEITHER
THE ISSUANCE
AND SALE
OF THE SECURITIES
REPRESENTED BY THIS
CERTIFICATE NOR
THE SECURITIES
INTO WHICH
THESE SECURITIES
ARE EXERCISABLE
HAVE BEEN
REGISTERED UNDER
THE SECURITIES
ACT OF
1933, AS
AMENDED, OR
APPLICABLE STATE
SECURITIES LAWS. THE
SECURITIES MAY
NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT
OF 1933, AS
AMENDED, OR (B) AN
OPINION OF
COUNSEL (WHICH
COUNSEL SHALL
BE SELECTED
BY THE HOLDER),
IN A GENERALLY
ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT
OR (II) UNLESS SOLD
PURSUANT TO RULE
144 OR RULE 144A UNDER
SAID ACT.
NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY
BE PLEDGED IN CONNECTION
WITH A BONA
FIDE MARGIN
ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY
THE SECURITIES.”


 


The
legend set
forth above
shall be
removed and
the Company shall
issue a certificate
without such
legend to
the holder
of any
Security upon
which it
is stamped,
if, unless
otherwise required
by applicable
state securities laws,
(a) such Security is
registered for
sale under an effective registration
statement filed under the 1933 Act
or otherwise may be sold pursuant
to Rule 144 or Regulation
S without any restriction
as to the number
of securities as
of a particular date
that can
then be
immediately sold, or
(b) such holder
provides the Company with
an opinion of counsel, in form,
substance and scope customary
for opinions of counsel in comparable
transactions, to
the effect that
a public sale
or transfer
of such
Security may be made
without registration under
the 1933 Act,
which opinion shall
be accepted
by the Company so that
the sale or
transfer is effected. The Buyer
agrees to sell all Securities,
including those represented by
a certificate(s) from
which the legend
has been removed,
in compliance
with applicable
prospectus delivery requirements,
if any. In
the event that the Company does
not accept the opinion of counsel
provided by the Buyer with
respect to the
transfer of Securities
pursuant to an
exemption from registration,
such as Rule 144 or Regulation S, at
the Deadline, it will
be considered an
Event of Default pursuant to
Section 3.2 of the
Note.


 


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


 


i.                       
Residency.The Buyer
is a resident
of the
jurisdiction set
forth immediately below the
Buyer’s name on
the signature pages hereto.


 



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3.                     
Representations 
and  Warranties
 of  the 
Company.The
Company represents and
warrants to the
Buyer that:


 


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


 


b.                     
Authorization; Enforcement.
(i) The
Company has
all requisite
corporate power
and authority
to enter
into and perform
this Agreement,
the Note
and to
consummate the
transactions contemplated
hereby and
thereby and to
issue the
Securities, in accordance
with the terms hereof and
thereof, (ii) the execution
and delivery of this Agreement,
the Note by the Company and the
consummation by it of the transactions
contemplated hereby and thereby (including
without limitation, the issuance
of the Note and the issuance and reservation
for issuance of the Conversion
Shares issuable upon conversion
or exercise thereof) have
been duly authorized
by the Company’s
Board of Directors and
no further
consent or authorization of the
Company, its Board of Directors,
or its shareholders is required,
(iii) this Agreement has
been duly  executed and
delivered by the Company by 
its authorized representative, and
such authorized representative
is the true and
official representative with
authority to sign this Agreement
and the other documents executed
in connection herewith and
bind the Company
accordingly, and
(iv) this Agreement
constitutes, and
upon execution
and delivery by the Company
of the Note, each of such instruments
will constitute, a legal, valid
and binding obligation of
the Company enforceable
against the Company
in accordance
with its terms.


c.                     
Capitalization. As
of the
date hereof,
the authorized capital
stock of the
Company consists
of: (i)
440,000,000 shares
of Common
Stock, $0.001
par value
per share,
of which
150,484,189 shares
are issued
and outstanding;
and (ii)
8,500,000 authorized
shares of
Preferred Stock,
$0.001 par
value per share,
of which
no shares
are issued
and outstanding; and
(iii) 1,500,000 authorized shares
of Preferred Stock
– Series A, $0.001 par
value per share, of which
1,173,041 shares are issued and
outstanding; no shares
are reserved
for issuance pursuant to the
Company’s stock option plans,
no shares are reserved for
issuance pursuant to
securities (other
than the Note
and a prior
convertible promissory note
in favor of
the Buyer dated March
20, 2014 in the amount of $42,500.00
for which 10,500,000 shares
of Common Stock are
presently reserved) exercisable
for, or convertible into or exchangeable
for shares of
Common Stock
and 45,500,000
shares are
reserved for
issuance upon conversion
of the Note.
All of such outstanding shares of capital
stock are, or upon issuance will
be, duly authorized, validly issued,
fully paid and non-assessable.
No shares of capital stock
of the Company are subject
to preemptive rights
or any other
similar rights
of the shareholders of
the Company or any
liens or encumbrances imposed
through the actions or failure
to act of the Company.
As of the effective date of this Agreement,
(i) there are no outstanding
options, warrants, scrip, rights
to subscribe for, puts, calls,
rights of first refusal, agreements,
understandings, claims or other
commitments or rights of any
character whatsoever relating
to, or securities
or rights
convertible into
or exchangeable
for any shares of
capital stock
of the Company or any of
its Subsidiaries, or arrangements
by which the Company or
any of its Subsidiaries is or may become
bound to issue additional shares of
capital stock of the Company or
any of its Subsidiaries,
(ii) there are no
agreements or arrangements under
which the Company or
any of its Subsidiaries is obligated
to register
the sale of any of
its or their securities
under the 1933 Act and
(iii) there are no anti-dilution
or price adjustment
provisions contained in any security issued
by the Company (or
in any agreement providing
rights to security holders) that will
be triggered by
the issuance of the Note
or the Conversion Shares. The
Company has furnished
to the Buyer true and correct
copies of the Company’s
Certificate of Incorporation
as in effect on the
date hereof (“Certificate of Incorporation”),
the Company’s By-laws,
as in effect on
the date hereof (the
“By-laws”), and the
terms of all
securities convertible into or
exercisable for
Common Stock
of the
Company and
the material rights
of the holders
thereof in respect
thereto. The Company shall
provide the Buyer with a written
update of this representation signed
by the Company’s
Chief Executive on behalf of
the Company as of
the Closing Date.


 


d.                    
Issuance of
Shares.
The
Conversion
Shares
are
duly authorized
and reserved
for issuance
and, upon
conversion of
the Note
in accordance
with its
respective terms,
will be validly
issued, fully paid
and non-assessable,
and free from
all taxes, liens,
claims and encumbrances with
respect to the issue thereof and
shall not be subject to preemptive
rights or other similar
rights of shareholders
of the Company and will
not impose personal
liability upon the holder thereof.


 


e.                     
Acknowledgment of
Dilution.
The Company
understands and
acknowledges the potentially
dilutive effect
to the Common
Stock upon
the issuance
of the Conversion
Shares upon conversion
of the Note. The
Company further acknowledges
that its obligation
to issue Conversion Shares upon conversion
of the Note in accordance with
this Agreement, the
Note is absolute and
unconditional regardless of
the dilutive effect that such
issuance may have on the
ownership interests of
other shareholders of the
Company.


 


f.                      
No Conflicts.
The execution,
delivery and
performance of
this Agreement,
the Note
by the
Company and the
consummation by the
Company of the
transactions contemplated
hereby and
thereby (including,
without limitation,
the issuance and
reservation for
issuance of the Conversion Shares)
will not
(i) conflict
with or result
in a violation
of any provision
of the Certificate of Incorporation
or By-laws, or
(ii) violate or
conflict with,
or result in
a breach of any
provision of,
or constitute a default (or
an event which
with notice or lapse of time or
both could
become a default) under,
or give to others
any rights
of termination, amendment, acceleration
or cancellation of, any
agreement, indenture, patent,
patent license or
instrument to which
the Company or any
of its Subsidiaries
is a party, or
(iii) result
in a violation of any
law, rule, regulation, order,
judgment or decree (including
federal and state
securities laws and
regulations and
regulations of any
self-regulatory organizations
to which
the Company or its securities
are subject) applicable
to the Company or any of
its Subsidiaries or by which
any property or asset of the Company
or any of its Subsidiaries
is bound or affected (except
for such conflicts, defaults,
terminations, amendments, accelerations,
cancellations and violations
as would not, individually
or in the aggregate, have a Material
Adverse Effect). Neither
the Company nor any
of its Subsidiaries
is in violation
of its Certificate
of Incorporation, By-laws or
other organizational documents
and neither the Company nor any
of its Subsidiaries is
in default
(and no
event has
occurred which
with notice or lapse
of time or both could
put the Company or any of its Subsidiaries
in default) under, and
neither the Company nor any of its Subsidiaries
has taken any
action or failed to take any action
that would give
to others any
rights of termination,
amendment, acceleration or cancellation
of, any agreement, indenture
or instrument to
which the Company
or any
of its Subsidiaries
is a party or by
which any
property or assets of the Company
or any of its Subsidiaries is bound or
affected, except for possible defaults
as would not,
individually or in the aggregate,
have a Material Adverse Effect.
The businesses of the Company
and its Subsidiaries, if any,
are not being conducted, and
shall not be conducted so
long as
the Buyer owns any
of the Securities, in
violation of any
law, ordinance or regulation
of any governmental entity.
Except as specifically
contemplated by this Agreement
and as
required under the 1933 Act
and any
applicable state securities
laws, the Company is not required
to obtain
any consent, authorization
or order of,
or make any filing
or registration with,
any court,
governmental agency,
regulatory agency,
self regulatory organization or stock
market or any third party in order
for it to execute, deliver
or perform any of its obligations
under this Agreement,
the Note in accordance with
the terms hereof or thereof
or to issue and
sell the Note in accordance with
the terms hereof and
to issue the Conversion Shares
upon conversion of the Note. All
consents, authorizations, orders, filings
and registrations which the Company
is required to
obtain pursuant
to the preceding
sentence have been obtained or
effected on or prior
to the date hereof.
The Company is not
in violation
of the listing requirements
of the Over-the- Counter Bulletin
Board (the “OTCBB”)
and does not reasonably anticipate that
the Common Stock will be delisted
by the OTCBB
in the foreseeable future. The
Company and its
Subsidiaries are unaware of
any facts or
circumstances which might
give rise
to any of
the foregoing.


 



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g.                     
SEC Documents;
Financial Statements.
The Company
has timely filed
all reports,
schedules, forms,
statements and
other documents
required to be
filed by
it with
the SEC
pursuant to
the reporting
requirements of
the Securities
Exchange Act
of 1934, as
amended (the “1934 Act”)
(all of the foregoing filed prior
to the date hereof and
all exhibits included therein
and financial statements
and schedules thereto
and documents (other than exhibits
to such documents) incorporated
by reference therein, being hereinafter
referred to herein as the
“SEC Documents”). Upon
written request the Company will deliver
to the Buyer true
and complete
copies of the
SEC Documents,
except for
such exhibits
and incorporated documents.
As of their respective dates,
the SEC Documents
complied in all
material respects with
the requirements of the 1934 Act
and the rules and regulations
of the SEC promulgated thereunder
applicable to the SEC Documents,
and none of the SEC Documents,
at the time they were filed with
the SEC, contained any
untrue statement of a material
fact or omitted to state a material
fact required to
be stated
therein or necessary in
order to make
the statements therein,
in light of the circumstances
under which they
were made, not misleading.
None of the statements made in
any such SEC
Documents is, or has been, required
to be amended or updated under
applicable law
(except for such
statements as
have been amended
or updated
in subsequent filings
prior the date hereof). As
of their respective dates, the
financial statements of the
Company included in the
SEC Documents complied as
to form in all
material respects with
applicable accounting requirements
and the published
rules and
regulations of the SEC
with respect thereto.
Such financial
statements have
been prepared
in accordance with
United States generally accepted
accounting principles, consistently
applied, during the periods
involved and fairly present
in all
material respects
the consolidated financial
position of the Company and its consolidated
Subsidiaries as of the dates thereof
and the consolidated results of their
operations and cash flows
for the periods then
ended (subject, in the case
of unaudited
statements, to normal year-end
audit adjustments). Except as
set forth in the financial statements
of the Company included in
the SEC Documents,
the Company has no
liabilities, contingent
or otherwise, other
than (i) liabilities
incurred in the ordinary course
of business subsequent to
March 31, 2014, and (ii) obligations
under contracts and
commitments incurred in
the ordinary course of business
and not required under
generally accepted accounting
principles to be reflected
in such
financial statements, which,
individually or in the aggregate,
are not material to the financial
condition or operating results
of the Company. The Company is subject
to the reporting requirements of the 1934 Act.


 


h.                     
Absence of
Certain Changes.
Since March
31, 2014, there
has been
no material
adverse change
and no
material adverse
development in
the assets,
liabilities, business,
properties, operations,
financial condition,
results of operations,
prospects or 1934
Act reporting status
of the Company or any of
its Subsidiaries.


 


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


 


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


 


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


 


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


 


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


 


n.                     
Disclosure. All information
relating to or concerning
the Company or
any of its
Subsidiaries set
forth in this Agreement
and provided
to the
Buyer pursuant
to Section
2(d) hereof
and otherwise
in connection with
the transactions contemplated
hereby is true
and correct in all
material respects and
the Company has not
omitted to
state any material fact
necessary in order
to make the statements made
herein or therein, in light
of the circumstances under which
they were made, not misleading.
No event or circumstance has
occurred or exists with respect
to the Company or any of its Subsidiaries or its or their
business, properties, prospects,
operations or financial conditions,
which, under
applicable law, rule
or regulation, requires public
disclosure or announcement by the Company but which
has not been so publicly announced or disclosed
(assuming for this purpose that
the Company’s reports filed
under the 1934 Act
are being incorporated
into an
effective registration
statement filed
by the Company under the
1933 Act).


 



    	4



    	 



    

 





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


 


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


 


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


 


r.                       
Permits; Compliance.
The Company and
each of its Subsidiaries is
in possession
of all
franchises, grants,
authorizations, licenses,
permits, easements,
variances, exemptions,
consents, certificates,
approvals and
orders necessary
to own,
lease and
operate its properties
and to carry on
its business
as it is
now being
conducted (collectively,
the “Company Permits”), and
there is no action pending or,
to the knowledge of the Company, threatened
regarding suspension or cancellation
of any of the Company Permits. Neither
the Company nor any of its Subsidiaries
is in conflict with,
or in default or violation
of, any of the Company Permits,
except for any such
conflicts, defaults or violations
which, individually or in the
aggregate, would not
reasonably be expected to have
a Material Adverse Effect.
Since March 31, 2014, neither
the Company nor any of its Subsidiaries has
received any notification with
respect to possible conflicts, defaults
or violations of applicable
laws, except for
notices relating to possible conflicts, defaults or
violations, which conflicts,
defaults or violations would
not have a Material Adverse Effect.


 


s.                      
Environmental Matters.


 


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


 


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


 


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


 


t.                       
Title to
Property.
The Company and
its Subsidiaries
have good
and marketable
title in fee
simple to all
real property and
good and
marketable title
to all personal
property owned by them which
is material to the business of the Company
and its Subsidiaries, in each
case free and clear
of all liens, encumbrances and
defects except such as
are described in Schedule 3(t) or such
as would not have
a Material Adverse Effect.
Any real property and facilities
held under lease by the Company
and its Subsidiaries are held by them
under valid, subsisting and enforceable
leases with such exceptions as
would not have a Material
Adverse Effect.


 


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


 


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


 



    	5



    	 



    

 





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


 


x.                     
Solvency. The
Company (after
giving effect
to the
transactions contemplated
by this
Agreement) is
solvent (i.e.,
its assets
have a fair
market value
in excess
of the amount required
to pay its probable
liabilities on its existing debts
as they become absolute
and matured) and currently the
Company has no information that would
lead it to reasonably conclude
that the Company
would not,
after giving effect
to the transaction
contemplated by
this Agreement, have the ability to, nor
does it intend to take any
action that would impair
its ability to, pay its debts from
time to time incurred in connection
therewith as such debts
mature. The Company did not receive
a qualified opinion from its
auditors with respect
to its most recent fiscal
year end
and, after
giving effect
to the transactions
contemplated by
this Agreement,
does not anticipate or know of
any basis upon which its auditors
might issue a qualified opinion in respect
of its current fiscal
year.


 


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


 


z.                     
Breach of
Representations and
Warranties by
the Company.
If the
Company breaches
any of
the representations
or warranties
set forth
in this
Section 3,
and in
addition to any other remedies
available to the Buyer pursuant to this Agreement,
it will be considered an
Event of default under Section
3.4 of the Note.


 


4.                     
COVENANTS.


 


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


 


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


 


c.                     
Use of
Proceeds.
The Company
shall use the
proceeds for
general working
capital purposes.


 


d.                    
Right of
First Refusal.
Unless it shall
have first
delivered to
the Buyer,
at least
seventy two (72)
hours prior
to the closing
of such
Future Offering
(as defined
herein), written
notice describing the proposed
Future Offering
(“ROFR Notice”), including
the terms and
conditions thereof,
identity of the proposed
purchaser and proposed
definitive documentation to be entered
into in connection therewith,
and providing the Buyer
an option during the seventy two
(72) hour period following delivery of such notice
to purchase the securities being
offered in the Future
Offering on the same
terms as contemplated by
such Future Offering
(the limitations referred
to in this sentence
and the preceding
sentence are collectively referred
to as the “Right
of First Refusal”) (and
subject to the exceptions
described below),
the Company will not conduct any
equity (or debt with an
equity component) financing in an
amount less
than $100,000
(“Future Offering(s)”)
during the period beginning
on the Closing Date and
ending six (6) months following the Closing
Date. Notwithstanding anything
contained herein to the contrary,
the Company shall not consummate
any Future Offering with an
investor, or an affiliate of
such investor (collectively “Prospective
Investor”), identified on an
ROFR Notice whereby the Buyer
exercised its Right
of First
Refusal for
a period
of forty (45)
days following such
exercise; and
any subsequent offer
by a Prospective Investor
is subject to this Section 4(d) and
the Right of First Refusal.
In the event the terms and
conditions of a proposed Future
Offering are amended in any respect
after delivery of the
notice to the Buyer concerning
the proposed Future
Offering, the Company
shall deliver a
new notice
to the Buyer
describing the amended terms and
conditions of the proposed Future
Offering and the Buyer
thereafter shall have an option
during the seventy two (72)
hour period following delivery
of such new notice to purchase
its pro
rata share
of the
securities being offered
on the same
terms as
contemplated by
such proposed
Future Offering,
as amended.
The foregoing
sentence shall
apply to successive
amendments to the terms
and conditions
of any proposed
Future Offering. The Right
of First Refusal
shall not apply to
any transaction involving (i)
issuances of securities
in a firm
commitment underwritten public offering
(excluding a continuous offering pursuant
to Rule 415 under the 1933 Act)
or (ii) issuances of securities
as consideration for a merger,
consolidation or purchase of assets,
or in
connection with
any strategic partnership
or joint venture (the primary
purpose of which is not to raise
equity capital), or in connection
with the disposition or acquisition of
a business,
product or
license by
the Company. The
Right of First
Refusal also shall
not apply to the issuance of securities upon exercise
or conversion of the Company’s
options, warrants or other convertible
securities outstanding as of the
date hereof
or to the grant of additional
options or warrants,
or the issuance
of additional
securities, under
any Company stock
option or restricted stock plan
approved by the shareholders of the
Company.


 


e.                     
Expenses. At
the Closing,
the Company shall
reimburse Buyer
for expenses
incurred by
them in connection
with the
negotiation, preparation,
execution, delivery
and performance
of this Agreement
and the other
agreements to be
executed in
connection herewith (“Documents”),
including, without limitation,
reasonable attorneys’ and
consultants’ fees and expenses,
transfer agent fees, fees
for stock quotation services,
fees relating to any amendments
or modifications of the Documents
or any consents or waivers
of provisions in
the Documents, fees for
the preparation of opinions of
counsel, escrow fees,
and costs of restructuring the
transactions contemplated by the Documents.
When possible, the Company must
pay these fees
directly, otherwise
the Company must make
immediate payment for
reimbursement to the Buyer for all
fees and expenses
immediately upon written notice
by the Buyer or the submission of an
invoice by the Buyer. The Company’s
obligation with respect to this
transaction is to reimburse
Buyer’ expenses shall be
$2,500.


 


f.                      
Financial Information.
Upon written
request the
Company agrees to
send or
make available
the following
reports to
the Buyer
until the
Buyer transfers,
assigns, or sells
all of the Securities: (i) within
ten (10) days
after the filing with
the SEC, a copy of its Annual
Report on
Form 10-K
its Quarterly Reports
on Form
10-Q and
any Current
Reports on Form
8-K; (ii) within
one (1)
day after release,
copies of all
press releases
issued by the
Company or any of its Subsidiaries;
and (iii) contemporaneously with
the making available or giving
to the shareholders of the Company,
copies of any notices or other information
the Company makes available
or gives to
such shareholders.


 



    	6



    	 



    

 





g.                     
[INTENTIONALLY DELETED]


 


h.                     
Listing.
The Company
shall promptly
secure the listing
of the Conversion
Shares upon each national securities
exchange or automated quotation
system, if any,
upon which
shares of
Common Stock
are then
listed (subject
to official
notice of
issuance) and,
so long as
the Buyer owns
any of the Securities, shall
maintain, so
long as
any other shares of Common Stock
shall be so listed, such
listing of all Conversion Shares
from time to time issuable upon
conversion of the Note. The Company
will obtain and,
so long as the
Buyer owns any
of the Securities, maintain the listing and
trading of its Common Stock
on the OTCBB or any equivalent
replacement exchange, the
Nasdaq National Market (“Nasdaq”),
the Nasdaq SmallCap
Market (“Nasdaq
SmallCap”), the
New York
Stock Exchange
(“NYSE”), or
the American Stock Exchange
(“AMEX”) and will
comply in all respects
with the Company’s reporting,
filing and other obligations
under the bylaws or rules of
the Financial Industry Regulatory
Authority (“FINRA”) and such
exchanges, as applicable.
The Company shall promptly provide
to the
Buyer copies
of any notices
it receives
from the
OTCBB and any
other exchanges or quotation
systems on which the Common Stock
is then listed regarding
the continued eligibility of
the Common Stock for
listing on such exchanges
and quotation systems.


 


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


 


j.                       
No Integration.
The Company
shall not
make any offers
or sales
of any
security (other than
the Securities)
under circumstances
that would
require registration
of the Securities
being offered
or sold hereunder
under the 1933
Act or
cause the offering
of the Securities
to be integrated with any
other offering of
securities by the
Company for the
purpose of any stockholder
approval provision applicable to
the Company or its securities.


 


k.                     
Breach of
Covenants. If
the Company
breaches any
of the
covenants set
forth in this
Section 4,
and in
addition to
any other remedies
available to the
Buyer pursuant
to this Agreement, it
will be considered an
event of default
under Section 3.4 of the Note.


 


l.                       
Failure to
Comply with
the 1934 Act.
So long as
the Buyer
beneficially owns
the Note, the
Company shall comply
with the
reporting requirements
of the 1934
Act; and the Company shall
continue to be
subject to the reporting
requirements of the 1934 Act.


 


m.                   
Trading Activities.
Neither the
Buyer nor
its affiliates
has an
open short position in the
common stock of the
Company and the
Buyer agree that it shall not,
and that
it will
cause its
affiliates not
to, engage
in any
short sales
of or hedging
transactions with
respect to the common stock
of the Company.


 


5.                     
Transfer Agent
Instructions.
The
Company shall
issue irrevocable
instructions to
its transfer
agent to
issue certificates,
registered in
the name of
the Buyer
or its nominee,
for the Conversion
Shares in such
amounts as
specified from
time to time
by the Buyer
to the Company upon conversion of the Note
in accordance with the terms
thereof (the “Irrevocable
Transfer Agent
Instructions”). In the event
that the Borrower
proposes to replace
its transfer agent, the Borrower
shall provide, prior to the effective
date of such replacement,
a fully executed Irrevocable
Transfer Agent
Instructions in a form as
initially delivered pursuant to the Purchase
Agreement (including but not limited
to the provision to irrevocably reserve
shares of Common Stock in the Reserved
Amount) signed by the successor
transfer agent to Borrower and
the Borrower. Prior to registration
of the Conversion Shares under
the 1933 Act or the date on which
the Conversion Shares may
be sold pursuant to Rule 144 without any restriction
as to the number of
Securities as of a particular
date that can
then be immediately sold, all such
certificates shall bear
the restrictive legend specified
in Section 2(g) of this Agreement.
The Company warrants that: (i)
no instruction other than
the Irrevocable Transfer Agent
Instructions referred to
in this Section
5, and
stop transfer
instructions to
give effect
to Section
2(f) hereof
(in the case of the Conversion Shares,
prior to registration of the Conversion Shares
under the 1933 Act or the date on which
the Conversion Shares may be
sold pursuant to Rule 144 without
any restriction as
to the number of Securities as
of a particular date that
can then be immediately sold),
will be given by the Company to
its transfer agent and that
the Securities shall otherwise
be freely transferable on the books
and records of the Company as
and to the extent provided in this Agreement
and the Note; (ii) it will
not direct its transfer agent
not to transfer or delay,
impair, and/or
hinder its transfer
agent in transferring
(or issuing)(electronically or
in certificated form)
any certificate
for Conversion
Shares to be issued to the Buyer
upon conversion of or otherwise pursuant
to the Note as and
when required by the Note
and this Agreement; and
(iii) it will not fail to remove
(or directs its transfer
agent not to remove or impairs, delays,
and/or hinders its
transfer agent from
removing) any restrictive
legend (or to
withdraw any
stop transfer instructions in respect
thereof) on any certificate for
any Conversion Shares issued
to the Buyer upon conversion
of or otherwise pursuant to the Note
as and when required
by the Note and this Agreement.
Nothing in this Section shall
affect in any way the Buyer’s
obligations and agreement
set forth in Section 2(g)
hereof to comply with all applicable
prospectus delivery requirements, if any,
upon re-sale of the Securities.
If the Buyer provides the Company,
at the cost of the Buyer,
with (i) an opinion of counsel
in form, substance and scope
customary for opinions in comparable transactions,
to the effect that a public sale
or transfer of such Securities
may be made
without registration under the 1933 Act
and such sale or transfer
is effected or (ii) the Buyer
provides reasonable assurances
that the Securities
can be
sold pursuant
to Rule 144, the Company shall
permit the transfer, and,
in the case of the Conversion Shares,
promptly instruct its
transfer agent
to issue one or more certificates,
free from restrictive legend,
in such
name and in such denominations
as specified by the Buyer.
The Company acknowledges that
a breach by it of its obligations
hereunder will cause
irreparable harm to the Buyer,
by vitiating the intent and purpose
of the transactions contemplated
hereby. Accordingly, the Company acknowledges
that the remedy at law for a
breach of its obligations under
this Section 5 may be inadequate
and agrees, in the event of a
breach or threatened
breach by the Company of the provisions
of this Section, that
the Buyer shall
be entitled, in addition to all
other available remedies,
to an
injunction restraining
any breach
and requiring
immediate transfer, without
the necessity of showing economic loss
and without any bond or
other security being required.


 


6.                     
Conditions to the
Company’s Obligation
to Sell.
The obligation of
the Company hereunder
to issue and
sell the Note to
the Buyer
at the
Closing is
subject to
the satisfaction,
at or
before the
Closing Date of
each of the
following conditions
thereto, provided that
these conditions are for the
Company’s sole benefit
and may be waived by the Company
at any time in its sole
discretion: same to the Company.


 



    	7



    	 



    




The
Buyer shall
have executed
this Agreement
and delivered
the:


 


a.                      
The Buyer
shall have
delivered the
Purchase Price
in accordance with
Section 1(b) above.


 


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


 


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


 


7.                     
Conditions to The
Buyer’s Obligation to
Purchase. The
obligation of
the Buyer hereunder
to purchase the
Note at
the Closing is subject
to the satisfaction,
at or
before the
Closing Date
of each
of the
following conditions,
provided that
these conditions
are for
the Buyer’s sole benefit
and may be
waived by the Buyer
at any time
in its sole discretion: the same to
the Buyer.


a.                  
The Company
shall have
executed this
Agreement and
delivered


 


b.                     
The Company
shall have
delivered to the
Buyer the
duly executed
Note (in such denominations as
the Buyer shall request) in accordance
with Section 1(b) above.


 


c.                      
The Irrevocable
Transfer Agent
Instructions, in form
and substance satisfactory
to a majority-in-interest of
the Buyer, shall
have been delivered to and
acknowledged in writing
by the
Company’s Transfer Agent.


 


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


 


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


 


f.                      
No event
shall have
occurred which
could reasonably
be expected
to have
a Material
Adverse Effect
on the
Company including but
not limited
to a change
in the 1934
Act reporting
status of the
Company or the
failure of
the Company to
be timely in
its 1934 Act
reporting obligations.


 


g.                     
The Conversion
Shares shall
have been
authorized for
quotation on
the OTCBB
and trading
in the Common
Stock on
the OTCBB
shall not
have been
suspended by
the SEC or the
OTCBB.


 


h.                     
The Buyer
shall have
received an
officer’s certificate
described in Section
3(c) above, dated
as of the
Closing Date.


 


 


8.                     
Governing Law; Miscellaneous.


 


a.                      
Governing Law.
This
Agreement
shall
be governed
by and
construed in accordance
with the laws
of the
State of New
York without
regard to
principles of
conflicts of laws.
Any action brought by
either party against the other
concerning the transactions contemplated
by this
Agreement shall be
brought only
in the state courts
of New York or in the federal
courts located in the state and county
of Nassau.  The parties
to this Agreement hereby irrevocably
waive any
objection to jurisdiction and
venue of any
action instituted hereunder
and shall not
assert any defense
based on lack of jurisdiction or venue
or based upon forum non conveniens.
The Company and Buyer
waive trial by
jury. The prevailing party shall
be entitled to recover from
the other party its reasonable
attorney's fees and
costs. In the event that
any provision
of this Agreement or any
other agreement delivered
in connection herewith
is invalid or unenforceable under
any applicable statute
or rule of law, then
such provision shall
be deemed inoperative to
the extent that
it may conflict
therewith and shall
be deemed
modified to conform
with such
statute or rule
of law. Any
such provision which
may prove
invalid or
unenforceable under
any law shall
not affect
the validity or enforceability
of any other provision
of any agreement.
Each party hereby irrevocably waives
personal service of
process and
consents to
process being served
in any suit, action
or proceeding in connection
with this Agreement or
any other Transaction
Document by mailing
a copy thereof via registered
or certified mail
or overnight delivery (with
evidence of delivery)
to such party at
the address in effect
for notices to it under this Agreement
and agrees that
such service shall
constitute good and sufficient
service of process
and notice thereof. Nothing
contained herein shall be deemed
to limit in any way any right to serve
process in any other manner permitted by law.


 



    	8



    	 



    

 





b.                     
Counterparts. This
Agreement may
be executed
in one or
more counterparts,
each of which
shall be
deemed an
original but all
of which
shall constitute
one and
the same
agreement and
shall become
effective when
counterparts have
been signed
by each
party and delivered to the
other party.


 


c.                      
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.


 


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


 


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


 


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


 


If
to the Company, to:


 


CO-SIGNER, INC.


8275
South Eastern Avenue -
Suite 200-661


 Las
Vegas, NV
89123


Attn:
KURTIS A. KRAMARENKO,
Chief Executive Officer



facsimile: [enter fax
number]


 


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


 [enter name of law
firm]


Attn:
[attorney name]


[enter
address line 1]


[enter
city, state, zip]


facsimile:
[enter fax number]


 


If
to the Buyer:


 


KBM
WORLDWIDE, INC.


80
Cuttermill Road – Suite
410


Great Neck,
NY  11021


Attn:
Seth Kramer, President



e-mail: info@kwbmlaw.com


 


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



Naidich Wurman Birnbaum &
Maday LLP


Attn:
Bernard S. Feldman,
Esq.


 facsimile:
516-466-3555


e-mail:
dyork@nwbmlaw.com


 


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


 



    	9



    	 



    

 





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


 


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


 


i.                       
Survival. The
representations and
warranties of
the Company and
the agreements
and covenants
set forth
in this Agreement
shall survive
the closing hereunder
notwithstanding any
due diligence investigation
conducted by or on
behalf of the Buyer. The Company
agrees to indemnify and hold harmless
the Buyer and all
their officers, directors, employees
and agents for loss or damage arising
as a result of or
related to any breach or alleged
breach by the Company of any
of its representations, warranties and
covenants set forth in this Agreement
or any of its covenants
and obligations under
this Agreement, including advancement
of expenses as they are
incurred.


 





j.                       
Publicity. The
Company, and
the Buyer
shall have
the right
to review
a reasonable
period of
time before
issuance of
any press releases,
SEC, OTCBB
or FINRA filings,
or any
other public statements
with respect
to the transactions contemplated
hereby; provided, however, that
the Company shall be entitled, without
the prior approval of the Buyer,
to make any
press release or SEC,
OTCBB (or other applicable
trading market) or FINRA
filings with respect to such
transactions as is required by
applicable law and
regulations (although the
Buyer shall
be consulted
by the Company
in connection
with any
such press release prior
to its release and shall
be provided with a copy thereof
and be given an opportunity to
comment thereon).


 


k.                     
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.


 


l.                       
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.


 


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


 


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


 


 CO-SIGNER,
INC.


 


/s/ Kurtis A. Kramarenko


By: Kurtis A. Kramarenko


Chief Executive Officer


 


 


KBM WORLDWIDE, INC.


 


/s/ Seth Kramer


By: Seth Kramer


Title: President


80 Cuttermill Road - Suite 410


Great Neck, NY 11021


 


 


	AGGREGATE
    SUBSCRJPTION AMOUNT:	 
	Aggregate
    Principal Amount of
    Note :	$32,500.00
	Aggregate
    Purchase Price:	$32,500.00
	K-1149(2) 6-5-2014

        irary@co-signer.com

        
	 
	kurt@co-signer.com	 


 









    	11