Document:

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of April 2, 2013, by and between GREENESTONE HEALTHCARE
CORPORATION, a Colorado corporation, with headquarters located at 5734 Yonge Street, Suite 300, North York, Ontario,
Canada M2M 4E7 (the “Company”), and ASHER ENTERPRISES, INC., a Delaware corporation, with its address at 1
Linden Place, Suite 207, 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 $108,500.00 (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, $0.01 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 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 the 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 March 20,
2013, 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

 

 

 

 

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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):

 

 

 

 

 

 

 

 

 

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“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, (i) 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 (ii) 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 (i) has been duly and validly authorized; (ii)
has been duly executed and delivered on behalf of the Buyer; and (iii) 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. 

 

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

 

 

 

 

 

 

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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) 100,000,000 shares of Common Stock, $0.01 par value per share, of which 27,234,279 shares are issued and outstanding as
of March 19, 2013; and (ii) other than disclosed on Schedule 3(c), there are no authorized shares of preferred stock; 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) exercisable for, or convertible into or exchangeable for shares of Common Stock and  4,000,000
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

 

 

 

 

 

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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 and except
for those disclosed on Schedule 3(c), (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 Officer 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

 

 

 

 

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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.

 

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

 

 

 

 

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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 December 31, 2012, 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 December 31, 2012, 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

 

 

 

 

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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)),
and except as disclosed on Schedule 3(m), 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 

 

 

 

 

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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).

 

o.                 
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges
and agrees that the Buyer is acting solely in the capacity of an arm’s length purchaser 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’s 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 September 30, 2012, 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.

 

 

 

 

 

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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 

 

 

 

 

 

    	11

    	 

    

 

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.

 

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.

 

 

 

    	12

    	 

    

 

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, including the terms and conditions thereof 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 financing (including debt with an equity component)
(“Future Offerings”) during the period beginning on the Closing Date and ending twelve (12) months following the Closing
Date. In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery of the notice
to the 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

 

 

 

 

 

    	13

    	 

    

 

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 (i) to reimburse Buyer’s expenses of $3,500 and (ii) to pay the Company’s outside
securities counsel expenses of $5,000.

 

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.

 

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 NYSE MKT LLC
(“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

 

 

 

 

    	14

    	 

    

 

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 (or
equivalent replacement quotation system), 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 

 

 

 

 

 

    	15

    	 

    

 

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:

 

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

 

 

 

 

 

    	16

    	 

    

 

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

 

c.                  
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. 

 

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

 

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:

 

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

 

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, 

 

 

 

 

 

    	17

    	 

    

 

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.

 

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.

 

 

 

 

    	18

    	 

    

 

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:

 

GREENESTONE HEALTHCARE CORPORATION

5734 Yonge Street, Suite 300

North York, Ontario, Canada M2M 4E7

Attn: Shawn
E. Leon, Chief Executive Officer

facsimile: (646) 607-5544

 

 

 

 

 

 

 

 

 

    	19

    	 

    

 

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

 

JSBarkats, PLLC

Attn: Sunny J.
Barkats, Esq.

18. E. 41st
Street, 19th Floor

New York, NY
10010

facsimile:
(646) 607-5544

 

If to the Buyer, to:

 

ASHER ENTERPRISES, INC.

1 Linden Pl.,
Suite 207

Great Neck, NY
11021

Attn:
Curt Kramer, President

facsimile:
516-498-9894

 

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

 

Naidich Wurman
Birnbaum & Maday, LLP

80 Cuttermill
Road, Suite 410

Great Neck, NY
11021

facsimile:
516-466-3555

 

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

 

g.                 
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties and their successors and assigns. Neither the Company nor the 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.

 

 

 

 

    	20

    	 

    

 

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.

 

[-signature page follows-]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	21

    	 

    

 

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

 

 

	GREENESTONE HEALTHCARE CORPORATION	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	/s/ Shawn E. Leon	 	 	 	 
	 	Name: Shawn E. Leon	 	 	 	 
	 	Title: Chief Executive Officer	 	 	 	 

 

 

	ASHER ENTERPRISES, INC.	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	 /s/ Curt Kramer	 	 	 	 
	 	Name: Curt Kramer	 	 	 	 
	 	
        Title: President

        1 Linden Pl., Suite 207

        Great Neck, NY. 11021
	 	 	 	 

 

 

 

AGGREGATE SUBSCRIPTION AMOUNT:

 

Aggregate Principal Amount of Note:$108,500.00

 

Aggregate Purchase Price:$108,500.00

 

 

shawnleon@rogers.com

sbarkats@jsbarkats.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	22

    	 

    

SCHEDULE 3(a)

 

SUBSIDIARIES

 

(1)              
1816191 Ontario Limited, an Ontario limited corporation; and

 

(2)              
Greenestone Clinic Muskoka Inc., an Ontario corporation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	23

    	 

    

 

SCHEDULE 3(c)

 

CAPITALIZATION

 

Preferred Stock

 

Series A Convertible Preferred Stock, par
value $1.00 per share

 

3,000,000 shares authorized and designated,
0 shares issued and outstanding

 

Series B Preferred Stock, par value $0.10
per share

 

2,000,000 shares authorized and designated,
0 shares issued and outstanding

 

On March 22, 2013, the Company is holding a
special meeting in order to amend the rights of the Series B Preferred Stock. Upon receiving shareholder approval, each share of
Series B Preferred Stock (i) will have 10:1 (ten-for-1) voting rights (ten common shares) and (ii) will be convertible into ten
shares of the Company’s common stock.

 

Convertible Notes

 

The notes are convertible at the option of
the holder up to the maturity date; any convertible debentures still outstanding as at their maturity date will automatically convert
into common shares of the Company. Accordingly, these convertible notes payable are considered current liabilities by nature. The
Company has adequate common shares in its treasury to cover the conversions if all notes are exercised.

 

The Company has the following convertible notes
outstanding as of December 31, 2012:

 

*The actual number of shares issued if converted will vary depending
on the exchange rate at time of conversion.

 

	Note 	 Amount 	Issuance Date	Conversion Price in USD	Number of Shares	Effect on Dilution	 Maturity Date 
	 	 	 	 	 	 	 	 	 
	1	$	48,245	January 31, 2011	$	0.10	482,448	1.90%	January 31, 2013
	2	 	25,128	March 30, 2011	$	0.15	167,517	0.67%	March 30, 2013
	3	 	50,000	March 30, 2011	$	0.15	333,333	1.32%	March 30, 2013
	4	 	15,000	March 30, 2011	$	0.15	100,000	0.40%	March 30, 2013
	5	 	30,153	March 30, 2011	$	0.15	201,020	0.80%	March 30, 2013
	6	 	10,051	March 31, 2011	$	0.15	67,007	0.27%	March 31, 2013
	7	 	10,051	March 31, 2011	$	0.15	67,007	0.27%	March 31, 2013
	8	 	10,051	March 31, 2011	$	0.15	67,007	0.27%	March 31, 2013
	9	 	100,510	March 31, 2011	$	0.15	670,067	2.62%	March 31, 2013
	10	 	50,255	March 31, 2011	$	0.15	335,033	1.33%	March 31, 2013
	11	 	30,153	March 31, 2011	$	0.15	201,020	0.80%	March 31, 2013
	12	 	5,026	March 31, 2011	$	0.15	33,503	0.13%	March 31, 2013
	13	 	6,031	June 15, 2011	$	0.10	60,306	0.24%	June 15, 2013

 

 

 

 

    	24

    	 

    

 

	14	 	8,041	June 15, 2011	$	0.10	80,408	0.32%	June 15, 2013
	15	 	4,020	June 15, 2011	$	0.10	40,204	0.16%	June 15, 2013
	16	 	201,020	June 24, 2011	$	0.15	1,340,133	5.10%	June 24, 2013
	17	 	30,153	June 30, 2011	$	0.15	201,020	0.80%	June 30, 2013
	18	 	16,082	June 30, 2011	$	0.15	107,211	0.43%	June 30, 2013
	19	 	70,357	June 30, 2011	$	0.15	469,047	1.85%	June 30, 2013
	20	 	14,574	June 30, 2011	$	0.15	97,160	0.39%	June 30, 2013
	21	 	50,255	June 30, 2011	$	0.15	335,033	1.33%	June 30, 2013
	22	 	145,740	June 30, 2011	$	0.15	971,597	3.75%	June 30, 2013
	23	 	5,026	July 30, 2011	$	0.15	33,503	0.13%	July 30, 2013
	24	 	5,026	July 30, 2011	$	0.15	33,503	0.13%	July 30, 2013
	25	 	5,026	July 30, 2011	$	0.15	33,503	0.13%	July 30, 2013
	26	 	10,000	July 30, 2011	$	0.15	66,667	0.27%	July 30, 2013
	27	 	10,051	July 30, 2011	$	0.15	67,007	0.27%	July 30, 2013
	28	 	9,046	July 30, 2011	$	0.15	60,306	0.24%	July 30, 2013
	29	 	2,261	July 30, 2011	$	0.15	15,077	0.06%	July 30, 2013
	30	 	50,255	October 26, 2011	$	0.10	502,550	1.98%	October 26, 2013
	31	 	100,510	October 31, 2011	$	0.15	670,067	2.62%	October 31, 2013
	32	 	70,357	November 24, 2011	$	0.15	469,047	1.85%	November 24, 2013
	33	 	15,077	November 30, 2011	$	0.15	100,510	0.40%	November 30, 2013
	34	 	15,077	November 30, 2011	$	0.15	100,510	0.40%	November 30, 2013
	35	 	23,720	November 30, 2011	$	0.15	158,136	0.63%	November 30, 2013
	36	 	25,160	December 31, 2011	$	0.15	167,733	0.67%	December 31, 2013
	37	 	20,102	December 31, 2011	$	0.15	134,013	0.53%	December 31, 2013
	38	 	10,051	December 31, 2011	$	0.15	67,007	0.27%	December 31, 2013
	39	 	22,615	December 31, 2011	$	0.15	150,765	0.60%	December 31, 2013
	40	 	45,230	December 31, 2011	$	0.15	301,530	1.19%	December 31, 2013
	41	 	50,255	December 31, 2011	$	0.15	335,033	1.33%	December 31, 2013
	42	 	20,102	December 31, 2011	$	0.15	134,013	0.53%	December 31, 2013
	43	 	15,077	December 31, 2011	$	0.15	100,510	0.40%	December 31, 2013
	44	 	50,000	January 15, 2012	$	0.20	250,000	0.99%	January 15, 2014
	45	 	10,051	January 24, 2012	$	0.20	50,255	0.20%	January 24, 2014
	46	 	7,538	January 26, 2012	$	0.20	37,691	0.15%	January 26, 2014
	47	 	30,153	January 31, 2012	$	0.20	150,765	0.60%	January 31, 2014
	48	 	10,051	February 10, 2012	$	0.20	50,255	0.20%	February 10, 2014
	59	 	100,510	March 4, 2012	$	0.20	502,550	1.98%	March 4, 2014
	50	 	100,510	April 18, 2012	$	0.45	223,356	0.89%	April 18, 2014
	51	 	50,255	May 31, 2012	$	1.00	50,255	0.20%	May 31, 2014
	 	
         

        $
	
         

        1,820,713
	 	 	 	
         

        11,945,746
	 	 
	 	 	 	 	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	25

    	 

    

 

SCHEDULE 3(i)

 

LITIGATION

 

The Company’s wholly-owned subsidiary
1816191 Ontario Limited received notice during the first quarter of 2011 that an individual that suffered a perforated colon during
a colonoscopy procedure. This individual delivered notice that he intended to litigate against 1816191 Ontario Limited and the
doctor that performed the procedure. The insurer for the doctor and the Company was notified. As of March 19, 2013, no claim has
been filed against the Company, its subsidiary or any doctor with respect to this matter.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	26

    	 

    

 

SCHEDULE 3(m)

 

CERTAIN TRANSACTIONS

 

Greenestone Clinic Muskoka Inc., the Company’s
wholly-owned subsidiary is a party to a lease agreement with Cranberry Cove Holdings, Ltd., an Ontario
limited corporation (“Cranberry”), pursuant to which the Company leases a property from Cranberry at a rate of $55,000
per month, for the period from April 1, 2013 to March 1, 2016. Shawn E. Leon, the Company’s Chief Executive Officer, is the
owner and Chief Executive Officer of Cranberry.

 

As of December 31, 2012, a total of $190,484
is owed to executive officers or their affiliates for loans payable, as detailed in the below table:

 

	Name	 	Total Amount Owed ($)	 	Due Date
	 	 	 	 	 
	Greenestone Clinic, Inc. (1)	 	$40,484	 	On Demand
	 	 	 	 	 
	Dr. Jay Parekh (2)	 	$150,000	 	On Demand

 

		(1)	Shawn E. Leon, the Company’s Chief Executive Officer, is also the
Chief Executive Officer of Greenestone Clinic, Inc.

 

		(2)	Dr. Jay Parekh is a 5% holder of the Company’s common stock and executive
officer of a Company subsidiary.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	27

    	 

    

SCHEDULE 3(t)

 

TITLE TO PROPERTY

 

The Company does not hold title to any property.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	28ex10-1.htm

Exhibit 10.1

 

FIRST AMENDMENT TO

LOAN AND SECURITY AGREEMENT

 

    This First Amendment to Loan and Security Agreement is entered into as of March 28, 2013 (the “Amendment”), by and between COMERICA BANK (“Bank”) and GLOWPOINT, INC. (“Borrower”).

 

RECITALS

 

    Borrower and Bank are parties to that certain Loan and Security Agreement dated as of October 1, 2012, as may be amended from time to time (the “Agreement”).  The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

    NOW, THEREFORE, the parties agree as follows:

 

    1. The following definitions are each added to, or amended in, as the case may be, Exhibit A referred to in Section 1.1 of the Agreement to read as follows:

 

       “Cash” means unrestricted cash and cash equivalents.

 

      “EBITDA” means with respect to any fiscal period an amount equal to the sum of (a) Consolidated Net Income of the Borrower and its Subsidiaries for such fiscal period, plus (b) in each case to the extent deducted in the calculation of the Borrower's Consolidated Net Income and without duplication, (i) depreciation and amortization for such period, plus (ii) income tax expense for such period, plus (iii) Consolidated Total Interest Expense for such period, plus (iv) non-cash expense associated with issuing capital stock and granting stock options, plus (v) severance charges (of up to $100,000 for the second quarter of 2013, and shall be no more than $100,000 in each of the third and fourth quarters of 2013) , impairment charges, and non-recurring charges and gains, for such period, all as determined in accordance with GAAP, provided that impairment charges added back under clause (v) may not exceed $500,000 for the balance of 2013, and may not exceed $500,000 per year thereafter.

 

2. Section 2.1(b)(i) of the Agreement is amended to read as follows:

 

(i)           Amount.  Subject to and upon the terms and conditions of this Agreement Borrower may request Advances in an aggregate outstanding amount not to exceed the lesser of (A) the Revolving Line or (B) the Borrowing Base, less in each case any amount outstanding under the Growth Capital Line up to One Million Five Hundred Thousand Dollars ($1,500,000) (provided that as a condition precedent to the initial Advance, Bank shall have received an audit of the Collateral, the results of which shall be satisfactory to Bank).  Amounts borrowed pursuant to this Section 2.1(b) may be repaid and re-borrowed at any time without penalty or premium prior to the Revolving Maturity Date, at which time all Advances under this Section 2.1(b) shall be immediately due and payable.

 

3. The third sentence of Section 2.1(d)(i) is amended to read as follows:  “The aggregate outstanding amount of Growth Capital Advances shall not exceed the lesser of (a) the Growth Capital Line or (b) the Borrowing Base.”

 

4. The first line of Section 6.2(a) is amended to read as follows:  “(a)  On the first and fifteenth day of each month, within 15 days, Borrower shall deliver to Bank . . .”

 

5. Section 6.7 of the Agreement is amended to read as follows:

 

6.7           Financial Covenants.

 

(a)           Senior Funded Debt to EBITDA Ratio.  Borrower shall maintain at all times a ratio of Obligations to consolidated EBITDA of not more than 2.00 to 1.0 (i) measured on an annualized trailing three (3) month basis for the period beginning January 1, 2013, through June 30, 2013, (ii) measured on an annualized trailing six (6) month basis for the period beginning July 1, 2013, through September 30, 2013, (iii) measured on an annualized trailing nine (9) month basis for the period beginning October 1, 2013, through December 31, 2013, and (iv) measure on a trailing twelve (12) month basis for the period beginning January 1, 2014, and at all times thereafter.

 

  

-1-

  

(b)           Total Funded Debt to EBITDA Ratio.  Borrower shall maintain at all times a ratio of Total Funded Debt to EBITDA of not more than (i) measured on an annualized trailing three (3) month basis and for the period beginning on January 1, 2013, through March 31, 2013, 5.25 to 1.00, (ii) measured on an annualized three (3) month basis and for the period beginning on April 1, 2013, through June 30, 2013, 5.00 to 1.00, (iii) measured on an annualized six (6) month basis and for the period beginning on July 1, 2013, through September 30, 2013, 4.75 to 1.00, (iv) measured on an annualized nine (9) month basis and for the period beginning on October 1, 2013, through December 31, 2013, 4.25 to 1.00, (v) measured on a twelve (12) month basis and for the period beginning on January 1, 2014, through March 31, 2014, 3.75 to 1.00, and (vi) measured on a twelve (12) month basis and for the period beginning on April 1, 2014, and at all times thereafter, 3.00 to 1.00.  As used herein “Total Funded Debt” shall mean the sum of (A) the Obligations and (B) Subordinated Debt (including without limitation and without duplication all Indebtedness owing to Escalate and all Indebtedness under the Seller Note).

 

(c)           Fixed Charge Ratio.  Borrower shall maintain at all times a ratio of (i) EBITDA for such period minus capital expenditures made during such period, minus distributions paid during such period, and minus income taxes paid during such period to (ii) the current portion of all long-term Indebtedness (excluding without limitation the Seller Note Payments and any balance due under the Revolving Line) plus interest expense paid during such period, of at least (A) measured on an annualized trailing three (3) month basis and for the period beginning on January 1, 2013, through March 31, 2013, 0.70 to 1.00, (B) measured on an annualized three (3) month basis and for the period beginning on April 1, 2013, through June 30, 2013, 0.80 to 1.00, (C) measured on an annualized six (6) month basis and for the period beginning on July 1, 2013, through September 30, 2013, 0.80 to 1.00, (D) measured on an annualized nine (9) month basis and for the period beginning on October 1, 2013, through December 31, 2013, 0.80 to 1.00, (E) measured on a twelve (12) month basis and for the period beginning on January 1, 2014, through March 31, 2014, 0.80 to 1.00, (F) measured on a twelve (12) month basis and for the period beginning on April 1, 2014, through June 30, 2014, 0.80 to 1.00, and (G) measured on a twelve (12) month basis and for the period beginning on July 1, 2014, and at all times thereafter, 1.00 to 1.00.  As used herein, “Seller Note Payments” shall mean an amount equal to: (i) $750,000 (the “October Payment Amount”) for the month of October, 2012; (ii) the October Payment Amount plus an amount equal to $125,000 for each month thereafter through April 30, 2013; (iii) $1,500,000 (the “April Payment Amount”) beginning on April 1, 2013 and for each month thereafter until December 31, 2013, and (iv) the April Payment Amount minus an amount equal to $125,000 for each month thereafter through January 1, 2015.

 

6. New Sections 6.7(d) and 6.7(e) are added to the Agreement to read as follows:

 

(d)           Minimum Cash.  Borrower shall maintain at all times a balance of unrestricted cash in a separate collateral account at Bank in an amount equal to at least Four Hundred Thousand Dollars ($400,000).  Borrower may not withdraw funds from such account without Bank’s prior written consent.

 

(e)           Extraordinary Expenses.  Borrower shall not incur extraordinary expenses in connection with acquisitions in excess of $100,000 in the fiscal quarter ending June 30, 2013, or in excess of $100,000 in the aggregate for the fiscal quarters ending September 30, 2014 and December 31, 2014.

 

7. Exhibit D (Borrowing Base Certificate) to the Agreement is hereby amended in its entirety and replaced with Exhibit D attached hereto.

 

8. Exhibit E (Compliance Certificate) to the Agreement is hereby amended in its entirety and replaced with Exhibit E attached hereto.

 

9. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement.  The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects.  Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof.  Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

  

-2-

  

10. Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and no Event of Default has occurred and is continuing.

 

11. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

 

12. As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance reasonably satisfactory to Bank, the following:

 

(a) this Amendment duly executed by Borrower;

 

(b) an officer’s certificate of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Amendment;

 

(c) an Affirmation of Unconditional Secured Guaranty (GP Communication, LLC)

 

(d) Affirmation of Subordination and Intercreditor Agreement (Escalate Capital Partners SBIC, L.P.);

 

(e) Affirmation of Unconditional Secured Guaranty (Affinity Videonet, Inc.);

 

(f) An amendment fee equal to $5,000;

 

(g) an amount equal to all Bank Expenses incurred through the date of this Amendment; and

 

(h) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]

 

  

-3-

  

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

 

	  	
GLOWPOINT, INC.

 

By:  /s/ Peter Holst

Title:  President and Chief Executive Officer

	  	
 

COMERICA BANK

 

By:  /s/ Ramesh Bart

Title:  VP

 

  

-4-

  

EXHIBIT D

 

BORROWING BASE CERTIFICATE

 

[TO BE PROVIDED BY BANK]

 

  

-5-

  

EXHIBIT E

 

COMPLIANCE CERTIFICATE

 

	
Please send all Required Reporting to:

	
Comerica Bank

Technology & Life Sciences Division

Loan Analysis Department

250 Lytton Avenue

3rd Floor, MC 4240

Palo Alto, CA 94301

Phone:  (650) 462-6060

Fax:  (650) 462-6061

 

FROM:                 GLOWPOINT, INC.

 

The undersigned authorized Officer of GLOWPOINT, INC. ("Borrower"), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the "Agreement"), (i) Borrower is in complete compliance for the period ending __________________________ with all required covenants, including without limitation the ongoing registration of intellectual property rights in accordance with Section 6.8, except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof, except to the extent expressly referring to another date.  Attached herewith are the required documents supporting the above certification.  The Officer further certifies that the financial statements attached hereto were prepared in accordance with Generally Accepted Accounting Principles (GAAP), consistently applied from one period to the next except as explained in an accompanying letter or footnotes.

 

Please indicate compliance status by circling Yes/No under "Complies" or "Applicable" column.

 

	
REPORTING COVENANTS

	
REQUIRED

	
COMPLIES

	
Company Prepared Monthly F/S

	
Monthly, within 30 days

	
YES

	
NO

	
Company Prepared Quarterly F/S

	
Quarterly, within 30 days

	
YES

	
NO

	
Compliance Certificate

	
Monthly, within 30 days

	
YES

	
NO

	
CPA Audited, Unqualified F/S

	
Annually, within 120 days of FYE (beginning with FYE 2012)

	
YES

	
NO

	
Borrowing Base Cert., A/R & A/P Agings

	
As of the 15th and last day of each month, within 15 days

	
YES

	
NO

	
Contractual backlog trend report

	
Within 3 days of A/R & A/P Agings due date

	
YES

	
NO

	
Annual Business Plan (incl. operating budget)

	
within 30 days of beginning of fiscal year

	
YES

	
NO

	
Audit

	
Initial; Semi-annual thereafter

	
YES

	
NO

	
Intellectual Property Report 

If Public:

	
Quarterly, within 30 days

	  	  
	
10-Q

	
Quarterly, within 5 days of SEC filing (50 days)

	
YES

	
NO

  

-6-

  

 

	
10-K

	
Annually, within 5 days of SEC filing (95 days)

	
YES

	
NO

	
Total amount of Borrower's cash and investments

Total amount of Borrower's cash and investments maintained with Bank

	
Amount: $                                             

 

Amount: $                                             

	
YES

 

YES

 

	
NO

 

NO

	  	
 

DESCRIPTION

	
 

APPLICABLE

	
Legal Action > $100,000 (Sect. 6.2(iv))

	
Notify promptly upon notice                                                       

	
YES

	
NO

	
Inventory Disputes > $100,000 (Sect. 6.3)

	
Notify promptly upon notice                                                       

	
YES

	
NO

	
Mergers & Acquisitions > $100,000 (Sect. 7.3)

	
Notify promptly upon notice                                                       

	
YES

	
NO

	
Cross default with other agreements>$100,000 (Sect. 8.7)

	
Notify promptly upon notice                                                       

	
YES

	
NO

	
Judgments > $100,000 (Sect. 8.9)

	
Notify promptly upon notice                                                       

	
YES

	
NO

	  

FINANCIAL COVENANTS

	  

REQUIRED                                     ACTUAL

	
 

 COMPLIES

	
Senior Funded Debt to EBITDA Ratio

Total Funded Debt to EBITDA Ratio

Fixed Charge Ratio

Minimum Cash in Collateral Account

Extraordinary Expenses

 

	
See Section 6.7(a)                 ____:____

See Section 6.7(b)                 ____:____

See Section 6.7(c)                 ____:____

$400,000

See Section 6.7(e)                 $____

	
YES                 NO

YES                NO

YES                 NO

YES                NO

	
 

OTHER COVENANTS

	
 

REQUIRED                                   ACTUAL

	
 

COMPLIES

	
Permitted Indebtedness for equipment leases

	
<$100,000                                                                            

	
YES

	
NO

	
Permitted Investments for stock repurchase

	
<$100,000                                                                            

	
YES

	
NO

	
Permitted Investments for subsidiaries

	
<$100,000                                                                            

	
YES

	
NO

	
Permitted Investments for employee loans

	
<$100,000                                                                            

	
YES

	
NO

	
Permitted Investments for joint ventures

	
<$100,000                                                                            

	
YES

	
NO

	
Permitted Liens for equipment leases

	
<$100,000                                                                            

	
YES

	
NO

	
Permitted Transfers

	
<$100,000                                                                            

	
YES

	
NO

 

  

-7-

  

Please Enter Below Comments Regarding Violations:

 

The Officer further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement, including, without limitation, the financial covenants, no credit extensions will be made.

 

 

 

Very truly yours,

 

 

Authorized Signer

 

Name:                                           

 

Title:                                           

 

 

  

-8-

  

Corporation Resolutions and Incumbency Certification

 

Authority to Procure Loans

 

I certify that I am the duly elected and qualified Secretary of GLOWPOINT, INC., a Delaware corporation (the “Corporation”); that the following is a true and correct copy of resolutions duly adopted by the Board of Directors of the Corporation in accordance with its bylaws and applicable statutes.

 

Copy of Resolutions:

 

Be it Resolved, That:

 

	
1.

	
Any one (1) of the following __________________________ (insert titles only) of the Corporation are/is authorized, for, on behalf of, and in the name of the Corporation to:

 

    (a)           Negotiate and procure loans, letters of credit and other credit or financial accommodations from Comerica Bank (“Bank”), a Texas banking association, from time to time, in an unlimited amount.

 

    (b)           Discount with the Bank, commercial or other business paper belonging to the Corporation made or drawn by or upon third parties, without limit as to amount;

 

    (c) Purchase, sell, exchange, assign, endorse for transfer and/or deliver certificates and/or instruments representing stocks, bonds, evidences of Indebtedness or other securities owned by the Corporation, whether or not registered in the name of the Corporation;

 

    (d)  Give security for any liabilities of the Corporation to the Bank by grant, security interest, assignment, lien, deed of trust or mortgage upon any real or personal property, tangible or intangible of the Corporation;

 

    (e)  Issue a warrant or warrants to purchase the Corporation’s capital stock; and

 

    (f)  Execute and deliver in form and content as may be required by the Bank any and all notes, evidences of Indebtedness, applications for letters of credit, guaranties, subordination agreements, loan and security agreements, financing statements, assignments, liens, deeds of trust, mortgages, trust receipts and other agreements, instruments or documents to carry out the purposes of these Resolutions, ,and any and all amendments or modifications thereto, any or all of which may relate to all or to substantially all of the Corporation's property and assets.

 

 

  

-9-

  

	
2.

	
Said Bank be and it is authorized and directed to pay the proceeds of any such loans or discounts as directed by the persons so authorized to sign, whether so payable to the order of any of said persons in their individual capacities or not, and whether such proceeds are deposited to the individual credit of any of said persons or not;

 

	
3.

	
Any and all agreements, instruments and documents previously executed and acts and things previously done to carry out the purposes of these Resolutions are ratified, confirmed and approved as the act or acts of the Corporation.

 

	
4.

	
These Resolutions shall continue in force, and the Bank may consider the holders of said offices and their signatures to be and continue to be as set forth in a certified copy of these Resolutions delivered to the Bank, until notice to the contrary in writing is duly served on the Bank (such notice to have no effect on any action previously taken by the Bank in reliance on these Resolutions).

 

	
5.

	
Any person, corporation or other legal entity dealing with the Bank may rely upon a certificate signed by an officer of the Bank to effect that these Resolutions and any agreement, instrument or document executed pursuant to them are still in full force and effect and binding upon the Corporation.

 

	
6.

	
The Bank may consider the holders of the offices of the Corporation and their signatures, respectively, to be and continue to be as set forth in the Certificate of the Secretary of the Corporation until notice to the contrary in writing is duly served on the Bank.

 

I further certify that the above Resolutions are in full force and effect as of the date of this Certificate; that these Resolutions and any borrowings or financial accommodations under these Resolutions have been properly noted in the corporate books and records, and have not been rescinded, annulled, revoked or modified; that neither the foregoing Resolutions nor any actions to be taken pursuant to them are or will be in contravention of any provision of the articles of incorporation or bylaws of the Corporation or of any agreement, indenture or other instrument to which the Corporation is a party or by which it is bound; and that neither the articles of incorporation nor bylaws of the Corporation nor any agreement, indenture or other instrument to which the Corporation is a party or by which it is bound require the vote or consent of shareholders of the Corporation to authorize any act, matter or thing described in the foregoing Resolutions.

 

I further certify that the following named persons have been duly elected to the offices set opposite their respective names, that they continue to hold these offices at the present time, and that the signatures which appear below are the genuine, original signatures of each respectively:

 

(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)

 

  

-10-

  

 

	
NAME (Type or Print)

	
TITLE

 

	
SIGNATURE

	
_________________________

 

	
_______________

	
___________________________

	
_________________________

 

	
_______________

	
___________________________

	
_________________________

 

	
_______________

	
___________________________

	
_________________________

 

	
_______________

	
___________________________

	
_________________________

	
_______________

	
___________________________

 

 

In Witness Whereof, I have affixed my name as Secretary and have caused the corporate seal (where available) of said Corporation to be affixed on March __, 2013.

 

 

            ______________________________

 

                           Secretary

 

***

 

The Above Statements are Correct.  _________________________________________________________

 

signature of officer or director or, if none, a shareholder other than secretary when secretary is authorized to sign alone.

 

Failure to complete the above when the Secretary is authorized to sign alone shall constitute a certification by the Secretary that the Secretary is the sole Shareholder, Director and Officer of the Corporation.

 

-11-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00215-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00215-of-00352.parquet"}]]