Document:

SECURITIES
PURCHASE AGREEMENT

 

THIS
SECURITIES PURCHASE
AGREEMENT (this
“Agreement”), dated
as of May
29, 2015, is
entered into
by and between
AVALANCHE INTERNATIONAL,
CORP., a Nevada
corporation (“Company”),
and TYPENEX
CO-INVESTMENT, LLC, a
Utah limited liability
company, its successors
and/or assigns (“Investor”).

 

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

 

B.                
Investor
desires
to purchase
and Company
desires to issue
and sell, upon
the terms
and conditions
set forth
in this
Agreement (i)
a Secured
Convertible Promissory
Note, in the
form attached
hereto as
Exhibit A,
in the original
principal amount
of $252,500.00
(the “Note”),
convertible into
shares of common
stock, $0.001 par value per share,
of Company
(the “Common Stock”),
upon the terms and
subject to the limitations
and conditions set forth
in such Note, and (ii) 15,000
shares of Common Stock (the
“Origination Shares”).

 

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

 

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

 

NOW,
THEREFORE, in
consideration of
the above recitals and
other good and
valuable consideration, the
receipt and adequacy
of which
are hereby
acknowledged, Company
and Investor
hereby agree
as follows:

 

1.                 
Purchase and Sale
of Securities.

 

1.1.           
Purchase
of Securities.
Company shall issue
and sell
to Investor
and Investor
agrees to
purchase from
Company the
Note and
the Origination
Shares. In
consideration thereof,
Investor shall
pay (i) the
amount designated
as the
initial cash purchase
price on Investor’s
signature page
to this Agreement (the “Initial
Cash Purchase Price”),
and (ii) issue
to Company the
Investor Notes (the sum
of the initial principal
amount of the Investor Notes,
together with the Initial Cash
Purchase Price, the “Purchase
Price”). The Purchase Price,
the OID (as defined
below), and the Transaction Expense
Amount (as defined
below) are
allocated to the
Tranches (as
defined in the
Note) of the
Note and to the Origination Shares
as set forth in the
table attached
hereto as Exhibit B.
For the avoidance
of doubt, the
Initial Cash
Purchase Price
constitutes payment
in full for
the Initial
Tranche (as defined
in the Note)
and the Origination Shares.

 

1.2.           
Form of Payment.
On the Closing
Date, (i) Investor
shall pay
the Purchase
Price to
Company by
delivering the following
at the Closing:
(A) the
Initial Cash
Purchase Price,
which shall
be delivered
by wire
transfer of
immediately available
funds to Company,
in accordance
with Company’s
written wiring instructions; (B)
Investor Note
#1 in the principal
amount of
$50,000.00 duly
executed and substantially
in the
form attached
hereto as Exhibit
C (“Investor Note
#1”);
(C) Investor
Note #2
in the principal
amount of $50,000.00 duly
executed and substantially
in the form attached
hereto as Exhibit C
(“Investor Note
#2”); and (D)
Investor Note
#3 in the
principal amount
of $50,000.00
duly executed
and substantially in the form
attached hereto as Exhibit
C (“Investor Note
#3”, and together with
Investor

    	1

    	 

    

 

Note
#2, the
“Investor Notes”);
and (ii) Company
shall deliver
the duly
executed Note
on behalf
of Company
and deliver
a certificate
representing the Origination
Shares, to
Investor, against
delivery of such Purchase
Price.

 

1.3.           
Closing
Date.
Subject to
the satisfaction
(or written
waiver) of
the conditions
set forth
in Section
5 and Section
6 below,
the date
and time
of the issuance
and sale
of the
Securities pursuant
to this
Agreement (the
“Closing Date”)
shall be 5:00
p.m., Eastern
Time on
or about May
29, 2015, or such
other mutually agreed
upon time. The closing
of the transactions contemplated
by this Agreement (the “Closing”)
shall occur on the
Closing Date
by means of
the exchange
by express courier and email
of .pdf documents, but shall
be deemed to have occurred
at the offices of Hansen
Black Anderson Ashcraft PLLC
in Lehi, Utah.

 

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

 

1.5.           
Collateral
for
Investor
Notes.
Initially, none
of the
Investor Notes
will be
secured, but
all or any
of the Investor
Notes may
become secured
subsequent to
the Closing
by such collateral
and at
such time
as determined
by Investor
in its
sole discretion.
In the
event Investor desires
to secure any of the Investor
Notes, Company shall timely
execute any and all amendments and documents
and take such other measures
requested by Investor that are
necessary or advisable in order
to properly secure
the applicable Investor Notes.

 

1.6.           
Original
Issue
Discount; Transaction
Expenses. The
Note carries
an original
issue discount
of $22,500.00
(the “OID”).
In addition,
Company agrees
to pay $5,000.00
to Investor
to cover
Investor’s legal fees,
accounting costs, due
diligence, monitoring
and other transaction 
costs incurred
in connection
with the
purchase and
sale of the Securities
(the “Transaction
Expense Amount”),
all of which amount is included
in the initial principal
balance of the Note. The Purchase
Price, therefore, shall
be $225,000.00,
computed as follows: $252,500.00
original principal balance,
less the OID, less the Transaction
Expense Amount. The Initial Cash
Purchase Price shall be the
Purchase Price less the sum of
the initial principal amounts
of the
Investor Notes. The portion
of the OID
and the Transaction Expense
Amount allocated to the
Initial Cash Purchase Price
are set forth on
Exhibit B.

 

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

 

3.                 
Representations
and Warranties
of Company.
Company represents
and warrants
to Investor
that: (i)
Company is
a corporation
duly organized,
validly existing
and in
good standing
under the
laws of
its state
of incorporation
and has
the requisite
corporate power
to own
its properties
and to carry
on its business
as now being
conducted; (ii)
Company is
duly qualified
as a foreign
corporation to do business
and is in good standing
in each jurisdiction where
the nature of the
business conducted or
property owned by it makes
such qualification necessary;
(iii) Company has registered its Common
Stock under Section 15(d)
of the Securities Exchange
Act of 1934,
as amended (the “1934
Act”), and
is obligated to file reports
pursuant to Section 13 or Section
15(d) of the 1934 Act; (iv)
each of the Transaction Documents
and the transactions
contemplated hereby
and thereby, have been duly and
validly authorized by Company;
(v) this Agreement, the Note,
the Security Agreement
and the other Transaction Documents
have been duly executed
and delivered by Company and
constitute the valid and binding
obligations of Company
enforceable in accordance
with their
terms, subject
as to
enforceability only
to general principles
of equity
and to bankruptcy,
insolvency, moratorium,
and other
similar laws
affecting the  enforcement of creditors’
rights  generally; 
(vi)  the
 execution 
and  delivery 
of  the  Transaction

    	2

    	 

    

 

Documents
by Company,
the issuance
of Securities
in accordance
with the
terms hereof,
and the
consummation by
Company of
the other
transactions contemplated
by the Transaction
Documents do not
and will
not conflict
with or
result in
a breach
by Company
of any of
the terms
or provisions
of, or
constitute a
default under (a)
Company’s formation documents or
bylaws, each
as currently
in effect,
(b) any indenture,
mortgage, deed
of trust,
or other
material agreement
or instrument
to which
Company is
a party or by which it or
any of its properties
or assets are bound,
including any listing agreement
for the Common Stock,
or (c) any existing applicable law, rule,
or regulation or any applicable
decree, judgment, or order
of any court, United States
federal or state regulatory body,
administrative agency, or other governmental
body having
jurisdiction over
Company or any
of Company’s
properties or assets; (vii) no
further authorization, approval
or consent of any court,
governmental body, regulatory
agency, self- regulatory
organization, or stock exchange
or market or the stockholders or any
lender of Company is required
to be obtained by Company
for the issuance of the Securities
to Investor; (viii)
none of Company’s
filings with
the SEC contained, at
the time they were
filed, any untrue statement of
a material fact
or omitted
to state
any material fact
required to be
stated therein
or necessary
to make
the statements made
therein, in light of the circumstances
under which they were made,
not misleading; (ix) Company has filed
all reports, schedules,
forms, statements and other documents
required to be filed by Company
with the SEC under the 1934
Act on a timely basis or has
received a valid extension of
such time of filing
and has
filed any
such report,
schedule, form,
statement or other
document prior to
the expiration
of any such extension;
(x) Company has not
consummated any financing
transaction that has
not been disclosed
in a periodic
filing with the SEC
under the 1934
Act; (xi) Company
is not currently,
nor has it
been since July
21, 2014, a
“Shell Company,”
as such type
of “issuer”
is described
in Rule
144(i)(1) under
the 1933 Act;
(xii) with
respect to
any commissions,
placement agent
or finder’s
fees or
similar payments
that will or
would become
due and owing
by Company
to any person
or entity as
a result of
this Agreement
or the transactions contemplated
hereby (“Broker
Fees”), any
such Broker Fees will be
made in full compliance with
all applicable laws
and regulations
and only
to a person
or entity
that is a registered
investment adviser or
registered broker-dealer; (xiii)
Investor shall
have no
obligation with
respect to any Broker Fees or
with respect
to any claims
made by or on
behalf of
other persons
for fees of
a type
contemplated in this
subsection that
may be
due in
connection with
the transactions contemplated
hereby and Company shall
indemnify and hold harmless each
of Investor, Investor’s
employees, officers, directors,
stockholders, managers, agents,
and partners, and their respective
affiliates, from and against
all claims, losses,
damages, costs (including the costs
of preparation and attorneys’
fees) and expenses suffered
in respect of any such claimed
or existing Broker Fees; (xiv)
when issued, the Origination Shares
and the Conversion
Shares will be
duly authorized,
validly issued,
fully paid for
and non-assessable, free
and clear of all
liens, claims, charges and
encumbrances; (xv) neither Investor
nor any of its officers, directors,
members, managers, employees,
agents or representatives
has made any representations
or warranties to
Company or any of its officers, directors,
employees, agents or representatives
except as expressly set forth
in the Transaction Documents
and, in making
its decision to
enter into
the transactions contemplated
by the Transaction Documents,
Company is not relying on any representation,
warranty, covenant or promise
of Investor or its officers,
directors, members, managers, employees,
agents or representatives other
than as set forth in the
Transaction Documents; and (xvi)
Company has performed due diligence
and background research on Investor
and its affiliates including,
without limitation, John M. Fife, and,
to its satisfaction, has
made inquiries with
respect to all
matters Company may
consider relevant
to the undertakings and relationships
contemplated by the Transaction Documents
including, amongotherthings,thefollowing:
 http://investing.businessweek.com/research/stocks/people/person.asp?personId=7505107&ticker=UAHC;
SEC Civil Case
No. 07-C-0347
(N.D. Ill.);
SEC Civil Action
No. 07-CV-347
(N.D. Ill.);
and FINRA Case
#2011029203701. Company, being
aware of the matters described in
subsection (xvi)
above, acknowledges and agrees
that such matters, or any
similar matters, have no bearing
on the transactions contemplated
by the Transaction Documents
and covenants and agrees it will
not use any such information as
a defense to performance
of its obligations under
the Transaction Documents or in any
attempt to avoid, modify or
reduce such obligations
and shall not pay
such proceeds to any other party
pursuant to any financing
transaction effected prior to
the date hereof.

    	3

    	 

    

 

4.                 
Company
Covenants.
Until
all
of Company’s
obligations under
all of
the Transaction
Documents are
paid and performed
in full,
or within
the timeframes
otherwise specifically
set forth
below, Company
shall comply with the following
covenants: (i) so long
as Investor beneficially
owns any of
the Securities
and for
at least twenty
(20) Trading Days
thereafter, Company
shall file
all reports
required to be filed with the
SEC pursuant to Sections 13 or
15(d) of the 1934 Act, and
shall take all
reasonable action
under its
control to ensure
that adequate
current public
information with respect
to Company, as required in accordance
with Rule 144 of the 1933 Act,
is publicly available, and shall
not terminate its
status as an issuer required
to file reports under
the 1934 Act even
if the 1934 Act or the
rules and regulations thereunder
would permit such termination;
(ii) the Common Stock shall be listed
or quoted for
trading on any of (a)
NYSE, (b) NASDAQ, (c) OTCQX, (d)
OTCQB, or (e) OTC
Pink Current Information; (iii)
when issued, the Origination
Shares and the Conversion Shares
will be duly
authorized, validly issued,
fully paid for and non-assessable, free
and clear of all
liens, claims, charges and
encumbrances; (iv) Company
shall use the
net proceeds
received hereunder
for working
capital and
general corporate purposes
only and shall not pay such proceeds
to any other party
pursuant to any financing
transaction effected prior
to the date hereof; (v)
trading in Company’s Common
Stock shall not
be suspended,
halted, chilled,
frozen, reach
zero bid
or otherwise
cease on
the Company’s
principal trading market; (vi)
from and after the date
hereof and until all
of Company’s obligations
hereunder and the Note
are paid and performed in full,
Company shall not transfer, assign,
sell, pledge, hypothecate or
otherwise alienate or encumber
the Investor Notes in
any way without the prior
written consent of Investor;
and (vii) at all
times during
which the
Note remains
outstanding, Company shall
not have
at any given
time more than five
(5) Variable Security Holders
(as defined below), excluding
Investor, without
Investor’s prior written
consent. For purposes hereof,
the term “Variable Security Holder” means
any holder of any Company
securities that are convertible
into Common Stock (including
without limitation convertible
debt, warrants or convertible
preferred stock) with a conversion
price that varies with
the market price of
the Common Stock.

 

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

 

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

 

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

 

6.                 
Conditions
to Investor’s
Obligation to Purchase.
The obligation
of Investor
hereunder to
purchase the
Securities at
the Closing
is subject
to the
satisfaction, at
or before
the Closing
Date, of
each of the
following conditions, provided
that these conditions are
for Investor’s sole
benefit and may be waived
by Investor at any
time in its sole discretion:

 

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

 

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

 

6.3.           
Company shall
have delivered
to Investor
a certificate
representing the
Origination Shares.

 

6.4.           
Company
shall have
delivered to Investor
a fully
executed Irrevocable
Letter of Instructions
to Transfer
Agent substantially
in the form
attached hereto
as Exhibit
E acknowledged
in writing
by Company’s transfer
agent (the “Transfer
Agent”).

    	4

    	 

    

 

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

 

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

 

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

 

7.                 
Reservation
of
Shares.
At all
times during
which the Note
is convertible,
Company will
reserve from
its authorized
and unissued
Common Stock
to provide
for the
issuance of
Common Stock upon
the full
conversion of the
Note at least
three (3) times
the quotient
obtained by dividing
the Outstanding Balance (as defined
in the Note) by
the Installment Conversion Price
(as defined in the Note) (the “Share
Reserve”), but in any event not less
than 400,000 shares of Common
Stock shall be reserved
at all times for such
purpose (the “Transfer Agent
Reserve”). Company
further agrees that
it will cause the Transfer
Agent to immediately
add shares
of Common Stock to
the Transfer
Agent Reserve
in increments of
100,000 shares
as and when
requested by Investor
in writing
from time
to time,
provided that such
incremental increases do not
cause the Transfer Agent Reserve
to exceed the Share Reserve.
In furtherance thereof,
from and after the date
hereof and until such time that
the Note has
been paid in full,
Company shall require the
Transfer Agent to reserve
for the purpose of issuance
of Conversion Shares under the
Note, a number of shares of Common
Stock equal to the Transfer
Agent Reserve. Company shall
further require the
Transfer Agent to hold such shares
of Common Stock exclusively for
the benefit of Investor and to issue
such shares to Investor promptly
upon Investor’s delivery
of a conversion notice under the
Note. Finally, Company shall require
the Transfer Agent to issue
shares of Common Stock pursuant
to the Note to Investor out
of its authorized and unissued
shares, and not the Transfer Agent
Reserve, to the extent shares
of Common Stock have been
authorized, but not issued,
and are not included in the Transfer
Agent Reserve. The Transfer Agent
shall only issue shares out
of the Transfer Agent
Reserve to the extent there
are no other authorized shares
available for issuance and then
only with Investor’s
written consent.

 

8.                 
Miscellaneous. The provisions set
forth in this
Section 8
shall apply
to this Agreement, as
well as all
other Transaction Documents as if
these terms were fully
set forth
therein.

 

8.1.           
Original
Signature
Pages.
Each party
agrees to deliver
its original
signature pages
to the Transaction
Documents to the other
party within five
(5) Trading Days
of the
date hereof.
Notwithstanding the foregoing,
the Transaction
Documents shall
be fully
effective upon
exchange of electronic
signature pages by the parties
and payment of the Initial
Cash Purchase Price by Investor.
For the avoidance of doubt,
the failure by either party
to deliver its original
signature pages to the other
party shall not affect
in any way the validity
or effectiveness of any of the Transaction
Documents, provided that
such failure
to deliver original
signatures shall
be a breach of
the party’s
obligations hereunder.

 

		8.2.	Arbitration
                                         of
                                         Claims.
                                         The parties
                                         shall submit
                                         all Claims
                                         (as defined
                                         in Exhibit

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

    	5

    	 

    

 

representations.
Company acknowledges
and agrees
that Investor
may rely
upon the foregoing
representations and covenants
of Company
regarding the
Arbitration Provisions.

 

8.3.           
Governing
Law;
Venue.
This Agreement
shall be
governed by
and interpreted
in accordance
with the
laws of the
State of Utah
for contracts
to be
wholly performed
in such
state and
without giving
effect to the
principles thereof
regarding the conflict
of laws.
Each party
consents to and expressly
agrees that exclusive venue
for arbitration of any dispute
arising out of or relating to any Transaction
Document or the relationship
of the parties or their
affiliates shall be in Salt
Lake County, Utah or Utah
County, Utah, Utah;
provided, however,
that notwithstanding anything
herein to the contrary, enforcement
of Investor’s rights under
the Security Agreement will
occur in accordance with the
Uniform Commercial Code
of the applicable state(s) under
the Security Agreement
and enforcement of Company’s
rights over
the Collateral will
occur in accordance
with the laws of
the state in which
the Collateral
is located.
Without modifying
the parties
obligations to
resolve disputes
hereunder pursuant
to the Arbitration
Provisions, for
any litigation
arising in
connection with
any of the
Transaction Documents, each party
hereto hereby (i) consents
to and expressly submits to the
exclusive personal jurisdiction of any
state or federal court sitting
in Salt Lake County,
Utah, (ii) expressly submits
to the exclusive venue
of any such
court for the purposes
hereof, and (iii)
waives any claim
of improper venue and any
claim or objection
that such courts
are an inconvenient
forum or any
other claim
or objection to the
bringing of
any such proceeding
in such jurisdictions
or to
any claim that
such venue
of the
suit, action or
proceeding is improper.

 

8.4.           
Calculation Disputes. Notwithstanding
the Arbitration
Provisions, in the
case of a dispute
as to
any determination
or arithmetic
calculation under
the Transaction
Documents, including
without limitation,
calculating the
Outstanding Balance,
Lender Conversion
Price (as
defined in
the Note),
Lender Conversion Shares (as
defined in the Note), Installment
Conversion Price, Installment
Conversion Shares (as defined
in the Note), Conversion Factor
(as defined in the Note),
Market Price (as
defined in the
Note), or
VWAP (as defined
in the Note) (each, a “Calculation”),
Company or Investor (as
the case may
be) shall submit any disputed
Calculation via
email or facsimile
with confirmation
of receipt

(i)
within two
(2) Trading
Days after
receipt of the
applicable notice
giving rise
to such
dispute to
Company or Investor
(as the
case may
be) or (ii)
if no
notice gave
rise to such
dispute, at
any time
after Investor
learned of the
circumstances giving
rise to
such dispute.
If Investor
and Company
are unable
to agree
upon such Calculation
within two (2) Trading Days
of such disputed
Calculation being submitted to
Company or Investor (as
the case may
be), then Investor shall,
within two (2)
Trading Days,
submit via
email or facsimile the disputed
Calculation to Unkar Systems
Inc. (“Unkar Systems”).
Company shall cause Unkar
Systems to perform the
Calculation and notify
Company and Investor of the
results no later than ten
(10) Trading Days from the time
it receives such disputed
Calculation. Unkar Systems’
determination of the disputed Calculation
shall be binding upon all
parties absent demonstrable error.
Unkar Systems’ fee for performing
such Calculation
shall be paid
by the incorrect
party, or if both parties
are incorrect, by the party whose
Calculation is furthest from
the correct Calculation as determined
by Unkar Systems.
In the
event Company
is the losing
party, no extension
of the Delivery
Date (as
defined in the Note)
shall be granted and Company
shall incur all effects for
failing to deliver the
applicable shares in a timely
manner as set forth in
the Transaction Documents. Notwithstanding
the foregoing, Investor may,
in its sole discretion,
designate an independent, reputable
investment bank or accounting
firm other than Unkar Systems
to resolve any such dispute
and in such event, all references
to “Unkar Systems”
herein will
be replaced with
references to such independent,
reputable investment
bank or accounting firm so designated
by Investor.

 

8.5.           
Counterparts.
Each
Transaction
Document
may
be executed
in any number
of counterparts,
each of
which shall
be deemed
an original,
but all
of which
together shall
constitute one
instrument. The
parties hereto
confirm that any electronic
copy of another party’s
executed counterpart
of a Transaction
Document (or such party’s
signature page thereof)
will be deemed to be an executed
original thereof.

    	6

    	 

    

 

8.6.           
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.

 

8.7.           
Severability.
In
the event
that any provision
of this
Agreement is
invalid or
unenforceable under
any applicable statute
or rule of
law, then such provision shall
be deemed inoperative
to the
extent that
it may
conflict therewith
and shall
be deemed
modified to
conform to
such statute
or rule of law. Any provision
hereof which may prove
invalid or unenforceable under any law shall
not affect the
validity or enforceability
of any other
provision hereof.

 

8.8.           
Entire
Agreement.
This Agreement,
together with
the other
Transaction Documents,
contains the entire
understanding of the parties
with respect
to the matters
covered herein
and therein
and, except
as specifically
set forth
herein or therein,
neither Company
nor Investor
makes any
representation, warranty, covenant
or undertaking
with respect
to such matters.

 

8.9.           
No
Reliance.
Company acknowledges
and agrees
that neither
Investor nor
any of its
officers, directors,
stockholders, members,
managers, representatives
or agents
has made
any representations
or warranties
to Company or
any of its
officers, directors,
representatives, agents or
employees except
as expressly set forth
in the
Transaction Documents and, in
making its decision
to enter into the
transactions contemplated
by the Transaction
Documents, Company
is not
relying on
any representation, warranty,
covenant or promise of Investor or its
officers, directors, members,
managers, agents or
representatives other than
as set forth
in the Transaction
Documents.

 

8.10.       
Amendments. No
provision of this
Agreement may
be waived
or amended
other than by
an instrument
in writing signed
by the parties hereto.

 

8.11.       
Notices.
Any
notice
required
or permitted
hereunder shall
be given
in writing
(unless otherwise
specified herein)
and shall
be deemed
effectively given
on the earliest
of: (i)
the date
delivered, if
delivered by personal
delivery as against
written receipt therefor
or by
email to
an executive officer, or by facsimile
(with successful transmission
confirmation), (ii) the
earlier of the date delivered
or the third
Trading Day after deposit,
postage prepaid, in the United
States Postal Service by certified
mail, or (iii) the earlier
of the date
delivered or the third
Trading Day after mailing by
express courier, with delivery
costs and fees prepaid,
in each
case, addressed
to each
of the
other parties
thereunto entitled
at the following addresses (or at such other
addresses as such party may designate by
five (5) calendar days’
advance written notice
similarly given to each
of the other parties
hereto):

 

If
to Company:

 

Avalanche
International, Corp.
Attn: Philip
E. Mansour

5940
South Rainbow Blvd.
Las Vegas, Nevada
89118

 

If
to Investor:

 

Typenex
Co-Investment, LLC
Attn: John
Fife

303
East Wacker Drive,
Suite 1040

Chicago,
Illinois 60601

    	7

    	 

    

 

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

 

Hansen
Black Anderson
Ashcraft PLLC
Attn: Jonathan
K. Hansen

3051
West Maple
Loop Drive, Suite 325
Lehi, Utah 84043

 

8.12.       
Successors
and Assigns.
This Agreement
or any of
the severable
rights and
obligations inuring
to the
benefit of
or to
be performed
by Investor
hereunder may
be assigned
by Investor
to a
third party,
including its
financing sources,
in whole
or in
part, without
the need
to obtain
Company’s consent thereto.
Company may not
assign its
rights or
obligations under
this Agreement or delegate
its duties hereunder without
the prior written consent
of Investor.

 

8.13.       
Survival.
The representations
and warranties
of Company
and the agreements
and covenants
set forth
in this
Agreement shall
survive the
Closing hereunder
notwithstanding any due
diligence investigation
conducted by or
on behalf of Investor.
Company agrees
to indemnify
and hold harmless
Investor and
all its
officers, directors,
employees, attorneys,
and agents
for loss or
damage arising as a result of
or related to any breach
or alleged breach by Company
of any of its representations, warranties
and covenants
set forth
in this
Agreement or
any of its
covenants and
obligations under
this Agreement, including
advancement of expenses
as they are incurred.

 

8.14.       
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.

 

8.15.       
Investor’s
Rights
and Remedies
Cumulative; Liquidated
Damages.
All rights,
remedies, and powers
conferred in this Agreement
and the Transaction Documents
are cumulative and not
exclusive of
any other rights
or remedies,
and shall
be in addition
to every
other right,
power, and
remedy that
Investor may
have, whether
specifically granted
in this Agreement
or any other Transaction Document,
or existing at law,
in equity, or by statute,
and any and all such rights
and remedies may be exercised
from time to time
and as often
and in such
order as Investor
may deem expedient.
The parties
acknowledge and agree that
upon Company’s failure
to comply with the provisions
of the Transaction
Documents, Investor’s damages
would be uncertain and difficult
(if not impossible)
to accurately estimate
because of the parties’
inability to predict future
interest rates and future
share prices, Investor’s
increased risk, and the uncertainty
of the availability of a suitable
substitute investment opportunity
for Investor, among
other reasons. Accordingly, any
fees, charges, and default interest
due under the Note and the
other Transaction Documents
are intended
by the parties to be,
and shall be deemed,
liquidated damages (under
Company’s and Investor’s expectations
that any such liquidated damages
will tack back to the Closing
Date for purposes of determining
the holding period under
Rule 144 under the 1933
Act). The parties agree that
such liquidated damages
are a reasonable estimate of Investor’s
actual damages and not a penalty,
and shall not be
deemed in any way
to limit any other right
or remedy Investor
may have hereunder,
at law or
in equity. The
parties acknowledge
and agree that
under the circumstances existing
at the time
this Agreement is entered
into, such liquidated damages
are fair and reasonable and
are not penalties. All fees,
charges, and default interest
provided for in the Transaction
Documents are agreed to by the
parties to be based
upon the
obligations and the risks
assumed by
the parties
as of
the Closing
Date and are consistent with investments
of this type. The
liquidated damages provisions
of the Transaction Documents
shall not limit or preclude a
party from pursuing
any other remedy available at
law or in equity; provided,
however, that the
liquidated damages provided for
in the Transaction Documents
are intended to be
in lieu of
actual damages.

    	8

    	 

    

 

8.16.       
Ownership
Limitation.
Notwithstanding anything
to the contrary
contained in this
Agreement or the
other Transaction
Documents, if at
any time
Investor shall
or would
be issued
shares of
Common Stock under
any of
the Transaction
Documents, but
such issuance
would cause 
Investor (together
with its
affiliates) to
beneficially own
a number of
shares exceeding
the Maximum Percentage
(as defined
in the
Note), then
Company must not
issue to
Investor the
shares that
would cause
Investor to
exceed the Maximum
Percentage. The shares
of Common
Stock issuable to
Investor that
would cause
the Maximum Percentage to
be exceeded are referred to herein
as the “Ownership
Limitation Shares”.
Company will reserve
the Ownership
Limitation Shares
for the exclusive
benefit of Investor.
From time to
time, Investor
may notify Company
in writing of the
number of the Ownership
Limitation Shares that
may be issued to Investor
without causing
Investor to exceed
the Maximum Percentage.
Upon receipt of
such notice,
Company shall
be unconditionally
obligated to
immediately issue
such designated
shares to Investor,
with a corresponding
reduction in
the number
of the Ownership
Limitation Shares.
For purposes
of this Section, beneficial
ownership of Common Stock will
be determined under Section
13(d) of the 1934 Act.

 

8.17.       
Attorneys’
Fees
and Cost
of Collection.
In the
event of
any arbitration
or action at
law or
in equity
to enforce
or interpret
the terms
of this
Agreement or
any of the
other Transaction
Documents, the parties agree
that the party
who is awarded the
most money
shall be deemed the
prevailing party
for all
purposes and
shall therefore be
entitled to an
additional award of the
full amount
of the
attorneys’ fees,
deposition costs,
and expenses
paid by such
prevailing party in
connection with
arbitration or
litigation without
reduction or apportionment
based upon the
individual claims
or defenses giving
rise to the
fees and
expenses. Nothing
herein shall
restrict or
impair an
arbitrator’s or
a court’s power
to award fees and expenses
for frivolous or bad
faith pleading. If
(i) the Note is placed in the
hands of an attorney for collection
or enforcement prior
to commencing arbitration or
legal proceedings,
or is collected
or enforced
through any
arbitration or
legal proceeding,
or Investor
otherwise takes
action to collect amounts
due under the Note or
to enforce the provisions
of the Note;
or (ii) there occurs any bankruptcy,
reorganization, receivership of
Company or other
proceedings affecting Company’s
creditors’ rights and involving
a claim under the Note; then Company
shall pay the costs incurred
by Investor for such collection,
enforcement or action or in
connection with such bankruptcy,
reorganization, receivership or
other proceeding,
including, without
limitation, attorneys’
fees, expenses, deposition
costs, and disbursements.

 

8.18.       
Waiver.
No
waiver
of any provision
of this
Agreement shall
be effective unless
it is in
the form of
a writing
signed by
the party
granting the
waiver. No
waiver of any
provision or consent
to any prohibited
action shall
constitute a waiver
of any other provision
or consent to any other
prohibited action,
whether or
not similar.
No waiver
or consent
shall constitute
a continuing
waiver or
consent or
commit a
party to provide a
waiver or consent
in the future except
to the extent specifically set
forth in writing.

 

8.19.       
Waiver of Jury
Trial. EACH PARTY
TO THIS
AGREEMENT IRREVOCABLY
WAIVES ANY
AND ALL RIGHTS
SUCH PARTY MAY
HAVE TO DEMAND
THAT ANY
ACTION, PROCEEDING
OR COUNTERCLAIM
ARISING OUT
OF OR IN
ANY WAY RELATED
TO THIS
AGREEMENT OR THE RELATIONSHIPS
OF THE PARTIES HERETO BE
TRIED BY
JURY. THIS WAIVER EXTENDS
TO ANY
AND ALL RIGHTS TO
DEMAND A TRIAL
BY JURY ARISING UNDER COMMON
LAW OR ANY APPLICABLE STATUTE, LAW,
RULE OR REGULATION. FURTHER, EACH PARTY
HERETO ACKNOWLEDGES THAT SUCH PARTY IS
KNOWINGLY AND
VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY.

 

8.20.       
Time of
the Essence. Time
is expressly
made of
the essence
with respect
to each
and every provision
of this
Agreement and the
other Transaction Documents.

 

 

[Remainder
of
page
intentionally
left blank;
signature page follows]

    	9

    	 

    

 

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

 

SUBSCRIPTION
AMOUNT:

 

Principal
Amount of
Note:$252,500.00

 

Initial
Cash Purchase Price:$75,000.00

 

 

INVESTOR:

 

TYPENEX
CO-INVESTMENT, LLC

 

By:
Red
Cliffs Investments, Inc., its Manager

 

/s/ John
M. Fife

John
M. Fife, President

 

COMPANY:

 

AVALANCHE
INTERNATIONAL, CORP.

 

 

By:
 /s/ Philip Mansour

Printed
Name: Phil Mansour

Title:
 Ceo

 

ATTACHED
EXHIBITS:

 

Exhibit
ANote

Exhibit
BAllocation of
Purchase Price

Exhibit
CForm of Investor
Note 

Exhibit
DSecurity
Agreement

Exhibit
EIrrevocable
Transfer Agent
Instructions

Exhibit
FSecretary’s
Certificate

Exhibit
GShare Issuance
Resolution Exhibit HArbitration
Provisions

    	10

    	 

    

 

EXHIBIT
H

 

ARBITRATION
PROVISIONS

 

1.       
Dispute Resolution.
For purposes
of this
Exhibit H,
the term
“Claims” means
any disputes, claims,
demands, causes
of action,
liabilities, damages,
losses, or controversies
whatsoever arising
from related
to or
connected with
the transactions contemplated
in the Transaction
Documents and
any communications
between the parties
related thereto, including
without limitation
any claims
of mutual mistake,
mistake, fraud, misrepresentation,
failure of formation, failure
of consideration, promissory estoppel,
unconscionability, failure of condition precedent,
rescission, and any statutory
claims, tort claims, contract
claims, or claims to
void, invalidate or terminate
the Agreement or any
of the other Transaction
Documents. The term
“Claims” specifically excludes
a dispute over Calculations and
enforcement of Investor’s
rights and remedies against
the personal property
described in
the Security
Agreement under
the applicable
provisions of the Uniform Commercial
Code. The parties hereby agree
that the arbitration provisions
set forth in this
Exhibit H (“Arbitration Provisions”) are binding
on the parties hereto
and are severable from all other provisions
in the Transaction Documents.
As a result, any attempt to
rescind the Agreement or declare
the Agreement or any
other Transaction Document invalid or unenforceable
for any reason is subject
to these Arbitration Provisions.
These Arbitration Provisions shall also survive
any termination or expiration
of the Agreement.
Any capitalized
term not
defined in these
Arbitration Provisions shall
have the meaning
set forth in the Agreement.

2.       
Arbitration. Except
as otherwise
provided herein,
all Claims
must be
submitted to
arbitration (“Arbitration”)
to be
conducted exclusively in
Salt Lake County,
Utah or
Utah County, Utah
and pursuant to
the terms
set forth
in these
Arbitration Provisions.
The parties
agree that
the award of
the arbitrator
(the “Arbitration Award”) shall
be final
and binding upon the
parties (subject to the
appear right set
forth in Section 4 below); shall
be the sole and exclusive
remedy between them regarding
any Claims, counterclaims, issues,
or accountings presented or pleaded
to the arbitrator; and shall promptly
be payable in United States
dollars free of any
tax, deduction or
offset (with respect
to monetary awards). Any costs
or fees, including without
limitation attorneys’ fees,
incident to enforcing
the arbitrator’s award shall,
to the
maximum extent permitted
by law, be charged
against the party
resisting such enforcement. The award
shall include Default Interest (as defined
in the Note) both before
and after the award. Judgment
upon the award of the arbitrator will
be entered and enforced by
a state court sitting in Salt
Lake County, Utah. The parties hereby
incorporate herein the provisions and
procedures set forth in the Utah Uniform Arbitration
Act, U.C.A. § 78B-11-101 et seq.
(as amended
or superseded from
time to time,
the “Arbitration
Act”). Pursuant to
Section 105 of
the Arbitration Act, in the
event of conflict between the terms of these Arbitration
Provisions and the provisions of the Arbitration
Act, the terms of these Arbitration
Provisions shall control.

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

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

3.2          
Within ten (10)
calendar days
after the
Service Date,
Investor shall
select and
submit to
Company the names
of three
(3) arbitrators
that are designated
as “neutrals” or
qualified arbitrators
by Utah
ADR Services
(http://www.utahadrservices.com) (such three
(3) designated persons hereunder
are referred to herein
as the “Proposed Arbitrators”).
For the avoidance of doubt, each Proposed Arbitrator must be qualified
as a “neutral” with Utah
ADR Services. Within ten
(10) calendar days after Investor
has submitted to Company
the names of the Proposed
Arbitrators, Company must select,
by written notice to
Investor, one (1) of the
Proposed Arbitrators to
act as the
arbitrator for the
parties under
these Arbitration Provisions.
If Company fails to
select one of the Proposed Arbitrators
in writing within such 10-day
period, then Investor
may select the
arbitrator from the Proposed
Arbitrators by providing written
notice of such selection
to

    	11

    	 

    

 

Company.
If Investor
fails to
identify the Proposed
Arbitrators within the
time period
required above,
then Company
may at any
time prior to
Investor designating
the Proposed
Arbitrators, select
the names
of three

(3)
arbitrators that
are designated as
“neutrals” or qualified
arbitrators by
Utah ADR Service
by written
notice to
Investor. Investor
may then,
within ten
(10) calendar
days after Company
has submitted
notice of
its selected
arbitrators to
Investor, select, by
written notice
to Company, one
(1) of
the selected
arbitrators to
act as the
arbitrator for the
parties under these Arbitration
Provisions. If
Investor fails to
select in
writing and within such 10-day
period one of
the three (3) arbitrators selected
by Company, then
Company may select the arbitrator
from its three (3) previously selected
arbitrators by providing written
notice of such selection to Investor.
Subject to Paragraph 3.12 below,
the cost of the arbitrator must
be paid equally by
both parties; provided,
however, that if one
party refuses
or fails
to pay its portion
of the
arbitrator fee, then the other
party can advance such unpaid amount
(subject to the accrual of Default
Interest thereupon), with such amount
added to or subtracted from,
as applicable, the award
granted by the arbitrator. If
Utah ADR Services ceases to
exist or to provide
a list of neutrals, then
the arbitrator shall be selected
under the then prevailing rules
of the American Arbitration
Association. The date that the
selected arbitrator agrees
in writing to serve as the
arbitrator hereunder is referred
to herein as the “Arbitration Commencement Date”.

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

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

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

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

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

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

b.             
No party
shall be
allowed (i)
more than
fifteen (15) interrogatories
(including discrete
subparts), (ii) more
than fifteen (15) requests
for admission (including
discrete subparts),
(iii) more than ten

(10)
document requests
(including discrete
subparts), or
(iv) more than
three depositions (excluding
expert depositions)
for a maximum
of seven
(7) hours per
deposition.

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

    	12

    	 

    

 

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

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

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

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

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

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

    	13

    	 

    

 

decision
prior to
the end of
such 150-day period.
The Utah Rules
of Evidence will
apply to
any final
hearing before
the arbitrator.

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

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

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

		4.	Appeals.

4.1          
Following the
entry of
the Arbitration Award,
either party (the
“Appellant”) shall
have a period of
thirty (30)
days in which
to notify
the other party
(the “Appellee”), in
writing, that it
elects to
appeal (the “Appeal”)
the Arbitration Award
(such notice,
an “Appeal Notice”).
The date the
Appellant delivers
an Appeal Notice
to the Appellee is referred
to herein as
the “Appeal Date”.
The Appeal Notice
must be delivered
to the Appellee in accordance
with the provisions of Paragraph
3.1 above with respect to delivery of
an Arbitration Notice and
must describe the
nature of the
appeal and the
remedies sought. In addition,
together with its delivery of an Appeal
Notice to the Appellee, the
Appellant must also pay for (and
provide proof of such payment
to the Appellee together
with its delivery of the Appeal Notice) a bond
in the amount of 110% of the
sum it owes to the
Appellee as a result of the
final decision made by the arbitrators
that it is appealing.
In the event
neither party
delivers an Appeal Notice to
the other within the
deadline prescribed
in this Paragraph 4.1, each
party shall lose its right to appeal
and the decision of the arbitrator
shall be final.

4.2          
In the
event an
Appellant delivers
an Appeal
Notice to
the Appellee
in compliance with
the provisions
of Paragraph
4.1 above,
the following
provisions shall apply
with respect
to the
Appeal:

(a)           
The Appeal will be
heard by
a three (3) person
arbitration panel (the “Appeal
Panel”). Within ten
(10) calendar
days after
the Appeal
Date, the
Appellee shall select
and submit to
the Appellant
the names
of five (5)
arbitrators that are
designated as “neutrals”
or qualified
arbitrators by
Utah ADR Services
(http://www.utahadrservices.com) (such
five designated
persons hereunder
are referred
to herein
as the “Proposed
Appeal Arbitrators”). For the avoidance of doubt,
each Proposed Appeal Arbitrator must be qualified
as a “neutral”
with Utah ADR
Services. Within ten
(10) calendar days
after the
Appellee has submitted to
the Appellant the names
of the Proposed Appeal Arbitrators,
the Appellant must select, by
written notice to the Appellee,
three (3) of the Proposed Appeal Arbitrators
to act as the members
of the Appeal Panel. If
the Appellant fails to select
three (3) of the Proposed Appeal
Arbitrators in writing within
such 10-day period, then the
Appellee may select such three
(3) arbitrators from the Proposed
Appeal Arbitrators by
providing written notice of
such selection
to the
Appellant. If the Appellee
fails to
identify the Proposed Appeal
Arbitrators within the time period
required above, then the Appellant
may at any time prior to the
Appellee designating the Proposed
Appeal Arbitrators, select
the names of the five (5) Proposed
Appeal Arbitrators.
The Appellee may then, within
ten (10) calendar days after
the Appellant has submitted
notice of its Proposed Appeal
Arbitrators to the Appellee,
select, by written notice to
the Appellant, three (3) of the
Proposed Appeal
Arbitrators to
serve on the
Appeal Panel.
If the
Appellee fails to
select in writing
and within such
10-day period
the three (3) members
of the Appeal Panel,
then the Appellant
may select
such three (3) members
of the Appeal Panel by providing written
notice of such selection to the Appellee.
After the three (3) members
of the Appeal
Panel are
selected, the
Appellee shall designate
in writing to the
Appellant the name of one of
such three (3) arbitrators
to serve as the lead arbitrator.
Subject to Paragraph 4.2(d) below,
the cost of the Appeal Panel must
be paid entirely by
the Appellant. If Utah ADR
Services ceases to exist
or to provide a list of
neutrals, then
the arbitrators shall
be selected
under the then
prevailing rules
of the American
Arbitration Association. The date
that all three (3) selected
arbitrators agree in writing
to serve as the arbitrators
hereunder is referred to herein
as the “Appeal Commencement Date”.

(b)         
Within seven (7)
days of the
Appeal Commencement Date,
Appellant shall
deliver to
the Appeal
Panel and
to Appellee
a memorandum
in support
of appeal
describing in
detail its
basis and
arguments for
appealing the Arbitration Award (the “Memorandum in
Support”). Within seven
(7) days of Appellant’s delivery of the Memorandum in Support,
Appellee shall deliver to the
Appeal Panel and
to Appellant a

    	14

    	 

    

 

memorandum
in opposition to
the Memorandum in
Support (the “Memorandum
in Opposition”).
Within seven
(7) days of Appellee’s
delivery of
the Memorandum in Opposition,
Appellant shall deliver
to the
Appeal Panel
and to
Appellee a
reply memorandum to
the Memorandum
in Opposition.

(c)           
The parties
hereby agree
that the Appeal must
be heard
by the Appeal Panel
within thirty (30)
calendar days
of the Appeal
Commencement Date
and that the
Appeal Panel’s
Arbitration Award must
be made within
thirty (30)
days after
the Appeal
is heard, and
in any
event within
sixty (60) days
of the
Appeal Commencement Date.
The Utah Rules of Evidence will
apply to any final hearing
before the Appeal Panel.

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

 

[Remainder
of
page
intentionally
left blank]

    	15SECURITY
AGREEMENT

 

THIS
SECURITY AGREEMENT
(this “Agreement”),
dated as of
May 29,
2015, is executed
by Avalanche
International, Corp.,
a Nevada
corporation (“Debtor”),
in favor
of Typenex
Co-Investment, LLC,
a Utah limited liability
company (“Secured Party”).

 

A.                
Debtor has
issued to
Secured Party
a certain
Secured Convertible
Promissory Note
of even
date herewith,
as may
be amended
from time
to time,
in the original
face amount
of $252,500.00 (the
“Note”).

 

B.                
In
order to
induce Secured
Party to extend
the credit
evidenced by
the Note,
Debtor has
agreed to
enter into
this Agreement
and to grant
Secured Party
a security
interest in
the Collateral
(as defined below).

 

NOW,
THEREFORE, in
consideration of
the above
recitals and
for other
good and
valuable consideration,
the receipt
and adequacy
of which
are hereby
acknowledged, Debtor
hereby agrees
with Secured
Party as follows:

 

1.                 
Definitions and
Interpretation.
When used
in this
Agreement, the
following terms
have the
following respective
meanings:

 

“Collateral”
has the
meaning given to that
term in Section 2 hereof.

 

“Lien”
shall mean,
with respect
to any
property, any security
interest, mortgage, pledge,
lien, claim,
charge or other
encumbrance in,
of, or
on such property
or the income
therefrom, including,
without limitation,
the interest
of a vendor
or lessor
under a conditional
sale agreement,
capital lease
or other
title retention
agreement, or
any agreement to
provide any of the
foregoing, and
the filing of
any financing statement
or similar
instrument under the
UCC or comparable
law of any jurisdiction.

 

“Obligations”
means (a)
all loans,
advances, future
advances, debts,
liabilities and
obligations, howsoever
arising, owed
by Debtor
to Secured
Party or
any affiliate
of Secured
Party of
every kind
and description,
now existing
or hereafter
arising, whether
created by the
Note, this Agreement,
that certain Securities Purchase
Agreement of even date herewith,
entered into by and between Debtor
and Secured
Party (the
“Purchase Agreement”),
any other Transaction
Documents (as defined
in the Purchase Agreement),
any modification or amendment
to any of the foregoing, guaranty
of payment or other contract
or by a quasi-contract, tort,
statute or other operation
of law, whether incurred or owed
directly to Secured
Party or as an affiliate
of Secured Party
or acquired by
Secured Party
or an affiliate of
Secured Party
by purchase,
pledge or otherwise, (b)
all costs and expenses,
including attorneys’ fees,
incurred by Secured Party or
any affiliate of Secured Party
in connection with the Note
or in connection
with the collection
or enforcement of
any portion of the
indebtedness, liabilities or obligations
described in the foregoing
clause (a),
(c) the
payment of
all other
sums, with
interest thereon,
advanced in accordance herewith to
protect the security of this
Agreement, and (d) the
performance of the covenants
and agreements
of Debtor contained
in this Agreement
and all other
Transaction Documents.

 

“Permitted
Liens” means
(a) Liens
for taxes
not yet
delinquent or Liens
for taxes
being contested
in good
faith and
by appropriate
proceedings for
which adequate
reserves have
been established,
and (b)
Liens in
favor of
Secured Party
under this
Agreement or
arising under the
other Transaction
Documents.

    	1

    	 

    

 

“UCC”
means the
Uniform Commercial
Code as
in effect
in the state
whose laws
would govern
the security
interest in,
including without
limitation the perfection
thereof, and foreclosure
of the
applicable Collateral.

 

Unless
otherwise defined
herein, all
terms defined
in the
UCC have
the respective
meanings given
to those terms in the
UCC.

 

2.                 
Grant of
Security Interest.
As security
for the Obligations,
Debtor hereby
pledges to
Secured Party
and grants
to Secured
Party a
security interest
in all
right, title,
interest, claims
and demands
of Debtor in
and to
the property described
in Schedule
A hereto,
and all replacements,
proceeds, products, and accessions
thereof (collectively, the “Collateral”).

 

3.                 
Authorization to
File Financing
Statements.
Debtor hereby
irrevocably authorizes
Secured Party
at any time
and from time
to time
to file in
any filing
office in
any Uniform
Commercial Code
jurisdiction or
other jurisdiction
of Debtor
or its subsidiaries
(including without
limitation Nevada)
any financing
statements or
documents having
a similar
effect and
amendments thereto
that provide
any other information required
by the Uniform Commercial Code
(or similar law of any non-United States
jurisdiction, if applicable) of such state
or jurisdiction for the sufficiency
or filing office acceptance of
any financing
statement or amendment,
including whether
Debtor is an
organization, the type
of organization and any organization
identification number issued
to Debtor. Debtor agrees to
furnish any such information to Secured
Party promptly upon Secured Party’s
request.

 

4.                 
General Representations and
Warranties. Debtor represents
and warrants to Secured
Party that (a)
Debtor is
the owner of
the Collateral and
that no
other person has
any right,
title, claim
or interest
(by way of Lien
or otherwise) in, against
or to
the Collateral,
other than
Permitted Liens, and (b) upon
the filing
of UCC-1
financing statements
with the Nevada
Secretary of State,
Secured Party
shall have
a perfected first-position
security interest in the Collateral
to the extent that
a security interest in the
Collateral can be perfected
by such filing, except
for Permitted Liens.

 

		5.	Additional
                                         Covenants. Debtor
                                         hereby agrees:

 

5.1.           
to perform
all acts
that may
be necessary
to maintain,
preserve, protect
and perfect
in the Collateral,
the Lien
granted to
Secured Party therein,
and the
perfection and
priority of such
Lien, except for Permitted
Liens;

 

5.2.           
to procure,
execute (including
endorse, as applicable),
and deliver from
time to
time any
endorsements, assignments,
financing statements,
certificates of
title, and
all other
instruments, documents
and/or writings
reasonably deemed
necessary or appropriate
by Secured Party
to perfect,
maintain and protect Secured
Party’s Lien hereunder
and the priority
thereof;

 

5.3.           
to provide at
least fifteen
(15) days prior written
notice to Secured Party
of any of the
following events:
(a) any
changes or
alterations of
Debtor’s name,
(b) any
changes with
respect to
Debtor’s address
or principal
place of business,
or (c) the formation
of any subsidiaries
of Debtor;

 

5.4.           
upon the occurrence
of an
Event of
Default (as
defined in the
Note) under
the Note
and, thereafter,
at Secured
Party’s request,
to endorse
(up to the
outstanding amount
under such
promissory notes
at the time
of Secured Party’s request),
assign and deliver
any promissory notes
included in the Collateral to
Secured Party, accompanied by
such instruments of transfer
or assignment duly executed
in blank as Secured
Party may from time to time specify;

    	2

    	 

    

 

5.5.           
to the
extent the
Collateral is not
delivered to Secured
Party pursuant
to this
Agreement, to
keep the
Collateral at
the principal
office of
Debtor (unless otherwise
agreed to by Secured
Party in writing),
and not to relocate the
Collateral to any other
locations without
the prior
written consent
of Secured Party;

 

5.6.           
not to sell
or otherwise
dispose, or
offer to
sell or
otherwise dispose,
of the
Collateral or
any interest therein (other
than inventory
in the ordinary
course of business);
and

 

5.7.           
not to, directly
or indirectly,
allow, grant
or suffer
to exist
any Lien
upon any
of the Collateral, other
than Permitted Liens.

 

6.                 
Authorized Action
by Secured Party.
Debtor hereby
irrevocably appoints
Secured Party as
its attorney-in-fact
(which appointment
is coupled
with an
interest) and agrees
that Secured
Party may
perform (but
Secured Party
shall not be
obligated to
and shall
incur no
liability to
Debtor or
any third party for failure so
to do) any act which Debtor
is obligated by this Agreement
to perform, and to exercise such
rights and powers
as Debtor might
exercise with respect to the
Collateral, including the
right to (a) collect by legal
proceedings or otherwise and endorse,
receive and receipt for all
dividends, interest, payments,
proceeds and other sums
and property now or hereafter
payable on or on account of the
Collateral; (b) enter into
any extension, reorganization,
deposit, merger,
consolidation or other
agreement pertaining to, or deposit,
surrender, accept, hold or apply other
property in exchange for the Collateral;
(c) make any compromise
or settlement,
and take any
action Secured
Party deems
advisable, with respect
to the Collateral;
(d) file
a copy
of this Agreement
with any governmental
agency, body or
authority, at
the sole cost
and expense
of Debtor; (e)
insure, process
and preserve
the Collateral; (f)
pay any indebtedness of Debtor
relating to the Collateral;
(g) execute and
file UCC financing
statements and other documents,
certificates, instruments
and agreements
with respect
to the Collateral
or as otherwise
required or permitted
hereunder; and (h) take
any and all appropriate action
and execute any
and all documents and instruments
that may be necessary
or useful to accomplish the purposes
of this Agreement; provided,
however, that Secured Party
shall not exercise
any such powers
granted pursuant to clauses
(a) through (c)
above prior to the occurrence
of an Event of Default and shall
only exercise such powers
during the continuance of an Event
of Default. The powers
conferred on Secured Party under
this Section 6 are
solely to protect
its interests
in the Collateral and
shall not impose any
duty upon it
to exercise any
such powers. Secured Party
shall be accountable only for
the amounts that
it actually receives as a result
of the exercise of such
powers, and neither Secured Party
nor any of its stockholders,
directors, officers, managers,
employees or agents
shall be responsible
to Debtor for
any act or failure to
act, except
with respect to Secured
Party’s own gross
negligence or
willful misconduct.
Nothing in this Section
6 shall be
deemed an authorization for
Debtor to take any action
that it is otherwise expressly
prohibited from undertaking by
way of other
provision of this Agreement.

 

		7.	Default
                                         and Remedies.

 

7.1.           
Default.
Debtor
shall
be deemed
in default
under this
Agreement upon
the occurrence
of an Event
of Default
(as defined
in the Note).

 

7.2.           
Remedies. Upon
the occurrence
of any
such Event
of Default,
Secured Party
shall have
the rights
of a
secured creditor
under the
UCC, all
rights granted
by this
Agreement and
by law, including,
without limiting
the foregoing,
(a) the
right to require
Debtor to assemble
the Collateral and
make it available
to Secured Party
at a place to be
designated by Secured
Party, and (b) the
right to take possession
of the Collateral, and for
that purpose Secured
Party may enter upon
premises on which the Collateral
may be situated and remove
the Collateral therefrom. Debtor
hereby agrees that fifteen (15)
days’ notice of a public
sale of any Collateral
or notice of
the date after
which a private sale
of any Collateral may
take place is reasonable. In
addition, Debtor waives
any and all rights
that it may have
to a

    	3

    	 

    

 

judicial
hearing in
advance of
the enforcement
of any of
Secured Party’s
rights and
remedies hereunder,
including, without
limitation, Secured
Party’s right
following an
Event of
Default to
take immediate
possession of
Collateral and
to exercise Secured
Party’s rights and remedies
with respect thereto.
Secured Party may also have
a receiver appointed to take
charge of all or any portion
of the Collateral and to exercise
all rights of Secured
Party under this Agreement. Secured
Party may exercise any of its
rights under this
Section 7.2
without demand
or notice
of any
kind. The remedies
in this
Agreement, including
without limitation this Section
7.2, are in addition to, not in limitation
of, any other right, power, privilege,
or remedy, either in law, in
equity, or otherwise, to which
Secured Party may be entitled.
No failure or delay
on the part of Secured
party in exercising
any right, power,
or remedy will
operate as a waiver thereof,
nor will any
single or partial exercise
thereof preclude any other
or further exercise thereof
or the
exercise of
any other right
hereunder. All
of Secured
Party’s rights
and remedies,
whether evidenced
by this Agreement
or by any other agreement,
instrument or document
shall be cumulative
and may be exercised
singularly or concurrently.

 

7.3.           
Standards for
Exercising Rights and
Remedies. To
the extent that
applicable law
imposes duties
on Secured
Party to exercise
remedies in a
commercially reasonable
manner, Debtor acknowledges
and agrees
that it
is not commercially
unreasonable for
Secured Party
(a) to
fail to
incur expenses
reasonably deemed
significant by Secured
Party to
prepare Collateral
for disposition,
(b) to
fail to obtain third
party consents for
access to Collateral to
be disposed
of, or to
obtain or,
if not
required by other law,
to fail to obtain governmental
or third party
consents for the
collection or disposition
of Collateral to be collected
or disposed of, (c) to fail
to exercise collection remedies
against account debtors or other
persons obligated on Collateral
or to fail to remove liens or encumbrances
on or any adverse claims
against Collateral, (d)
to exercise collection
remedies against account
debtors and other persons obligated
on Collateral directly
or through the use of collection
agencies and other collection
specialists, (e) to advertise dispositions
of Collateral through
publications or media of general
circulation, whether or not the Collateral
is of a specialized nature, (f)
to contact other persons,
whether or not in the same business
as Debtor,
for expressions
of interest in
acquiring all
or any portion
of the Collateral,
(g) to hire
one or more professional auctioneers
to assist in the disposition
of Collateral, whether or not
 the Collateral is of a
specialized nature,
(h) to dispose
of Collateral by utilizing Internet
sites that provide
for the auction of assets of
the types included in the
Collateral or that have the reasonable
capability of doing so, or that
match buyers and sellers
of assets, (i) to
dispose of assets in wholesale
rather than retail
markets, (j) to disclaim disposition
warranties, (k) to purchase insurance
or credit enhancements to insure
Secured Party against risks
of loss, collection or disposition
of Collateral or to provide to Secured
Party a guaranteed return
from the collection or
disposition of
Collateral, or (l)
to the extent deemed appropriate
by Secured Party, to obtain the services
of other brokers, investment
bankers, consultants and other
professionals to assist Secured
Party in the collection or disposition
of any of the Collateral. Debtor acknowledges
that the purpose
of this Section
is to provide non-exhaustive
indications of what
actions or omissions by Secured
Party would fulfill Secured
Party’s duties under the
UCC in Secured Party’s exercise
of remedies
against the
Collateral and that
other actions
or omissions by Secured
Party shall
not be deemed to fail
to fulfill such duties solely
on account of not being
indicated in this Section. Without
limitation upon the foregoing,
nothing contained in this Section
shall be construed to grant any
rights to Debtor or to impose
any duties on Secured Party
that would not have been granted
or imposed by this Agreement
or by applicable law in the absence
of this Section.

 

7.4.           
Marshalling. Secured
Party shall
not be
required to
marshal any present
or future
Collateral for,
or other
assurances of payment
of, the Obligations
or to resort
to such Collateral
or other
assurances of
payment in
any particular
order, and all
of its
rights and
remedies hereunder
and in respect
of such
Collateral and
other assurances
of payment
shall be cumulative
and in addition
to all
other rights
and remedies, however
existing or arising. To the extent
that it lawfully may,
Debtor hereby agrees
that it will not invoke
any law relating to the marshalling
of Collateral which might
cause delay in or impede the
enforcement of
Secured Party’s
rights and
remedies under
this Agreement
or under any
other instrument

    	4

    	 

    

 

creating
or evidencing
any of the
Obligations or
under which
any of the
Obligations is
outstanding or
by which
any of the
Obligations is
secured or
payment thereof
is otherwise
assured, and,
to the extent
that it
lawfully may,
Debtor hereby
irrevocably waives
the benefits
of all such
laws.

 

7.5.           
Application of
Collateral Proceeds.
The proceeds
and/or avails
of the Collateral,
or any part
thereof, and
the proceeds
and the avails
of any remedy
hereunder (as well
as any other
amounts of any
kind held
by Secured
Party at
the time
of, or
received by
Secured Party
after, the occurrence
of an Event of
Default) shall be paid
to and applied
as follows:

 

(a)               
First, to
the payment
of reasonable costs
and expenses,
including all
amounts expended
to preserve
the value
of the Collateral,
of foreclosure
or suit,
if any,
and of
such sale
and the exercise
of any other
rights or remedies,
and of all
proper fees,
expenses, liability
and advances, including
reasonable legal expenses
and attorneys’ fees,
incurred or made hereunder
by Secured Party;

 

(b)              
Second, to the
payment to Secured
Party of the
amount then
owing or
unpaid on the
Note (to
be applied
first to
accrued interest
and second
to outstanding
principal) and all
amounts owed under
any of the other
Transaction Documents; and

 

(c)               
Third, to
the payment
of the
surplus, if
any, to
Debtor, its
successors and
assigns, or
to whosoever may
be lawfully entitled
to receive the same.

 

In
the absence of final
payment and satisfaction in
full of all
of the Obligations, Debtor shall
remain liable for any
deficiency.

 

		8.	Miscellaneous.

 

8.1.           
Notices. Any
notice required
or permitted
hereunder shall
be given
in the
manner provided
in the subsection
titled “Notices”
in the
Purchase Agreement,
the terms
of which
are incorporated
herein by this
reference.

 

8.2.           
Non-waiver. No
failure or delay
on Secured
Party’s part
in exercising
any right
hereunder shall
operate as a
waiver thereof
or of
any other
right nor
shall any
single or
partial exercise
of any
such right preclude
any other further
exercise thereof or
of any other
right.

 

8.3.           
Amendments and
Waivers.
This Agreement
may not be
amended or
modified, nor
may any
of its terms
be waived,
except by
written instruments
signed by Debtor
and Secured
Party. Each waiver
or consent
under any
provision hereof
shall be
effective only
in the specific
instances for
the purpose for which
given.

 

8.4.           
Assignment. This
Agreement shall
be binding
upon and inure
to the benefit
of Secured
Party and Debtor
and their
respective successors
and assigns;
provided, however,
that Debtor
may not
sell, assign
or delegate
rights and
obligations hereunder
without the prior
written consent
of Secured Party.

 

8.5.           
Cumulative Rights,
etc. The
rights, powers
and remedies
of Secured
Party under
this Agreement
shall be
in addition
to all
rights, powers
and remedies
given to
Secured Party
by virtue
of any
applicable law,
rule or
regulation of
any governmental
authority, or
the Note,
all of
which rights,
powers, and remedies shall be
cumulative and may be exercised
successively or concurrently without
impairing Secured
Party’s rights
hereunder. Debtor
waives any
right to require
Secured Party to proceed
against any person or entity
or to exhaust any Collateral
or to pursue any remedy
in Secured Party’s power.

    	5

    	 

    

 

8.6.           
Partial Invalidity.
If any
part of this
Agreement is construed
to be
in violation
of any
law, such part
shall be
modified to
achieve the
objective of
the parties
to the
fullest extent
permitted and the balance
of this Agreement
shall remain in
full force and
effect.

 

8.7.           
Expenses. Debtor
shall pay
on demand
all reasonable
fees and
expenses, including
reasonable attorneys’
fees and
expenses, incurred
by Secured
Party in
connection with
the custody,
preservation or
sale of,
or other
realization on,
any of
the Collateral
or the enforcement
or attempt
to enforce
any of the Obligations
which are
not performed
as and when
required by this Agreement.

 

8.8.           
Entire Agreement.
This Agreement
and the other
Transaction Documents,
taken together,
constitute and contain
the entire
agreement of
Debtor and
Secured Party
with respect
to this
particular matter
and supersede
any and all
prior agreements,
negotiations, correspondence,
understandings and communications
between the
parties, whether
written or oral,
respecting the subject
matter hereof.

 

8.9.           
Governing Law.
Except as
otherwise specifically
set forth
herein, the
parties expressly
agree that
this Agreement
shall be
governed solely
by the laws
of the State
of Utah,
without giving
effect to the
principles thereof
regarding the conflict
of laws; provided,
however, that
enforcement of Secured Party’s
rights and remedies
against the Collateral as provided
herein will be subject to the
UCC.

 

8.10.       
Waiver of
Jury Trial.
EACH PARTY
TO THIS
AGREEMENT IRREVOCABLY
WAIVES ANY
AND ALL
RIGHTS IT
MAY HAVE
TO DEMAND
THAT ANY
ACTION, PROCEEDING
OR COUNTERCLAIM
ARISING OUT
OF OR
IN ANY
WAY RELATED
TO THIS AGREEMENT
OR THE
RELATIONSHIPS OF
THE PARTIES
HERETO BE
TRIED BY JURY.
THIS WAIVER EXTENDS
TO ANY AND ALL
RIGHTS TO DEMAND A TRIAL BY
JURY ARISING UNDER COMMON
LAW OR ANY APPLICABLE
STATUTE, LAW, RULE OR
REGULATION. FURTHER, EACH PARTY
HERETO ACKNOWLEDGES THAT IT
IS KNOWINGLY AND
VOLUNTARILY WAIVING ITS
RIGHT TO DEMAND TRIAL
BY JURY.

 

8.11.       
Purchase Agreement;
Arbitration of
Disputes.
By executing this Agreement,
each party agrees
to be bound
by the
terms, conditions
and general
provisions of
the Purchase
Agreement and
the other
Transaction Documents,
including without
limitation the
Arbitration Provisions
(as defined
in the Purchase Agreement)
set forth as
an exhibit to the
Purchase Agreement.

 

8.12.       
Counterparts. This
Agreement may
be executed
in any
number of counterparts,
each of which shall
be an original
and all of which
together shall
constitute one instrument. Any
electronic copy of a party’s
executed counterpart
will be deemed
to be an executed
original.

 

8.13.       
Termination of
Security Interest.
Upon the
payment in
full of
all Obligations,
the security
interest granted
herein shall
terminate and
all rights
to the
Collateral shall
revert to Debtor.
Upon such termination,
Secured Party hereby
authorizes Debtor
to file
any UCC
termination statements
necessary to effect
such termination
and Secured
Party will
execute and
deliver to
Debtor any
additional documents or
instruments as Debtor shall
reasonably request to evidence
such termination.

 

8.14.       
Time of
the Essence. Time
is expressly
made of
the essence
with respect
to each
and every provision
of this
Agreement.

 

[Remainder
of
page
intentionally left blank;
signature page follows]

    	6

    	 

    

 

IN
WITNESS WHEREOF,
Secured Party
and Debtor
have caused
this Agreement
to be
executed as of
the day and year
first above written.

 

SECURED
PARTY:

 

TYPENEX
CO-INVESTMENT, LLC

 

By:
Red
Cliffs Investments, Inc., its Manager

 

/s/ John
M. Fife

John M.
Fife, President

 

 

DEBTOR:

 

AVALANCHE
INTERNATIONAL, CORP.

 

 

By:
/s/ Phil Mansour 

Name:Phil
Mansour 

Title:
Ceo

    	7

    	 

    

 

SCHEDULE
A

TO
SECURITY AGREEMENT

 

Those
certain Investor
Notes (comprised
of
Investor Note
#1, Investor
Note #2
and Investor Note
#3) issued
by Secured Party in favor
of Debtor on May
29, 2015, in the initial
principal amount
of $50,000.00
each, and any
and all
claims, rights
and interests
in any of
the above
and all substitutions
for, additions
and accessions to, and
proceeds thereof.

    	8

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